Best Forex Brokers for Carry Trade 2023
At InvestinGoal, we adhere to strict standards to ensure an unbiased review process. We conduct our reviews by examining each broker’s offering and performance across 4 key categories. A final rating is produced for each forex broker based on a total of 187 data points. Learn more about our review process and methodology.
In this article, we have grouped some of the best forex brokers for carry trading.
In making this ranking, we have taken the following factors into consideration:
- The mark-up on the spread
- The broker’s trading commissions
- The quantity of forex pairs
- Additional tools to help with carry trading
- The overall quality of the broker
Round-up
- IC Markets: best forex carry trading broker overall
- IG Markets: widest range of assets
- XTB: best trading platform
- XM: most efficient order execution
- HF Markets: most flexible forex carry trade broker
- Pepperstone: great for low spread carry trading
- FxPro: large number of trading platforms
- FBS: lowest minimum deposit
- OctaFX: carry trading broker for beginners
- Interactive Brokers: best for professional forex carry traders
WARNING
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investor accounts lose money when trading CFDs.
You should consider whether you can afford to take the high risk of losing your money
Review
1. IC Markets
- With IC Markets it is possible to carry trade with low commissions.
- IC Markets’ ECN execution allows carry traders to access the forex market with spreads as low as 0 pips.
- You can carry trade on IC Markets’ MT4, MT5, or cTrader platforms with a minimum deposit of $200.
Visit IC Markets
(74-89% of retail CFD accounts lose money)
2. IG Markets
- IG Markets is a good broker for carry trading thanks to its wide number of forex pairs and assets available.
- IG Markets offers up to 17,000 assets in total, and over 90 forex pairs.
- Traders on IG Markets can trade forex with spreads as low as 0.6 pips.
- Trading accounts at IG Markets generally require a minimum deposit of at least $300 depending on the country of residence.
Visit IG Markets
(76% of retail investor accounts lose money)
3. XTB
- XTB allows carry trading on numerous forex pairs with spreads as low as 0 pips.
- XTB does not require a minimum deposit to open an account and start carry trading.
- The trading platform offered by XTB is the xStation5.
Visit XTB
79% of retail CFD accounts lose money
4. XM
- XM is a good broker for carry trading because of its efficient order execution.
- XM’s spreads start at 0 pips, and the broker offers a large number of accounts to choose from.
- XM’s minimum deposit is generally $5 on the accounts offered.
Visit XM
73.57% of retail CFD accounts lose money
5. HF Markets
- With HF Markets, carry traders can trade over 40 forex pairs.
- Spreads on HF Markets start at 0 pips depending on account type.
- The minimum deposit to open an account and do carry trading on HF Markets is $100.
Visit HF Markets
(71.04% of retail CFD accounts lose money)
6. Pepperstone
- Through Pepperstone it is possible to carry trade with one of the lowest spreads in the industry.
- On Pepperstone, spreads start at 0 pips, averaging 0.09 pips on the EUR/USD pair.
- Pepperstone allows you to open trading accounts on MT4, MT5, and cTrader with a minimum deposit of $200.
Visit Pepperstone
(75.9% of retail CFD accounts lose money)
7. FxPro
- With FxPro, carry trading is possible on three different platforms, MT4, MT5, and cTrader.
- Spreads on FxPro start at 0 pips, but vary depending on the type of account you choose.
- To open a real account at FxPro and start carry trading, $100 is required.
Visit FxPro
72.87% of retail CFD accounts lose money
8. FBS
- FBS is the highest leveraged carry trading broker, as it offers levers up to 1:3000 under IFSC.
- On FBS it is possible to trade with spreads as low as 0 pips, however, European clients will find spreads from 1 pip.
- FBS offers accounts on several platforms, including MT4 and MT5, and requires a minimum deposit starting at $1 depending on the account.
Visit FBS
74-89% of retail CFD accounts lose money
9. OctaFX
- OctaFX has a comprehensive calculator that allows traders to work out how their swap rate for different currency pairs.
- New traders can open an OctaFX trading account for $25.
- The spreads on OctaFX start from 0.2 pips.
Visit OctaFx
74-89% of retail CFD accounts lose money
10. Interactive Brokers
- At Interactive Brokers, carry trading is possible on several platforms, including MT4 and the broker’s proprietary one.
- The service offered by Interactive Brokers offers spreads as low as 0 pip, with over 100 forex pairs to choose from.
- There is no minimum deposit to open a real account with Interactive Brokers.
Visit Interactive Brokers
74-89% of retail CFD accounts lose money
What is the forex carry trade?
A carry trade in forex may sound complex, but is actually not too complicated, and another potential way to profit. It is in fact a trading strategy that involves two currencies. One of these is what is considered a high interest currency, the other, a low interest currency.
As a carry trader, you will attempt to borrow at a low interest rate, and invest this money in a place that returns a high interest rate, in this case, all in the form of foreign currency pairs. By borrowing a pair at a low interest rate, and investing in a pair with a high interest rate, you should be able to exploit the percentage difference as profit.
Forex carry trade example
As a simple carry trade example, let’s imagine that you borrow a low interest currency (LIC) at an example rate of 1%, and you use that to buy into a high interest currency (HIC) that earns typically 3%. You should expect a 2% profit. to illustrate this example:
With an exchange rate of 10.00:
100 LIC will purchase 1000HIC.
After a period of time, the HIC gains 3% to 1030.
The LIC gains 1% to 101.
With the exchange rate remaining unchanged, you would now have 1030 HIC which converts back to 103 LIC representing a 2 LIC profit, or 2%.
Of course, the interest rates may change during this time. This can certainly lead to fluctuation in profits and losses that you need to be mindful of. The above example is put forward in the table below:
| TIMEFRAME | LIC (1%) | HIC (3%) | |
|---|---|---|---|
| Let’s buy HIC with LIC | 100 | → | 1000 |
| After the interest | 101 | 1030 | |
| Let’s get the LIC back | 103 | ← | 1030 |
| Gains | 103-101 = 2 LIC |
How to find the best forex carry trade currencies for 2023
Now that you know some of the background and basics surrounding carry trading, how do you find the best currencies to carry trade? Here are a few tips:
- Find two potential forex currencies
The first step is to find two currencies that fit the criteria. This means that the interest rate of the currency you borrow should be lower than the one you are intending to buy. The bigger the gap, the more improved the potential for a great carry trade.
- Find the relative forex pair, and take a look at the chart
If you have found two currencies you think fit the bill, you then need to be sure. This means studying the charts at that moment to exploit any ongoing trend in either direction. If this kind of trend is not showing, then you are better to wait and not enter a carry trade with these currencies.
Carry trade pros and cons
As with every type of trading, there are a few positives and drawbacks with carry trades. Here are a few of note:
Pros
- The carry trade is very flexible in the sense it can apply to any number of currencies moving in either direction. A wealth of opportunity.
- Like many forms of trading, a carry trade relies on, and rewards your knowledge and awareness of the markets and current trends.
Cons
- If the interest rate changes at any point during your trading process, then it can ruin the entire trade and the profitability you spotted.
- Carry trading is not suitable for those Islamic traders who wish to remain compliant with Shariah law.
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