Compare The Best Forex Brokers For Beginners In 2023

What Is A Forex Broker?

It is a business that enables you to trade on the forex market. By providing a price for one currency—like the US Dollar—against another—like the Euro, forex brokers do this. Depending on whether you believe the Dollar will gain strength versus the Euro or not, you may then decide whether to purchase or sell this “currency pair”.

This type of service is best suited for novices because of how much support and educational content it offers. FX platforms designed for beginners provide free demo accounts that let you trade without risk and training that explain how the market functions.

Additionally, the currency markets have a large vocabulary all of their own. Every service aimed at new customers ought to provide a brief explanation of concepts like pip, spread, and majors. It should also provide information that will enable you to comprehend how the currency markets function.

How Does A Forex Broker Work?

It makes it easier to buy and sell currencies. In order to function as a “middleman” between a trader and the exchange, forex brokers employ software that users can download or access online. Trading orders used to need to be placed over the phone in the past. This process has been simplified by technology and the growth of online trading.

Apart than allowing users to place buy and sell orders, these platforms typically offer a variety of services. Beginner-friendly forex trading platforms frequently include additional fundamental tools like educational materials and market analysis in addition to all the technical trading elements you would expect from any FX trading platform.

How Should Beginners Choose A Forex Trading Platform?

The most crucial decision for a novice is selecting a safe and secure platform that allows you to learn without immediately putting all of your money at risk. Here are our top 10 suggestions for newcomers looking to select their first forex broker in light of that.

1. Look For Brokers With A Demo Account

With a sample account, you can trade with fake money on the live forex market. You may test out trading without putting your own money at risk and decide if you want to continue.

Most demo accounts give you a set sum of virtual money to use as you like, typically $10,000 or $100,000. You may monitor your performance and determine if you would have made a profit or loss had you been using your own money as the trading experience is much the same as if you were trading for real.

2. Check The Broker Is Regulated

All forex brokers must be governed by the proper financial institutions in your nation. The FCA in the UK or the SEC in the US are two examples of this. You should pick a regulated broker since they provide a lot of investor protection, including a compensation plan that ensures you will never lose your deposit in the event that the broker experiences financial difficulties.

You can use the registration number assigned to each broker to determine whether or not it is regulated. To check if your broker is regulated in the UK, enter the number into the FCA website.

3. Choose A Platform With A Low Minimum Deposit And Trade Size

When you first start trading, it’s crucial to start modest. Today, a lot of brokers let you start trading with just a £10–£20 deposit and a trade minimum of £1. Although while your potential for profit is much lower with transactions like that, there is a lot less danger involved when you’re just getting started.

4. Look For Brokers That Offer Bonuses

It’s common to locate brokers who will double your initial investment as a welcome incentive. With the most generous offers, you can easily increase the amount you are willing to trade by a factor of two.

Some brokers will even give you a bonus without requiring you to deposit any funds onto the site. These can be a fantastic opportunity to practise with some additional cash before putting any of your own at risk.

5. Focus On The Major Currency Pairs

The “majors,” “minors,” and “exotics” are terms used to describe different currencies in forex trading. When you initially start out, you just need to be concerned about the majors because they are the biggest, most well-known, and most traded currencies.

Beginning with the majors reduces the risk of being taken off guard by a rapid change in the market and reduces price volatility. Compared to more exotic currencies like the South African Rand, there is also a lot more educational information available to assist you with trading currencies like the US Dollar.

6. Prioritise A Clean, Intuitive Trading Interface

Choose a trading platform that makes it simple to locate the data you require. The brokers targeted at retail or casual traders, like eToro, are the greatest places to go because they have been created with beginners in mind.

Due to the fact that forex has historically been the domain of specialists, many reputable brokers may overwhelm you with data. It is advisable to stay away from these brokers until you have a lot more experience.

7. Don’t Worry About The Spreads

The spread is the variation in a currency’s buy and sell prices. When comparing forex brokers, you’ll notice that spreads are frequently discussed, and many platforms promote themselves by offering low spreads as a perk. When choosing a broker for the first time, don’t get too hung up on this information; those who frequently and heavily trade should.

As little as one “pip” or even less can separate two brokers’ spreads. A pip is one hundredth of one percent, or 0.0001, so until you trade more, it’s not important to care about them.

8. Accept Higher Prices For A Safer Trading Experience

You may locate brokers that provide better currency rates since they allow you direct access to the forex markets, also referred to as the “interbank rate,” which is related to spreads. You are trading directly against specialists, and there is far less safety from market instability.

When you first start out, it is far preferable to tolerate paying a little bit more for each trade. That typically implies you are more protected from the live market and there is less likelihood that you will be caught off guard by a sharp change in price.

9. Look For Features Like Negative Balance Protection

Many brokers provide benefits to cover you in the event that you are mistaken. Negative balance protection is one of these features; your broker will step in to automatically terminate trades and stop your account balance from dropping below £0.

Also, there are brokers like Capital.com that have extra tools for your benefit. In that instance, Capital will evaluate your trading performance using artificial intelligence and will provide guidance on how to do better.

10. Take Advantage Of Educational Material

There will unavoidably be a learning curve when you first begin trading forex. Choose a broker that offers a lot of tutorials and guidelines to make things simpler for yourself. These manuals can expose you to the fundamental terms used in the industry or introduce you to trading platforms like MT4 or MT5. Or it could just provide you with information on various trading techniques that you might find interesting.

Quick Answers To Key Questions

Can I Get Started With Less Than £100?

Sure, that’s easy. The smallest minimal deposit is often £10, so if your budget allows it, you can start with very little money. However keep in mind that fluctuations in currency prices are very slight, so it would take a lot of time to generate money with a small initial investment.

Leverage is a tool you can use to stretch your budget further. Your broker effectively lends you the money to increase the deal once you make a small deposit, say £5. Some brokers provide leverage of up to 1:30, meaning that with just £5 you may execute a trade worth $150.

There are several drawbacks to leverage as well, so we advise caution here. It is preferable to wait until you have a better grasp of the market before making a deal since if it fails, your losses are doubled.

How Much Does It Cost To Use A Forex Broker?

Normal registration and account creation are free of charge. Often times, all you need to access a sample account is your email address and password; you won’t have to go through the lengthy sign-up procedure.

After that, there will be various fees associated with trading that you must pay. Depending on the broker, you might have to pay a commission per trade or an additional fee on top of the going rate for each currency.

Is Forex Trading Taxable?

Your unique situation and the type of trading strategy you employ will determine this. Paying no tax on gains is conceivable in some circumstances, such as when using a spread betting broker. When it comes to taxes, it’s best to consult an accountant.

Can I Use Copy Trading With A Forex Broker?

Yes. The top platforms provide copy trading tools, which can be a great choice for those just getting started with forex. You can automatically copy the trades of knowledgeable individuals on the network using platforms like eToro.

Can I Trade Forex On My Phone?

Yes. You can download a mobile app from almost all forex brokers. The apps let you buy and sell things. Yet, due to the small screen size of a mobile device like a smartphone, performing analysis can be challenging.

Where Can I Learn More About Forex Trading?

A demo account is one choice for getting started and learning the ropes. If you choose to do that, sign up and get started by clicking the button below. Instead, you could choose to use our tips on how to read charts and apply forex signals, or use a first-time forex trader’s step-by-step tutorial.

Methodology: How Did We Choose The Best Forex Trading Platform For Beginners?

Our panel of novice traders and our internal experts have evaluated and confirmed each platform on this page. Links to comprehensive reviews of each of the aforementioned platforms have been provided on Invezz. While evaluating a platform, we take a number of things into account. This entails opening an account, depositing money, trading, and withdrawing money.

To contrast each of the services, we do web research. This covers ranking charges or fees as well as additional features provided. Finally, for each platform, we combine our personal experience with reliable web reviews. To create a ranking, all of these elements are combined.

No platform indicated on this page has any influence on our ratings or reviews. Nevertheless, if you click on a link and create an account, we might receive an affiliate commission. To learn more, read about our review procedure.

Conclusion

Finding the best forex brokers for beginners in 2023 requires careful consideration and research. The brokers mentioned in this article have been selected based on their user-friendly platforms, educational resources, and customer support services. As a beginner, it is important to choose a broker that not only offers low fees and a wide range of trading instruments but also provides a safe and secure trading environment. By selecting one of the brokers mentioned in this article, beginners can start their forex trading journey with confidence and ease.

FAQs