Are you searching for the best US forex brokers?
Of course you are.
Luckily, our team of professional forex broker reviewers can take care of your every need.
Let alone the best forex broker in USA, our team realizes it is tough to find any broker which offers a trustworthy, and still value for money proposition when you want to trade forex in the USA. Forex brokers accepting US clients may be few and far between, but we have combined years of experience to narrow your selection down to the top five brokers.
These five are among the best forex brokers USA has to offer.
In fact, they are some of the best forex brokers for residents of any country. These brokers will ensure you feel safe, secure, and still have the ability to prosper in your trading career. They have been selected as the best US forex brokers for a variety of reasons.
Among these reasons are the amount of trading support they offer you, they wide range of markets and instruments that are available for trading, and the very competitive pricing and fee structure offered by these top brokers.
(This post is part of the best forex brokers series)
Table of contents
Is Forex Trading legal in the USA?
As a forex trader in the US, one of the most important questions you may be asking yourself from the outset surrounds the legality of forex trading in the US. Well, we are pleased to tell you that yes, forex trading is legal in the US. In fact, the US has several top financial regulators providing the best protection to you as a trader. These bodies are FINRA, the SEC, CFTC, and NFA with the latter two being the main regulators when it comes to forex trading and trading in derivatives such as futures. Remember also that CFDs trading in the US is not permitted.
How to trade forex in the USA
The process of getting started with a forex broker in the US is typically similar to that of any other country. With any top broker you will usually be asked for the following information:
- Proof of identity. A passport is typically best for this purpose.
- Proof of residence, usually in the form of a bank statement at your current address.
Once these documents are uploaded and verified, a process that takes most brokers just a few minutes, you will be free to get started trading forex.
Top 7 Forex Brokers in the USA Listing for 2020
Here’s our list of the best US forex brokers:
US trader? Here’s what to look for in a forex broker
As a US forex trader, there are a few key points to be mindful of, mostly related to the regulations that are in place around trading there.
In the US, binary options trading is legal, as are most derivative products including options and futures. There are some exceptions though. CFDs trading is not legal, nor is spread betting.
When it comes to leverage, this is in fact quite generous in the sense it can be as much as 50:1. Things such as negative balance protection are also not mandatory, though some of our top brokers listed do still provide this alongside the segregated bank accounts mandated for your funds to provide maximum protection against bankruptcy.
With those points in mind then, here are a few tips to follow that can help ensure your US forex broker choice is the best one possible:
1. Look for forex brokers regulated in the USA
This is a key point. No matter the country you are trading from, you should typically seek a broker regulated there for the best protection. The US is no different. In fact, the US regulation is very difficult to obtain meaning that brokers must be highly trustworthy to be US regulated.
In that case, as a US trader, make sure you choose a broker regulated by the CFTC or NFA if you are trading forex and derivatives, or the SEC if you are interested in stock trading.
2. Are you a beginner? Choose a low-risk broker
Particularly if you are new to the industry, you will want to balance your risk as much as you can. This means choosing a broker with a low minimum deposit so you can get to know the ropes without taking any major risks. Once you find your feet, you can always deposit more.
3. Negative Balance Protection for feeling safer
Negative balance protection is not mandatory under US regulation. With that said, it still provides great protection to forex traders in the unlikely event that your funds went into the negative during periods of high volatility or if you are trading with big leverage. Negative balance protection offered by a few of the US brokers can prevent this from happening.
How to verify if a forex broker is regulated in the USA
Checking your broker regulation is an important one of the final steps to getting started in US forex trading. In this case, if you want to check your broker regulated by the CFTC or NFA, you can go to the NFA website and search for the company name.
In all cases, you will need the broker business name which can typically be found at the bottom of their homepage.
Is forex trading taxable in the USA?
The clear answer here is that yes, forex trading in the US is taxable. the total capital gains tax to be paid can be calculated as follows:
- The first 60% of the Capital gain – 15% tax
- The next 40% of the Capital gain – it depends on the tax bracket you fall in, which is usually 35%
We are not professional tax advisors, thus we strongly suggest you contacting local authorities if you don’t know how to manage this aspect