Forex.com review

  • Minimum Deposit: $100
  • Products: Forex, CFD (index, stock, commodity, crypto)

    72% of retail CFD accounts lose money

    Forex.com is a global forex and CFD broker, regulated by many financial authorities including the top-tier UK FCA. Forex.com provides everything you need for forex trading: low forex fees, many currency pairs and lots of technical research tools. At the same time, it lacks some popular asset classes, such as real stocks or bonds. Stock CFD fees are high, and the desktop trading platform is not user-friendly.

    Pros


    • Low forex fees
    • Great variety of currency pairs
    • Diverse technical research tools

    Cons


    • Product portfolio limited to forex and CFDs
    • High stock CFD fees
    • Non-user-friendly desktop platform
    Offering of investments

    The products and services available to you at FOREX.com will depend on your location, and on which of its regulated entities holds your account. For example, while CFDs are not available in the U.S. due to regulatory issues, FOREX.com offers an impressive selection of over 4,500 CFDs for traders living outside of the U.S. Also, knock-out options are now available at FOREX.com in Japan, Singapore, and Australia.

    Cryptocurrency: Cryptocurrency trading is available at FOREX.com through CFDs, but not available through trading the underlying asset (e.g., buying Bitcoin). Note: Crypto CFDs are not available to retail traders from any broker’s U.K. entity, nor to U.K. residents.

    Commissions and fees

    FOREX.com offers multiple execution methods and account types, as well as transparent execution statistics. That said, our research found that FOREX.com is slightly expensive when compared to the industry average.

    Standard account: FOREX.com’s Standard account is the only option available for MetaTrader clients – and would not be my ideal choice. Average spreads are high at 1.1 pips (1.3 in the U.S.) on the EUR/USD, based on typical spread data provided to us by FOREX.com (August 2021). The Standard account will appeal to traders who are willing to pay a premium (in the form of a higher spread) for the benefits of market-maker execution.

    DMA account (known as the STP PRO account in the U.S.): The DMA account is available globally, and is tied to FOREX.com’s proprietary Advanced Trading platform suite. It also offers agency execution and the highest potential discounts at FOREX.com.

    • Typical spreads for this account for the EUR/USD pair during August 2020 were 0.03 pips, which comes to 1.5 pips after adding the round-turn commission equivalent of 1.2 pips in the base tier.
    • The effective all-in cost is nearly the same as the base tier in the Commission account (see below) unless you trade more than $100 million per month (Tier Two), which brings the effective spread down to 1.1 pips. Meanwhile, traders that turn over more than $2 billion per month (Tier Six) would realize effective spreads of 0.7 pips.

    Commission account (U.S. only): The Commission account option is tied to FOREX.com’s proprietary trading platforms (not available with MetaTrader), and requires a $10,000 deposit alongside at least $25 million in monthly volume. It is designed for medium-to-high volume traders seeking discounts from FOREX.com’s Active Trader program (which is also available in Canada).

    • There are five volume tiers with rebates ranging from $2 per million at the base tier to $9 per million at the highest tier (level five).
    • The base commission for the lowest tier is expensive at $10 per Standard lot ($5 per side), which adds about one pip to the typical spreads of 0.8 pips for the EUR/USD (based on August 2020 spread data).
    • After factoring in the $2 discount (equivalent to 0.2 pips), the effective spread is 1.6 pips – this total includes the typical spread of 0.8 pips and the 1.0 pip round-turn commission equivalent (minus the 0.2 pip discount).
    • Bottom line: unless you trade more than $50 million per month, the all-in costs for FOREX.com’s Commission account are practically the same as the Standard account for U.S. residents, the only differences being execution method and available platforms.

    RAW Spread account: FOREX.com’s recently launched RAW Spread account delivers commission-based pricing (similar to its STP account) and volume-based rebates for active traders. The RAW account (along with MetaTrader 5) is now available to FOREX.com’s clients in Canada.

    Market research

    FOREX.com does a great job of centralizing its research within the Advanced Trading platform and keeping it organized for easy accessibility. The only downside with FOREX.com’s research offering is its general lack of video content.

    Research overview: Multiple news channels, automated pattern-recognition modules from Trading Central, and blog updates from FOREX.com’s global research team are all available within the Web Trading platform. Headlines stream from Reuters and a Trading Central-powered economic calendar is integrated across the site and platforms.

    Market news and analysis: FOREX.com produces a variety of good-quality written content each day, covering multiple markets and sector themes. Content includes weekly posts such as its “Week Ahead” series, daily articles produced by FOREX.com’s in-house analysts, as well as integrated resources from third-party providers. For example, research tools powered by Trading Central are directly integrated throughout its suite of platforms, such as its popular Market Buzz, Technical Insight, and Analyst Views modules.

    Video content: Surprisingly, market-based research in video format is practically non-existent at FOREX.com. Experimenting with video by, for example, transcribing some of FOREX.com’s written content into video format, would help FOREX.com reach a wider audience.

    Education

    FOREX.com offers nearly a hundred written articles that are conveniently organized by experience level, with content for beginner, intermediate, and advanced users. Overall, I found these articles to be of good quality and well-organized, bringing FOREX.com’s educational offering just within reach of our best in class rating.

    Learning center: Though there are dozens of platform tutorials available on its YouTube channel, FOREX.com simply doesn’t offer a comprehensive selection of educational videos. Video is where competitors like CMC Markets gain a clear upper hand over FOREX.com.

    Security

    FOREX.com is regulated in several jurisdictions but since laws vary by country, the products offered also vary. For example, CFDs are not available to U.S. clients but are available outside the U.S.

    FOREX.com is a registered FCM and RFED with the CFTC and a member of the NFA (#0339826). Additionally, GAIN Capital UK Ltd. is authorized and regulated by the Financial Conduct Authority (FCA #113942) in the U.K. Globally, the firm is also regulated by IIROC, ASIC, MAS, FSA, and CIMA

    Client funds are kept segregated from the funds of FOREX.com, which helps safeguard clients’ money in the event the company has financial issues. U.K./E.U. clients also have additional asset protection through the Financial Services Compensation Scheme (FSCS), up to £85,000, while Canadian clients are protected by the Canadian Investor Protection Fund. U.S. clients are not as fortunate, as no additional insurance is provided by the company in terms of safeguarding their funds.

    FOREX.com offers negative balance protection, which is mandated under ESMA rules that went into effect in 2018, and guaranteed stop losses at an additional cost for its U.K./E.U. clients.

    However, non-U.K./E.U. client accounts can go negative, as negative balance protection is not offered to them. In plain English, U.S. traders with negative account balances are on the hook for more money than they initially deposited into their accounts. Also, U.S. clients are not offered guaranteed stop loss orders.

    Final thoughts

    FOREX.com is a trusted forex broker that shines thanks to its extensive product offering, excellent platform options and trading tools, and its selection of in-house and third-party market research.

    That being said, pricing is not its strongest feature, and there is a general lack of video content for research and education. However, FOREX.com still delivers a great experience to forex traders of all experience levels.

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