Top 10 Best Forex Brokers for Carry Trade for 2020

Filippo Last Updated: April 2019 10 min read
Top Rated:

Are you looking for the best forex broker to carry trade because you’re looking to take advantage of different interest rates in the forex market?

We can help you.

The carry trade is a big deal and when leveraged correctly at the right time can yield great results. But not all brokers allow traders to take advantage of this.

On top of that, you also shouldn’t just sign up to the first broker that allows you to carry trade, you should consider what other benefits they can also give you too, such as high-quality trading tools and exceptional liquidity.

That’s why we made this list.

Top 10 of the best forex brokers to carry trade for 2020

Here’s our ranking.

Open an account
74-89 % of retail CFD accounts lose money

1 IC Markets

IC Markets is an exceptional Australian ECN broker choice for any trader that wants to carry trade and an exceptional all-rounder. They are very open about carry trade and do not shy away from talking to traders about swap points or forward points. IC Markets is also one of the best ECN brokers around today offering liquidity from several different providers, including dark pools, and claim to execute approximately 500,000 trades a day. With IC Markets, this ability to carry trade is of course not the only appeal. They also have a very low cost of trading.

You can take advantage of spreads from as low as 0.1 pips on forex with IC Markets and all trading takes place through the much trusted MT4, MT5, and cTrader platforms so you have all the best in the industry to choose from. Add to that the fact that you can get started with no minimum deposit and it becomes clear why this is one of the top choices.

86
Rated: Excellent
security 92
cost 90
trading 75
education 100

Platforms: cTrader desktop, cTrader web, Mirror Trader, ZuluTrade, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web Regulations: MIFID-ESMA, ASIC, CYSEC, Offshore Minimum Deposit: 200
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83% of retail CFD accounts lose money

2 Dukascopy

Dukascopy is a heavyweight Swiss broker that also doubles up as a bank, which allows traders to take advantage of excellent liquidity and financial experience. Dukascopy offers a range of top-quality benefits to its traders, including the ability to open a bank account with them, which can ease the transfer of funds. Dukascopy was also awarded ‘Best Forex Bank 2018’ by the China Forex Expo. All of these top-quality features may make you think that they are not accessible. This though is not true. You can get started ECN trading with the broker for as little as $100.

The minimum deposit here can rise to $1,000 or $100,000 depending on areas and choices, but they are typically welcoming to new traders at the best low rates. This also includes a highly attractive spread from 0.1 pips that helps further lower your costs combined with some of the fastest execution speeds in the market.

78
Rated: Excellent
security 92
cost 57
trading 69
education 100

Platforms: Mirror Trader, Proprietary Web Platform Regulations: FSA, FINMA, FCA, MIFID-ESMA Minimum Deposit: 100
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80% of retail investor accounts lose money

3 XTB

XTB is another heavyweight broker with a renowned international presence, which also very open about different swap points and forward points for different currency pairs. XTB also offers some of the best trading technology available to date, including their super fast and easy to use XStation 5 platform and was voted best ‘CFD Broker of 2018’ by the Wealth & Finance International Awards. As well as being a top rated broker, they are also very easy to deal with.

Many new traders in particular are enticed to sign up by the fact there is no XTB minimum deposit in place. This makes it ideal for beginners learning to trade and carry trade for the first time. They also present a wide range of market choices that include 48 forex pairs at an excellent low spread starting from 0.1 pips. The well developed education section also keeps you learning while you have a choice of top platforms in the form of MT4 and XStation 5.

74
Rated: Excellent
security 92
cost 55
trading 60
education 100

Platforms: Mirror Trader, Proprietary Desktop Platform, MAC Platforms Regulations: FCA, MIFID-ESMA, CYSEC, Offshore Minimum Deposit: 250
Open an account
73.57% of retail investor accounts lose money

4 XM

With over 1,000 instruments to trade with, XM is a great choice for any trader, offering plenty of opportunities to carry trade and to build a diverse portfolio. XM are also known to be extraordinarily fast, claiming that ‘99.35% of All Trades are Executed in Less than 1 Second’, an execution speed that is incredibly rare. Beyond this, they also offer some of the best trading conditions for all types of forex trader.

This starts with a minimum deposit from just $5 that is perfect for new traders learning the ropes in the sector. They will also have the backing of a fully unlimited demo account and extremely well-resourced educational section. Added to that, the minimum deposit on an XM Zero spread account iid highly competitive at just $100 to get started. This provides you access to unbeatable spread value from 0 pips.

75
Rated: Excellent
security 78
cost 81
trading 71
education 69

Platforms: MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms Regulations: FCA, MIFID-ESMA, ASIC, CYSEC Minimum Deposit: 5
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73.05% of retail investor accounts lose money

5 FXCM

FXCM is a solid forex and CFD broker that can reliably be used to carry trade with ease. They are also an ideal choice for those looking for a broker with an exceptional web trading platform. With FXCM’s ‘battle tested’ Trading Station, traders can take advantage of 10 years of testing and development. FXCM also allows traders to use the copy trading platform ZuluTrade with which they are partnered. The Australian market maker broker has grown in popularity over the years to become one of the top choices for those who carry trade, and all others too.

This popularity is driven in part by their positive reputation as a great value broker and they are particularly attractive to those starting out in forex trading, with a very low minimum deposit at just $50. From here though, you can still access some of the best spreads around. These start from a really low 0.9 pips and you have access to some of the best  platforms in the industry beyond the FXCM proprietary platform, with MT4, and Ninjatrader also available.

72
Rated: Excellent
security 93
cost 53
trading 55
education 100

Platforms: ZuluTrade, Proprietary Desktop Platform, Proprietary Web Platform Regulations: FCA, MIFID-ESMA, ASIC, IIROC, FSB, ISA Minimum Deposit: 0
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73.57% of retail investor accounts lose money

6 HotForex

HotForex is perhaps the most transparent forex broker when it comes to displaying their different fees allowing you to calculate the fees you will incur, with a fair degree of accuracy, when you carry trade. HotForex is also credited for being highly customer orientated, also being awarded the ‘Best Customer Service Award’ at the 2015 European CEO Awards. Besides this, they are also very well-trusted with being regulated by multiple top-tier bodies including the FCA.

HotForex is a very appealing broker to new traders given that their minimum deposit stands at only $50. Added to that, they provide for an excellent education section full of articles, videos, and more to keep you developing. They also hold excellent value when it comes to minimum deposits, and the spreads here start from 0 pips on forex.

80
Rated: Excellent
security 92
cost 88
trading 59
education 100

Platforms: MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web Regulations: FCA, MIFID-ESMA, CYSEC, Offshore, FSC (Mauritius) Minimum Deposit: 50
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76.5% of retail investor accounts lose money

7 Pepperstone

A goliath of CFD trading, Pepperstone is also very open about swap rates. What makes them stand out so much is that they update them regularly publishing them weekly by the financial institutions they work with. Pepperstone is also great for STP or ECN trading and were awarded the ‘Best Forex ECN Broker’ by the UK Forex Awards for 2018. The broker also offers multiple account types to choose from.

These account types include both the Standard and Razor accounts which are traded through MT4 with  the fastest of execution speeds and an appealing $200 minimum deposit for all traders. The broker also offers access to a range of social trading features if that is an area you would like to try out as well as impressive spreads that start from a rock bottom 0 pips keeping them at the top of the industry for many traders.

83
Rated: Excellent
security 91
cost 81
trading 70
education 100

Platforms: cTrader desktop, cTrader web, ZuluTrade, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms Regulations: FCA, ASIC Minimum Deposit: 200
Open an account
75.54% of retail investor accounts lose money

8 FxPro

FxPro is another forex broker that is highly transparent regarding its swap rates. Not only do they openly explain how their swap rates work, they even have a free calculator on their website that allows traders to instantly work out the swap rate for a trade, which prevents traders from miscalculating. FxPro were also awarded the ‘Most Trusted Forex Brand’ by Global Brands Magazine in 2017.

With a minimum deposit requirement at FXPro of only $100, it is easy to see why this top broker has retained such a great reputation. The cost of trading too is highly competitive in the sense that the spread here average just 0.45 pips with spreads starting from the lowest point of 0 pips and a very good value fixed spread also available. Alongside the trusted availability of MT4, FXPro remains a top choice with all types of trader.

77
Rated: Excellent
security 94
cost 56
trading 67
education 100

Platforms: cTrader desktop, cTrader web, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, Proprietary Desktop Platform, MAC Platforms Regulations: FCA, MIFID-ESMA, FSB, DFSA, CYSEC, Offshore Minimum Deposit: 100
Open an account
74-89% of retail CFD accounts lose money

9 FBS

Offering leverage of up to 1:3000, FBS is a good option for those who want to really want to multiply their advantage when performing a carry trade. So far, FBS claims to have attracted 10,000,000 traders and their ECN account option is also particularly appealing. FBS also has a copy trade feature and offers cent accounts for beginners. They are a well-known, worldwide broker that have become one of the top names in the sector, also offering the much-respected MT4 trading platform.

All levels of trader are attracted to FBS, from the newest in the industry, to seasoned veterans, there is something to please everyone. The best of spreads are available to help you make the most out of trading with a top broker too. These start from a general spread of 0.5 pips, and lower to 0 pips if you opt for the very attractive zero spread account that comes with a minimum deposit of only $500  to get started.

59
Rated: Medium
security 48
cost 79
trading 51
education 81

Platforms: MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms Regulations: MIFID-ESMA, CYSEC, Offshore Minimum Deposit: 1
Open an account
74-89% of retail CFD accounts lose money

10 OctaFX

OctaFx also has a comprehensive calculator that allows traders to work out how their swap rate for different currency pairs also taking into consideration different account types and leverage. Traders with OctaFx can also utilise their copy trading feature and the broker was awarded ‘Best ECN Broker’ by the UK Forex Awards in 2017. This comes with the territory for a much respected ECN/STP broker like OctaFX who have been operating from Estonia since 2011 and quickly built a reputation for their excellent ECN execution.

New traders too are attracted to begin trading with OctaFX, in part due to the very reasonable minimum deposit of $100 that provides access to a selection of 28 forex currency pairs. Once you have opened an account, you will also find very favorable terms when it comes to trading cost. The spreads here are available as both fixed, starting from 2 pips, and variable, starting from 0.4 pips.

58
Rated: Medium
security 49
cost 71
trading 53
education 81

Platforms: cTrader desktop, cTrader web, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms Regulations: MIFID-ESMA, CYSEC Minimum Deposit: 100

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 which 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:

TIMEFRAMELIC (1%)HIC (3%)
Let’s buy HIC with LIC1001000
After the interest1011030
Let’s get the LIC back1031030
Gains103 – 101 = 2 LIC

How to find the best forex carry trade currencies for 2020

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:

  1. 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.

  1. 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.

Keeping you better informed

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