FOREX.com Review | The Ascent

Top perks

FX-trading

The foreign exchange market is the world’s most active market. Investors around the world can trade 24 hours a day, five days a week. Most of the large stock brokers don’t offer access to the FX market. FOREX.com gives investors access to over 80 currency pairs and according to their site, they are the largest FX broker in the US in terms of client assets.

Financial strength and security

FOREX.com is registered with the Commodity Futures Trading Commission (CFTC), and is regulated in four Tier-1 jurisdictions, including the US, UK, Canada, and Japan. This makes it a low-risk broker for FX trading. FOREX.com’s parent company is StoneX, a publicly traded company on the NASDAQ (ticker: SNEX).

Advanced trading platform

FOREX.com has an easy-to-use trading platform and traders have several versions to choose from. Users can trade on FOREX.com’s web platform, on their iPhone and Android apps, on their desktop trading platform, or on a third-party FX trading platform called MetaTrader.

Free FX trading education and research tools

FOREX.com offers free and comprehensive forex trading courses for beginners and experienced traders. FOREX.com has teamed up with TradingView, one of the top charting technology companies, to offer advanced tools for technical analysis and trading. There are over 90 individual indicators to choose from. Traders can also create their own customized indicators and charts.

Active Trader Program

High-volume traders receive exclusive benefits such as cash rebates, earned interest, waived bank fees, and dedicated one-on-one support. These cash rebates can reduce trading costs by up to 15%, and traders can earn up to 1% annual per year (APY) interest on their average daily available margin, 25 times more interest than the national average for bank accounts.

To qualify for this Active Trader Program, investors must make a minimum initial deposit of $10,000 or trade $50 million in a calendar month. To remain eligible, investors must trade a minimum of $50 million per quarter or keep an average account balance of $25,000.

What could be improved

Limited access to products for US traders

The products and services that FOREX.com offers depend on a trader’s location. Investors in the US can only trade in FX, metals, and futures with FOREX.com. They cannot trade in stock, bonds, or funds due to regulatory restrictions. To invest in the stock and bond market, you need to open an account elsewhere.

No negative balance protection for US traders

Most stock brokers offer up to 4:1 leverage in a brokerage account. This type of account lets you buy and sell stocks and other types of investments. This means for every $1 in an account, a trader can place a trade worth up to $4. FX brokers, by US law, can offer an investor 50:1 leverage. So, for every $1, a trader can place a trade worth up to $50.

Using high leverage can result in large losses. Negative balance protection protects investors from losing more than they deposit into their accounts. FOREX.com does not offer negative balance protection for US traders. This means that US-based traders are responsible for paying more money than they initially deposited into their accounts. In other words, if a FX trade goes against a trader, the loss can be greater than the amount in the account, and the trader owes that money to the broker.

Let’s say a trader deposits $10,000 and enters a FX trade with a 5:1 leverage. That position would be worth $50,000. If the trader’s position suddenly dropped by 25%, the loss due to the leverage would be $12,500, or 125% of the deposited money. The $10,000 initial balance would not be enough to cover the losses, and the trader would owe the broker $2,500.

UK website offers more resources than US website

Due to the regulations in the US, FOREX.com has a website specifically designed for US traders. FOREX.com operates in over 140 countries and offers trading on asset classes including forex, indices, stocks, and commodities through “contracts-for-differences” (CFDs).

A CFD is a financial contract that allows traders to speculate on an investment without having to own the underlying asset. CFDs are not allowed in the US With more investments offered for non-US based traders, the UK website offers more educational resources, tutorials, and tools than the US website.

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