6 Best US Forex Brokers for 2023

The United States (US) is a dominant force in global financial markets, holding a significant influence on worldwide economic dynamics.

Its currency, the US dollar (USD), stands as the primary reserve currency worldwide, often serving as a benchmark in global transactions and a preferred choice in international reserves.

The financial markets of the US are closely monitored and regulated by various bodies to ensure integrity and transparency.

The Commodity Futures Trading Commission (CFTC) mandates that any entity acting as an RFED (Retail Foreign Exchange Dealer) must be registered with them. This registration is to protect the public and market users from fraud, manipulation, and abusive practices related to commodities and financial futures and options. The National Futures Association (NFA) is the self-regulatory organization for the U.S. derivatives industry, and it enforces the regulations set forth by the CFTC. Any RFED operating in the U.S. must adhere to the standards and rules established by the CFTC and NFA to ensure transparency, integrity, and protection for traders.

In this article we’ve featured all the best forex brokers in the United States of America. To decide which ones to include, we considered the following factors:

• A regular RFED license;
• The number of forex pairs;
• Forex commissions charged to US traders;
• Investment methods;
• Additional broker features for US clients.

Overview

What are the best US forex brokers?

Below is our curated list of the best forex brokers for traders living in the United States, with details and information about the country laws, the features, and the characteristics.

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. The answer is yes, forex trading is legal in the USA.

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. However, remember that CFD trading in the US is not permitted.

Essentially, when looking at and comparing various US forex brokers, pay attention to the regulatory bodies. All the brokers you see above are regulated by the top independent regulatory bodies, proving they are trustworthy brokers. If you can’t find any information about licenses, it’s a high chance you’re dealing with a forex scam.

How to trade forex in the USA?

The very first thing to do when you want to start trading forex in the USA is to choose a reputable broker. Once you do that, you will find the remaining parts of the process incredibly straightforward.

Essentially, the process of getting started with a forex broker in the US is typically similar to that of any other country. With any top forex broker, you will most likely have to follow several simple steps:

1. Setting up a forex account:
   First off, you will need to follow your chosen broker’s application process. How it’s structured will depend on the platform you choose, although US traders should expect to be asked for proof of identity (a passport works best for this purpose) and proof of residence (usually a bank statement at your current address). Once these documents are uploaded and verified, a process that takes most forex brokers just a few minutes, you will be free to get started trading forex.
2. Funding your account:
   Once your account is active, you need funds to start trading forex. Top US brokers offer traders multiple deposit methods, so you should easily find the platform that offers your favorite payment option. Pay attention to minimum deposit requirements, though.
3. Take your time to learn how the platform works:
   You may feel tempted to jump right into the forex market and start trading. However, having tested multiple brokers in our trading experience, we’d recommend taking things slow and learning how the forex platform works and where to find all the essential forex trading tools and information.

What should US traders look for in a US forex broker?

Finding the best US broker can be challenging. There are tons of brokers available for US traders, but not all of them are created equal. Therefore, 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. CFD trading is not legal, nor is spread betting.

When it comes to leverage, this is 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 forex 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, 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

If you’re new to forex trading, 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.

Be also sure to look for a forex broker with a comprehensive knowledge base, such as guidelines, forex-related articles, etc. A good idea is also to use the broker’s demo account (if it offers one). It will allow you to perform several forex trades 100% risk-free as it doesn’t include real money trading.

3. Seek negative balance protection to feel safer

Negative balance protection is a system that protects traders against losses exceeding their deposited capital. Essentially, it ensures you don’t lose more money than you have.

The thing is that negative balance protection is not mandatory under US regulation, with only the best forex brokers offering it.

With that said, it still provides great protection to forex traders in the unlikely event that your funds go 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 top US brokers can prevent this from happening.

4. Consider the pricing and fees

Look at both trading and no-trading fees a broker offers. Forex trading fees will usually be measured in spreads quoted in pips. The lower the spreads, the better for the trader, as you’ll pay less for your forex trading.

Regarding no-trading fees, these include deposit and withdrawal fees and inactivity fees. Best brokers don’t usually charge fees for deposits or withdrawals, although you can expect them to charge you an inactivity fee if you don’t use your account for a specific period – usually a year.

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. As covered, choosing a reputable and licensed broker is a must. If the forex broker isn’t regulated or doesn’t display any information about it, it’s more than likely that you’re dealing with a scam.

To check if your broker is regulated by the CFTC or NFA, you can go to the NFA website and search for the company name.

If the broker is SEC-regulated, then you can go to the SEC official website or follow the link to Brokercheck (powered by FINRA). In all cases, you will need the broker’s business name, which can typically be found at the bottom of their homepage.

At InvestinGoal, we only recommend regulated forex brokers. We don’t trust brokers who aren’t transparent about their licensing. And having been trading forex for a long time, trust us that we know what the scam forex broker looks like.

Is forex trading taxable in the USA?

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 contact local authorities if you don’t know how to manage this aspect.