Forex and CFD brokers accepting US clients

The US GDP is one of the most powerful in the world. As a result, the US dollar seems to be the most used currency for commodity trading. The stock and foreign exchange markets use it as a major currency.

The foreign currency market in the US has some of the stringent trading regulations. It is because a large number of investors are joining the forex market. There is nothing wrong with more investors, but this has increased forex scams.

Some ways that forex brokers may scam people include:

  • Introducing hidden fees during trading
  • high margin ratios that expose traders to heavy loses
  • fake forex brokerage firms that only steal from people who deposit their funds
  • firms that engage in financial improprieties

These exhobitant forex brokers prey on inexperienced traders and rob their funds. As a result, the US government has imposed stringent trading guidelines and standards. To conduct trading with US clients, forex brokers have to get regulated in the United States.

Several US clients choose to deal with brokers from other countries, which is illegal. If customers choose the unsuitable broker, they risk losing their money. As a result, the number of forex brokers in the United States is limited.

Why do most forex brokers fail to accept clients from the United States?

A license from the National Features Association is necessary for traders. Especially those from the United States to trade FX on any broker’s platform. As simple as it seems, getting licensed in the US as a trading broker is difficult.

This license has a rule that you must have a capital deposit of 20 million dollars. This fee is set aside besides other fees for licensing. Most forex Brokerage firms do not make that kind of profit even annually.

As a result of this, getting access to the US market is hard. Aside from that, there is a limit on how much leverage US traders can use. They are only allowed 1: 50. The enjoy this kind of margin is minimal compared to other countries.

Trading in the United States yields a lower profit than trading in other countries. That is also why, compared to the United States, many brokers choose to trade with European and Australian countries.

The regulations also impose a hefty penalty for any trading malfeasance discovered. Penalties placed for breaking these rules in the US are so severe. A brokerage business could lose a month’s worth of income. As a result, they are less likely to accommodate US traders.

The market is large and there are a few brokers licensed. However, there is fierce competition among the few forex brokers in the United States. It is because in the US, stock trading is costly for traders but profitable for brokers and traders.

Rather than trading on currencies, Most US traders deal with inequities. It is common knowledge that purchasing shares is expensive than purchasing forex currencies. Many forex brokers in the United States have to compete with traders who trade stocks for a profit.

CFD trading is illegal in the United States. On the other hand, other nations trade in CFDs although most prefer not to like the UK. The United States has enacted strict regulations to prevent Americans from CFD trading.

What are the rules for trading forex in the United States?

Various bodies in the United States have the task of regulating forex brokers. Some of them include:

  • commission on commodities futures trading (CFTC)
  • the National futures association (NFA)
  • the securities investor protection cooperation (SIPC)

In the United States, the NFA and the CFTC play primary roles in forex regulation. The National Futures Association have rules that forex brokers in the US follow.

The NFA’s principal goal is to prevent fraudulent operations in the forex markets. They do this by ensuring secure transactions. This means that they can verify transactions through clear records from brokerage businesses. They also safeguard the safety of all traders. This is through requiring forex brokers in the United States to get licensed.

The majority of laws are in place to protect new investors, particularly those unfamiliar with forex trading. The NFA established the following rules:

Before the NFA or CFTC, the following institutions register under the following categories:

  • The retail forex exchange dealer (RFED). It’s a person or company that works with future and option contracts. They execute these contracts on behalf of traders unable to deal in other locations.
  • The forex exchange trader (FED). It is a company or person that generates money through purchasing foreign currency. They earn from the differential between the purchase and sale prices. The prices get determined by market conditions.
  • All traders and personnel, in the United States or elsewhere involved in any aspect of the stock or currency exchange process. Swap traders, commodity pool operators, introducing brokers, and others are a few examples.

The FIFO legislation, which went into effect in 2017, is one of the most well-known regulations. This rule explains that the order in which positions open and close is first in, first out.

What this rule does is limit hedging in forex. It targets traders to stop traders from opening both a short and long position on the same currency pairs. This law led to many investors seeking broking firms from outside the US.

Many traders made profits from hedging but this regulation got in their way. According to the NFA, another rule is no changing prices when customers make orders. It allows changing prices only if the changes could benefit the client or investor.

This rule brings transparency when trading. It protects the traders from brokers that introduce hidden fees during the trade.

Other rules that the NFA offer are limited leverage or margin ratios. It reduces the chances of the brokers and traders making a good profit. On the other hand, this rule protects the traders from tremendous losses.

Traders can use the NFA online portal to confirm if a forex broker is regulated.

Trading using margin is risky as it is profitable. As much as you can make the profits, you can be sure that it can amplify the losses.

What forex brokers can you use in the US?

Several brokers are registered and regulated to perform trading operations in the US. Some of them are;

Forex.com

Forex.com is a publicly-traded company that is a part of Stonex Groups Inc. It was founded in 1999 and has been in operation for over two decades. It offers around 175 foreign exchange currencies in 180 countries worldwide.

The clients that have registered with forex.com vary. From institutions and even people that trade personally.CFTC and NFA regulate forex.com that licensed it to deal with clients from the USA. Other countries that can access forex.com include some in parts of Asia, Europe and North America.

Its headquarters is in the US. Forex.com uses platforms like MT4, MT5 and its own forex.com trading platform. It has a demo account and tutorials that help new traders to understand how forex works.

Forex.com offers a leverage ratio of 1:40 for US citizens. Other European countries have leverage of 1:30, while Australia enjoys a leverage ratio of up to 1:400.

Forex.com has three types of accounts, a standard, commission and Direct market access account.

The standard account offers competitive spreads without any commission. It means that they charge you from the forex spreads. This account helps the customers reduce trading costs by over 15%.

The commission account has low spreads and low commissions. They charge a 5% commission when you trade with funds of up to $100,000. An example of the forex spread in the commission account is the EUR/USD with a 0.2 forex spread.

A customized account for seasoned traders is the direct market access trading account. It has a very active market with a lot of liquidity. Traders can access prices from global banks without any additional markup. The minimum deposit to start trading with the Direct market access account is $100,000.

The fees depend on the account that you are using. Some other fees that get charged are non-trading fees. The non-trading payment is for a dormant account without a base currency of $ 10,000 and above. They charge $15 if the account has not been active for 12 months.

The least deposit to start trading with forex.com is $50. Even though they recommend around $250 to be flexible enough with different securities.

They have no withdrawal charges when withdrawing any money from the accounts. Forex.com has customer support available for 24 hours in the five days of trading.

OANDA

This trading firm was founded in 1996 and has been in business for over two decades. Dr. Michael Stum and Dr Richard Olsen founded it with the goal of trading currencies and data. You can create an account from any location on the planet. They have locations in Asia, Europe, and the United States.

Several regulatory bodies in the United States and other countries regulate OANDA. Some of them are the TFC, NFA, CTFC, FCA, ASIC, IIROC and the MAS. Trading with CFDs is not permitted in the United Kingdom or the United States.

OANDA uses the MetaTrader 4 and MetaTrader 5 trading platforms. It also provides the option of automatic algorithmic trading. You can get a selection of trading charts for examination and research. This trading broker offers historical exchange rates data for trade pairs from 1990.

This trading broker offers a variety of trade teaching materials. They offer webinars and video lessons where new traders can benefit from. They also have trading blogs and written trading manuals.

You can practice trading using the demo account in addition to the training materials. Traders can choose from over seven different types of accounts at OANDA. Each account has its own set of parameters, and clients are free to utilize anything they see fit.

A corporate account with EUR/USD spreads of 0.7 pips. US traders can use the IRA account that is purposely made for them. The business entity accounts for Canadian traders as well as European business owners.

The accounts include:

  • The personal account- has no least deposit and leverage of 1:30. 
  • The professional account has different ways of payment and leverage of 1:100.
  • The joint account offers leverage of 1:30.

They have an Islamic account for Muslims who follow the sharial laws. These stops them from using certain methods and interests from the normal accounts. Finally, American traders who can trade with a capital of $10 million have an option. They use the eligible contract participant (ESP) account.

Oanda has a minimum deposit fee of 0. You can deposit any amount and start trading. They have a withdrawal fee that ranges depending on the payment platform you use. But, the first withdrawal using a card every month is free.

It has a mobile, desktop and web version. The reason is every trader has different preferences when using the OANDA broker. The fees like trading fees in commissions, conversion fees, spreads and financing rates.

If you haven’t used your account in a while, you’ll be charged an inactivity fee. Customer service is 24 hours a day, but they are only open from Sunday evening to Friday evening.

E toro

This trading firm was established in 2007. It got registered and licensed for it to sell in the United States in 2018. Etoro is available in more than 100 countries and has a user base of up to 17 million dealers.

Many regulating organisations regulate e Toro within and outside the US. But, in the USA it is a member of the SIPC, FINRA and registered under FinCEN for business. In other countries, it is regulated by the FCA, ASIC.

It is available in 44 US states and US traders can access up to 20 cryptocurrencies for trading. traders from the US can only trade cryptocurrencies using Etoro. There are two types of accounts; the retail account, and the professional account.

The retail account is for traders who have not started trading professionally. It requires a minimum initial deposit of $200. This account is also limited so that traders cannot use leverage for trading.

It provides negative balance protection to keep customers funds safe. It prevents traders from losing all their money in a risky trade.

Professional traders use the professional account. E toro has measures in place for verification. They ensure that anyone opening a professional account is actually a professional. It has a leverage of around 1:400 and a negative balance protection feature.

They have an Islamic account for Muslim traders. It is because muslims get excluded from certain interest charges. The fees or interests considered illegal under sharia law. A few of them are like overnight costs, huge spreads, and trading commissions.

Muslims who want to trade with eToro, the Islamic account needs a minimum investment of $1000. They provide teaching resources and blogs on cryptocurrencies and stock trading. Their platforms provide access to the tools such as movies and webinars.

The least deposit to open an account with eToro varies depending on the client’s location. Clients from the United States can begin with as little as $50, with the average cost hovering around $1000. This amount varies depending on where you are from.

It has a copy trader platform for inexperienced traders. This is where you can use an experienced or professional trader and copy their trading moves.

For the traders in the US, they can withdraw more than 30 dollars for free. $30 is the withdrawal limit. For traders from other countries, Etoro has a withdrawal fee of 0.5% of the total withdrawal.

Etoro has a user-friendly and accessible mobile, desktop and web application for trading. Other fees charged include; a conversion fee of 0.1% for fiat and $20 for cryptocurrencies.

There is a charge on a dormant account of $10 of 12 months and a commission of 0.18%for short positions opened. It is safe and secure with SSL encryption to protect users data.

They have quality customer service available via live chat, email and telephone numbers. Furthermore, they have different clubs that have different services. Example, if you reach a certain account balance, you access customer service often.

IG INDEX

This is a publicly-traded firm that trades under the name Invested gold index. Stuart Wheeler established this company in 1974. Traders have voted it the best Forex broker in the United States for 2020. It is well-known for being the largest CFD trader.

In 2019, IG launched currency trading, with over ten cryptocurrencies and six base currencies. They trade a range of assets including equity indexes, commodities options, and Turbo24. Because CFD trading got prohibited in the US due to its high risk, traders can instead trade FX.

After registering under the RFED, The NFA and the CTFC regulate it in the United States. It is also registered with the leading FX regulators in Europe and Asia. You can create seven different sorts of accounts on IG. In the United States, it does not provide an Islamic account.

On IG, there are over seven different sorts of accounts. Some of them aren’t available in specific locations due to legislation. The Trading IG account is an IG account for traders in the United States. It has more than 80 forex pairings, as well as negative balance protection and a 1:30 leverage.

The interface is user friendly and takes a few minutes to open and verify an account in the US. The minimal deposit when you open an account on IG is $250. They have a demo account for practice before opening a live trading account.

When you open an account on IG, some materials can help any new or experienced trader with trading tips. They also have courses and blogs to help all levels of traders to trade. They give access to charts and the market to get more insight.

There are no fees for withdrawals or deposits in an IG account. Other expenses, such as overnight fees and inactive fees of $12. The inactivity costs get charged after two years of inactivity. You can use debit or credit cards, PayPal, or wire transfers to withdraw and deposit.

Withdrawals through wire transfer cost $15, plus there’s a conversion fee for transfers that aren’t in US dollars. Spreads on key currency pairs, such as the EUR/USD, can range from 0.9 to 1.3.

Their customer support is available from Sunday evening to Friday. You can contact them through live chat, email, or phone.

Interactive brokers

Interactive Brokers was established in 1978 and has received ratings from numerous traders. It is well-known for its inexpensive trading fees. It has received honors in the United States, including the title of the best online broker.

It covers a broad market of 135 marketplaces in 33 countries across the world. They deal in foreign exchange, bonds, stocks, mutual funds, and futures. Traders can trade 105 different FX pairs.

The SEC and the CFTC regulate it in the United States. It is also a member of the SIPC, making it one of the few brokers available to US traders. Several other key trading nations control it, making it safe to use.

For transactions under $100,000, interactive brokers give the lowest leverage of around 1.59 per cent. The rates decrease as the amount of money deposited grows. The margin rates for pro and lite accounts are different.

Two types of accounts offered by Interactive Brokers is the pro and lite accounts. The pro account got created with active traders in mind. It contains features that assist an active trader in gaining low-cost market access. The light account is for inactive traders who trade ETFs and stocks without a commission.

Interactive brokers have blogs, videos and webinars on their platform. It provides the necessary information for traders to know how to trade any asset. They even have tests to assess a trader’s degree of knowledge on various trading topics.

Interactive Brokers does not require a minimum deposit to start an account. If you wish to use margin to diversify your portfolio, you must put down a minimum of $2000. You can fund your account with direct debit card deposits only if you live in the United States.

They accept bank transfers but not wire transfers when funding the account. The first withdrawal of the month is free, but the next withdrawals are subject to a fee. The fee varies depending on the payment method.

No commission for stocks or ETFs for US traders qualifying for trust accounts. Compared to other platforms, they feature reduced trading fees for the other portfolio. Aside from that, they don’t charge an inactivity fee.

The trading system used by interactive brokers is quite user-friendly. They offer a mobile app, a web trading platform, and a desktop program. You can contact their customer care department by email, chat with the I-bot, or phone. However, some customers have complained about service delays when they need assistance.

Nadex

Nadex, which stands for North American Derivatives Exchange, was formed in 2004. It is well-known in the industry for trading binary options. Nadex is an exchange matching contract buyer, not a broker, contrary to popular belief.

IG purchased Nadex in 2009 and equipped it with resources to serve as an exchange matching company. Its offices are in Chicago, Illinois. It covers various markets, including stock indexes, forex pairings, commodities, and equity indexes.

The CTFC regulates Nadex in the United States, providing it access to US traders. Traders on Nadex have access to 11 different forex pairs. The three types of accounts offered by Nadex are; 

  • The individual account for US traders
  • The individual account for foreign traders 
  • The business account.

Individual US accounts are for US citizens. While international clients use the other individual account. Companies or groups of people who trade as a corporation use the business account.

Nadex has classes and videos that give traders more knowledge on how to trade. They have a lot of educational videos and blogs about binary options. They feature a demo account that new traders can use to practice binary options trading.

They have an easy-to-use interface that makes it simple to open an account and begin trading. To begin trading, you will need to pay a minimum of $250 in fees. They do not charge a deposit fee for any ACH bank transfers.

Wire transactions are subject to a $25 charge. The $10 monthly inactive fee for accounts that have been dormant for 12 months or more is one of the other expenses. Binary options spread, and knockout commissions all cost $1 for entrance or exit of a contract.

For real-time market access and account management, trade with Nadex using a web browser. They have a desktop program and a mobile application depending on customer preferences. The design of the platform is to provide customers with a variety of trading tools. 

The tools can assist them in obtaining market insights from professionals. They can also get real-time market notifications.

In case of any difficulties using the platform, they have a responsive customer care team. You can reach them through their email and chatbox. The customer care team are available 6 days a week from Sunday to Friday.

Does XM broker accept US clients?

XM broker is a Forex broker founded in 2009 and has clients from 200 countries globally. Traders can trade forex pairs, stock CFDs, Commodity CFDs and equity indices. They offer leverage rates ranging from 2:1 to 30:1. 

However, they do not admit clients from the US due to the laws that regulate forex brokers. It is more specifically due to the Dodd-Frank Act which was passed in 2010 by the US congress.

The Dodd-Frank act got passed after the 2007-2008 financial crisis hit the US. It essentially meant the regulation of the financial sector. It is due to some individual firms making risky trading decisions.

These decisions led to the crashing of the stock market. There was a consequent economic recession in the US. These rules protect the banking industry from big firms. More so those that grow more power than the economy of the US. 

What is the best forex broker in the US?

What anyone would want in a broker might be described in different ways. The best way to find a broker is to look at the quality of services they provide and how much they charge. Many rules are in place to ensure that trading in the United States is safe and fair.

The following comprises a list of the best US brokers in 2021. This is according to several evaluations and trustworthy forex resources. They also got ranked because of their excellent trust scores.

The best broker in the US is the Interactive broker. They have a user-friendly, efficient platform and a smart routing system. They have been in the market for a long period. That is why they gained the trust of many traders in the US with their low commissions in trades.

The second runner up is e Toro. They offer a wide range of cryptocurrencies. this has given a chance for many US traders to explore the market. They have market experience and have diverse opportunities like fiat and alt-coin.

Following in this list is IG brokers and Forex.com. They have implemented features in their platforms. These features have improved the trading experience for US traders. Next is OANDA who have the best platform for beginning traders. This is because of their vast educational resources.

Вывод

There have been many rules placed for brokers and other participants in the US. These rules get enforced to help traders have a fair and transparent trading experience. 

There are forex trading brokers that offer trading platforms to US forex traders. While most of them are doing good, others have given excellent service.

The forex market in the US is among the most active, with almost 17% of forex transactions happening in New York. It shows there is a potential growth to open more forex broking firms in the US.

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