You are a forex trader living in the US and you like to trade but you do not know where to begin and what is the best forex broker for the US clients. We are explaining everything you need to know about trading forex. You will find answers to the questions such as is forex trading legal in the USA, how to trade forex in the USA and what are the forex brokers that accept US clients. Additionally, you can get extensive information about forex brokers in the USA and read US forex broker reviews.
US forex clients can choose between two options; onshore forex brokers or offshore forex brokers. There is a limited number of onshore forex brokers in the US. Onshore means the broker is located in the US – same country with where the client is located. Offshore is the opposite – the forex broker is stationed out of the US but still serves to the US forex clients.
There are only a few forex brokers that are onshore which means located in the US and Forex.com (Gain Capital) is the one that we like the most with respect to the reliability, customer services, fees and commissions.
On the other hand, there are several offshore forex brokers that accept US clients. FXChoice, AAFX Trading and PaxForex are the one that we favor the most.
PaxForex
PaxForex was founded by a team of professional traders in 2010 and is registered in Saint Vincent and the Grenadines. The company’s owners have extensive experience as traders and dealers in the Forex, stocks, options and CFDs markets. They have gained their experience through working for the prestigious forex brokers for years in managerial positions.
PaxForex owners have extensive experience as traders and dealers.
PaxForex Account Types
PaxForex offers a variety of different account types to ensure that there’s something for every need, from the newbie traders to forex veterans. There are a total of five trading accounts types for the traders’ choice; Cent, Mini, Standard and VIP.
PaxForex Trading Platforms
PaxForex provides the industry’s most commonly preferred trading platform, MetaTrader 4. The MT4 platform is available in its traditional desktop format, as well as on mobile devices via the MT4 mobile platform.
PaxForex Withdrawal and Deposit Methods
PaxForex clients can choose withdraw and deposit funds into their account through Wire Transfer, Credit / Debit Card, Neteller, Skril, OkPay, Qiwi, FasaPay, Perfect Money, WebMoney, UnionPay, Bitcoin, Ethereum and Uphold.
Forex.com
Forex.com is one of the few forex brokers that accept clients from the US. The brand is owned and operated by an industry giant; GAIN Capital Holdings who has been around for more than 20 years. The important point is that Forex.com is headquartered and regulated by CFTC and NFA in the US which means that Forex.com is not an off-shore entity. I would recommend Forex.com for all my followers who are residents of the US. It is a reliable and customer oriented forex broker. If safety of your funds and reliability is your primary concern, then Forex.com is the best answer between the three forex brokers that accepts clients from the US.
Forex.com Account Types
Forex.com offers two different account types; Standard Account and ECN Account. Spreads goes as low as 1.0 pips for EURUSD on Standard Account which is very competitive compared to industry standards. Minimum initial deposit required for Standard Account is zero which means that you can open an account and verify it without depositing any funds. The Broker also offers ECN like account on their exclusive trading platform called Advanced Trading Platform.
Forex.com Customer Support
Forex.com provides customer support in four languages; English, Spanish, Italian, Arabic. Live Chat is prompt to answer your questions and very informative. There is customer support for 24 hours. The Broker offers extensive market analysis and educational material on their web site.
Forex.com Trading Platforms
Forex.com offers its own exclusive trading platform called Advanced Trading Platform in addition to conventional MetaTrader 4. So, clients are given chance to choose between those two trading platforms. Advanced Trading Platform comes with a highly customizable dashboard and trade preferences, useful charting tools, more than 80 technical indicators, extensive drawing tools and integrated trading strategies with hundreds of predefined templates to choose from.
Forex.com Withdrawal and Deposit Methods
Investors can deposit and withdraw funds by credit card, bank card and wire transfer. Digital wallets such as Neteller, Skrill, Sofort are not available for the moment.
AAFX Trading
AAFX is also among those rare forex brokers accepting clients from the US. It is headquartered in Saint Vincent and the Grenadines and regulated by SVG FSA. The company is founded in 2013, so passes one of my criteria of being a reliable forex broker. Negative balance protection feature should be noted as well. Not too many forex firms provide this feature. Those of you who have been trading since 2015 (SNB’s abrupt EURCHF 1.20 removal) would know the significance of Negative Balance Protection. Spreads are tight and they offer a lot of options in terms of deposit / withdrawing funds.
AAFX Trading Account Types
AAFX Trading provides two different forex trading account types for its clients. The first one is Fixed Account. As you can guess from the name, the spreads on instruments don’t change depending on the time of the day or volatility. Spreads are fixed and 2 pips for majors. Traders can choose between USD, GBP and EUR for their account currency. Maximum leverage is 1:2000 for accounts up to $20000 and 1:1000 for account bigger than $20000. AAFX Trading doesnt charge any commission on the top of spreads for executed trades. Traders are allowed to use Expert Advisors (EA) on this account type and minimum deposit is $100.
The second account type is ECN Account. ECN Account has exact same specifications with Fixed Account other than spreads. Spreads could go as low as 0.3 pips on ECN Account compared and the spreads are variable.
AAFX Trading Customer Support
AAFX Trading offers customer support in many languages including Arabic, Chinese, Czech, Croatian, Danish, Dutch, English, French, German, Greek, Indonesian, Indian, Italian, Irish, Japanese, Korean, Malay, Norwegian, Polish, Portuguese, Romanian, Russian, Slovak, Spanish, Swedish, Thai, Turkish, Ukrainian, Urdu and Vietnamese. There is Live Chat feature on the web site where you can get accurate and quick answers to your inquiries. Another important point about AAFX Trading is that the Company is one of the rare off-shore forex brokers that accept clients from the US as I mentioned at the introduction of the review.
AAFX Trading Platforms
MetaTrader 4 is the trading platform that AAFX Trading offers to its clients. In addition to PC desktop version, MetaTrader 4 for MAC, MetaTrader Web and MetaTrader Mobile are also provided by request. MetaTrader 4 is the most commonly used trading platform that comes with a huge bag of trading, charting and monitoring features such as Expert Advisors, Technical Indicators and 9 different timeframes. AAFX Trading doesnt only provides the trading platform but also offers informative tutorials for the novice traders who have not used MetaTrader 4 before.
AAFX Trading Withdrawal and Deposit Methods
AAFX Trading clients can use eight different methods for depositing and withdrawaing money. These methods are Wire Transfer, Debit Card, Credit Card, Web Money, Skrill, Neteller, Fasapay, Bitcoin. I should point out that there are not too many forex brokers that offer Bitcoin as deposit and withdrawal method. Even though, international wire transfer and credit card are my two favorites for financial transactions with forex brokers, having Bitcoin as an option is a big plus.
FxGlory
FxGlory was founded in 2011 and is registered in St. Vincent and the Grenadines which is a popular destination for online forex and CFD brokers. The Broker is not regulated by any financial watchdog which means that there is not any authority that oversees the financial services offered by FxGlory.
FxGlory Account Types
FxGlory provides 4 different types of trading accounts to cater for its diversified clientele base. These account types are Standard Account, Premium Account, VIP Account and CIP Account. The clients get the same fixed spreads and high leverage on Standard and Premium accounts. Micro lots are only offered on Standard accounts. On the other hand, VIP and CIP accounts come with lower leverage compared to Standard and Premium accounts but also with lower trading fees.
FxGlory Customer Support
Local customer support is available for 6 countries in their native languages. Clients can reach the support team vio email, web contact form, live chat and phone.
FxGlory Trading Platforms
FxGlory provides the MetaTrader 4 trading platform to its clients for free. Because of its reliability and execution speed, the MT4 has always been popular among traders and forex brokers.
FxGlory Withdraw and Deposit Methods
FxGlory clients can deposit and withdraw funds through an abundance of methods. Those methods are Wire Transfer, Credit / Debit Card, Neteller, Skril, Payza, WebMoney, EPay, Bitcoin, Ethereum, Litecoin, Ripple, Perfect Money and SticPay.
LMFX
LMFX is an offshore forex broker that was founded in 2015. A company named Global Trade Partners Ltd. owns LMFX and the parent company is located in North Macedonia according to Terms of Business file. Besides, there is another company called GTP Global Solutions Ltdw which is based in Sts Vincent and Grenadines that provides payment services for LMFX. Thus, LMFX is associated with two different entities of which one is located in North Macedonia and other is located in St. Vincent and Granedines.
LMFX Account Types
LMFX gives its customers a choice of three different account types for different trading style and experience. Those accounts are Premium Account, Zero Account and Fixed Account.
LMFX Customer Support
LMFX assists its clients through various methods including live chat, email, web contact form and phone. The support team is swift to respond to the questions with informative content. Their web site features an education section where traders are able to access economic calendar and several forex calculators. Those two tools are very handy for veteran traders however, the web site lacks the educational and informational material for novice traders.
LMFX Trading Platforms
MetaTrader 4 is the trading platform provided by LMFX to its clients without extra charge. The Broker does not offer any other trading platform which makes LMFX a MetaTrader 4 only broker. MT4 has become a standard in the forex industry due to its reliability, charting tools, indicators and other free features.
LMFX Withdraw and Deposit Methods
Clients of LMFX are able to deposit or withdraw funds via wire transfer, credit card, debit card, Neteller, Skrill, fasapay and VLOAD. Since LMFX is not a regulated forex broker, the potential clients are recommended to deposit required minimum deposit at first instead of risking a bigger amount. Following the broker gained your trust and you are feeling more comfortable with their services, you may deposit further.
AZAForex
Established in 2016 and regulated by SVG FSA, AZAforex has been a well-known broker. The Broker operates offices in the United Kingdom and Saint Vincent & the Grenadines. AZAforex offers its clients the modern Mobius Trader 7 trading terminal for desktop and mobile. Clients of the broker can also utilize the service to transfer funds between accounts at market spreads. ECN trading with fixed spreads is available at AZAforex.
AZAForex Account Types
You can trade with leverage ranging from 1 to 500 with AZAForex. If you wish to boost your trading account’s leverage to 1:1000, make a deposit of 500 to 2000 USD and submit a request through the Client Portal.
AZAForex Customer Support
Customer service is crucial to any broker’s or company’s success. AZAFX provides customer service through the following channels: Live Chat, Email, Online Form, Call Back and Social Media. AZAForex staff is trained to assist clients with market, trading, and operational questions. Live chat and phone are the quickest ways to contact the customer service representatives.
AZAForex Trading Platforms
MetaTrader 4 is the trading platform provided by LMFX to its clients without extra charge. The Broker does not offer any other trading platform which makes LMFX a MetaTrader 4 only broker. MT4 has become a standard in the forex industry due to its reliability, charting tools, indicators and other free features.
AZAForex Withdraw and Deposit Methods
You can deposit and withdraw using to and from AZAForex using crypto currencies, Bank Transfer, Credit / Debits Card, ADVCASH, Payeer, Perfect Money, Capitalist and Kuna. With the exception of wire transfer, which takes between 3 and 5 business days to arrive in your account, the most of those payment choices are instant. We recommend depositing and withdrawing through crypto currencies due to low cost and speed.
One of the biggest misconceptions among forex traders is that forex is prohibited in the US. This is incorrect. Online forex trading is regulated and allowed in the US under the supervision of CFTC and NFA. Nevertheless, there are some limitations. Although it could be a double-edged sword, leverage is what makes forex trading compelling for investors. The leverage enables traders to open orders for larger contract size with little capital. Some offshore forex brokers offer leverage up to 2000:1 to attract clients. On the other hand, US authorities believe that high leverage encourages investors to overtrade and take high risk without really understanding it. This is why regulations in the US restrict leverage to 50:1 on major forex pairs and 20:1 on minor pairs. Another limitation is about hedging. Hedging is a strategy that is used to reduce the risk of a losing trade. Some traders prefer to hedge their losing trade by opening another trade on the same pair in the opposite direction. However, this is not allowed in the US. The regulators in the US believe that hedging is not beneficial for traders due to the increased cost resulting from paying double spread. As a matter of fact, US forex brokers are obliged to enforce First-In-First-Out (FIFO) rule which requires forex traders to exit from the existing orders on a pair in order to be able to open a new position on the same currency pair.
An offshore forex account is simply a forex account that is opened at an offshore forex broker for the purpose of trading in online forex.
Such a forex account is described as offshore because the broker, thus the account, is located in a jurisdiction that is outside of the account holder’s home country and usually on an island far away.
The location is critical because the offshore broker must be established in a country where there are looser regulations and fewer constraints, so making it easier to trade forex. This type of offshore brokers work with clients from all over the world. They possess the essential knowledge and experience regarding taxation, economic and political factors that may considerably affect the trading process.
Trading forex through an offshore forex broker comes with many advantages. Lower spreads and high leverage are two most important of those. Additionally, traders would be able to enjoy the benefits of bonuses and promotions that are offered by the offshore forex brokers.
Everything has started with the Great Financial Crisis (GFC). If you have watched the documentary Inside Job or the movie Big Short, you already got the idea. Brokerage firms have invented complicated investment products for the purpose of further profit and market diversification. Those products were presented to the clients with the pledge of high returns. Due to their obscure nature, the clients were not able to understand the risk that they undertook through acquiring those derivative products. After major financial institutions, such as Lehman Brothers, Merrill Lynch and AIG, went out of business at the financial crisis in 2008 – 2009, US regulators took serious measures and brought tighter rules and regulations for the financial sector. Leveraged investing, thus forex trading, suffered the most from the new stricter financial rules since it was the main culprit for the turmoil. Maximum leverage for forex trading was lowered down to 50:1 and acquiring brokerage license from NFA and CFTC was set to 20 million USD which makes it way more expensive for forex brokers to operate in the US compared to other jurisdiction. For the sake of comparison, note that Forex brokers in the UK must hold a minimum capital of 1 million GBP in order to provide forex brokerage services, while the requirement is 1 million EUR in Cyprus and 1 million AUD in Australia. Due to low leverage and high capital requirements, profit prospects of forex brokerage are not that attractive in the US. Thus, there are only a handful of brokers located in the US that provides forex trading services to the US traders and higher operational cost leads those brokers to pass higher fees on the traders.
There are only a few forex brokers that are onshore which means located in the US and Forex.com (Gain Capital) is the one that we like the most with respect to the reliability, customer services, fees and commissions.
High Leverage: In the aftermath of the Great Financial Crisis of 2009, US regulator CFTC decided to lower the maximum leverage to 50:1 for retail forex transactions. On the other hand, offshore forex brokers carry their operations in the overseas countries where there are usually lighter regulations and restrictions. Therefore, offshore forex brokers can leverage from 100:1 to 2000:1.
Bonuses and Promotions: Offshore forex brokers are capable of offering compelling bonuses and promotions that US forex clients would not be able to otherwise receive from US forex brokers. This is because offshore forex brokers are taxed less than US forex brokers and thus they can share some portion of tax savings with the traders. The bonuses and promotions usually come in the form of free deposit bonuses, free trading VPS and free analysis tools.
Less Paperwork: Offshore forex brokers can open a trading account within a few hours for US clients while it may take up to several days to open a forex trading account with a US forex broker. The less bureaucracy expedites the entire trading operation including registration, funding and money withdrawals.
Automated Trading: Offshore forex brokers support automated trading whereas US forex brokers are hesitant on this matter. Automated trading is the use of computer programs (Expert Advisors) for executing trades. Expert advisors enter and exit trades with respect to the predetermined set of rules and preferences. Traders can connect these systems to the trading platform and automatize the whole trading process. Automated trading has several benefits such as minimizing the role of emotions for trading decisions, preserving discipline and improved order execution speed.
No Hedging Restrictions: According to NFA regulations, US forex brokers have to follow FIFO rule that restrains traders from hedging. In times of unexpected volatility, some forex traders prefer hedging their trades by opening a trade in the opposite direction on the same currency pair. However, NFA’s FIFO rule prohibits traders to open simultaneous trades on the same currency pair which means that traders have to close the first trade in order to be able to open a new trade on the same pair. This rule is not implemented by the offshore forex brokers.
All the advantages listed above come at an expense and trading forex with an offshore forex broker possesses some inherent risks. The light regulations and rules that are the reason for the advantages of offshore forex brokers are the very same culprit for the drawbacks. The most popular offshore countries for forex brokers are Belize, Saint Vincent and the Grenadines, British Virgin Islands, The Bahamas, Mauritius, Marshall Islands, the Seychelles and Vanuatu. Some of those countries have regulated forex trading and the brokers have to adhere to certain capital and operational requirements in order to be able to provide services. On the other hand, some of the offshore countries have no regulation whatsoever which increases the possibility of the forex broker being a scammer. Scammer forex brokers are never shy of employing strategies that would create unfavorable trading conditions for the sake of clients’ loss. They may make use of certain platform plugins in order to manipulate the order execution time, spreads and slippage. You may also have a hard time when you try to withdraw your funds, let alone the profit since the unregulated brokers are aware that there is no authority body in the offshore country that will go after them for their wrongdoings. The capital requirements for founding a forex broker in the offshore countries are lower than for founding a broker in onshore countries such as the US, UK, Australia, Germany, Cyprus, etc… The brokers would only need $28000 capital in Mauritius and $2000 in Vanuatu to become eligible in order to provide forex trading services. On the other hand, the US regulators require $20 million, UK regulator FCA requires at least 1 million GBP and Australian regulator ASIC requires at least 1 million AUD. Therefore, it is highly likely that onshore forex brokers have a stronger financial outlook compared to the offshore forex brokers.
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