Whether you want to stop trading Forex (Foreign Exchange market) or you have found a broker that better suits your needs, the time might come for you to close your Forex trading account.
It’s a process some traders fear, believing it to be complicated and troublesome.
That is not true. At least, not for reputable brokers. All the best Forex brokers we recommend provide traders with a swift account-closing process.
This guide will discuss how to close a Forex account in more detail and answer the most significant questions surrounding this topic.
What should I do before closing a Forex trading account?
Before you close your Forex trading account, you must:
- Close open position: The first step is to close all your currently open positions. If you don’t do it yourself, the broker will close them during the account-closing procedure. This, however, may result in additional charges or losses due to market fluctuations.
- Withdraw funds from your Forex account: You can withdraw your funds from your Forex account when there are no open trades (which is another reason why it is important to close them). Otherwise, you will be forced to withdraw them twice. Some Forex brokers will even allow you to send your funds directly to another broker’s trading account.
- Download your account statement: The final step before starting the account-closing procedure is to download all your annual account statements. So, for example, if you opened your Forex account in 2021 and decided to close in 2023, you should download statements from 2021, 2022, and 2023. It’s a safety measure to ensure you are prepared for any accounting issues.
Can I transfer my funds to another Forex broker?
That depends on the broker. Some Forex brokerage firms, for example, FXCM, allow traders to transfer funds to other brokers.
However, in most instances, it’s not possible to transfer money directly from one broker to another.
How to close a Forex trading account?
With your trades closed, funds withdrawn, and account statements downloaded, you may begin closing your Forex trading account. The process itself will vary from one broker to another, although it typically involves the following steps:
- Contact broker’s customer support team: Most brokers require traders who want to close their trading accounts to contact customer support to initiate the closing procedure. This can be done through all available contact methods (e.g., email, phone, or live chat). In the message, you should clearly state that you want to close your Forex account. Not all brokers require direct contact. Some, for example, eToro, allow traders to initiate the closing process through an online request, usually found in your ‘Account’ settings.
- Fill out the account termination form: Usually, you will be asked to complete an account closure form. Such forms typically require traders to provide their personal information, account details, and reasons for closing their accounts. Once completed, the form is submitted to the broker.
- Wait for the broker’s confirmation: After submitting your form, you must wait for the broker to confirm your request. Depending on the broker, this may take 2-3 business days, who will inform you about your account being successfully closed via email or mail.
How do I close a MetaTrader account?
Contact your broker’s customer support if you want to delete your MetaTrader account, either MT4 or MT5. You can also do it manually through your MT account settings. In general, the whole process is very similar to closing a trading account.
What’s important to note is that once deleted, you won’t be able to recover your trading history or account details.
How do I close a Forex demo account?
Closing a Forex demo account is much less complicated than closing a live trading account. Again, you can contact the broker directly or do it manually via your account settings. Depending on the broker, you may be required to provide a confirmation code or answer a security question to finalize demo account closure.
Can I block the account closing procedure?
That depends on the broker. Some allow traders to stop the account closing process within the given period, for example, 24 hours.
Most, however, don’t grant traders that option, which is why it’s so vital to be sure you want to close your live account before starting the closing procedure.
How much does it cost to close a Forex trading account?
Nothing. Brokers don’t charge account closing fees. However, it doesn’t mean that the closing process will be entirely free. For example, you might be charged withdrawal fees when paying out your remaining funds before completing the account closure process..
Some brokers may also charge fees for closing the trades on your behalf if you don’t do it yourself. When it comes to the closing procedure itself, however, you won’t be charged any additional fees.
Do I have to pay taxes on a closed trading account?
Yes, although it may depend on your country’s tax laws. Usually, you will be required to pay your Forex taxes the following year.
For example, if you close your Forex account in May 2023, you will still have to pay taxes on your January-May 2023 trades when filing taxes in 2024. That is why it’s so vital you download your account statement before closing your live Forex account. If you fail to do so, please contact the broker to send it to you.
Can Forex brokers close traders’ accounts without warning?
The Forex broker can terminate your live trading Forex account without a warning only under two circumstances:
- The broker goes out of business or terminates.
- The trader violates the terms and conditions.
What brokers’ T&C violation can lead to trading account closing?
In most instances, a broker can decide to terminate your live trading account if:
- There’s an issue with your KYC (know your customer) documentation, e.g., you provide the wrong personal information.
- You use illegal and unfair trading practices – these depend on the broker and usually include hedging, scalping, HFT (high-frequency trading), and algorithmic trading.
- You have legal problems or commit illegal actions on the trading platform.
- You go bankrupt or are in debt.
These T&Cs violations may vary from one broker to another. This is why it’s crucial to learn the terms and conditions when opening your live Forex account. Otherwise, you risk losing your trading account without you knowing you’ve done something wrong.
Also, depending on the severity of your violation, the broker may decide whether to send you a warning or not. The worse your case, the higher the chances of a broker deleting your account without notice.
Can I reopen my Forex account after closing it?
Usually yes. Most brokers allow traders to reopen their live Forex accounts. To do that, however, you will need to re-verify your account details and go through a standard account-opening procedure.
Also, bear in mind that there might be circumstances when the broker may not allow you to reopen your trading account. For example, if your account was terminated due to the broker’s T&Cs violation. In such a scenario, you must open a Forex trading account with another broker.
What happens to traders’ personal data after closing the trading account?
Depending on the local laws and regulations, Forex brokers are obligated to keep their traders’ personal data for 3 to 5 years. This data must be stored safely and according to the highest security standards and data protection laws.
After this period, the broker must delete the data permanently. Brokers keep this data because of potential investigations into traders’ tax or legal problems conducted by tax agencies or law enforcement.
What kind of information do Forex brokers retain?
Forex brokers retain trader’s personal information (the submitted KYC documentation) and account records.
Will Forex brokers sell my data?
As long as you trade with licensed and regulated Forex brokers, you have nothing to fear regarding them selling your data to third parties. The best Forex brokers must follow strict regulations from renowned financial institutions, such as ESMA or ASIC, preventing them from selling their traders’ personal information.
However, if you trade with an offshore or unregulated broker, you may be at risk of them selling your data. That is why, at InvestinGoal, we always recommend our readers trade only with reputable and trustworthy brokers regulated by the world’s most renowned financial institutions and governing bodies.
Why do traders delete their trading accounts?
There are numerous reasons for a trader to close their trading account with a broker. The most common causes include:
- They have found a better broker for their needs: The case might be that a trader finds a broker that better suits their trading needs, for example, offers more trading instruments, has more favourable spreads, offers their favourite withdrawal method, etc.
- They don’t want to trade anymore: Many Forex traders lose interest in trading with time – either due to the lack of time, skill, or expected results.
- They have reached their goal: Many Forex traders set themselves trading goals. Once reached, many decide to opt out of Forex trading.
- They felt scammed by their current broker: traders might feel scammed by a broker. For example, they might suspect a broker manipulates price changes. And while it’s not always true, many traders decide to close their accounts or switch brokers in such instances.
- The broker doesn’t support their trading strategy: It’s common for traders to try different trading strategies, for example, copy trading, hedging, or robo-trading. Not all brokers allow such practices, forcing traders to look for alternatives.
- They want to avoid inactivity fees: Many brokers charge inactivity fees. Simply put, they will charge monthly payments after an underlying period of no activity on the account. In such an instance, it’s better to close the account, even if you intend to start trading again after some time.
What are the best brokers to start again?
Whatever your reason might be for closing your current live trading Forex account, if you want to start trading again, you must find a new broker. This is something InvestinGoal can help you with.
Using our comprehensive Broker Search tool, you can browse and find brokers that best match your trading needs.
Some of our favourite top Forex brokers include:
- Pepperstone
- IC Markets
- AvaTrade
- XM.com
- FP Markets
Once you decide where you want to trade, be sure to read through our extensive guide to Forex account opening.