Is forex trading legal in the United States?

Prepare for acronyms. Yes, forex trading is regulated in the U.S. by the Commodity Futures Trading Commission, or CFTC, and requires that trading is conducted with brokers that are registered with the organization as a Forex Dealer Member (FDM) and as a Futures Commission Merchant (FCM). As part of this registration requirement, U.S. forex brokers must maintain membership status with the National Futures Association (NFA), which is the designated self-regulatory organization, or SRO. Brokers must abide by membership regulations enforced by the NFA. In addition, U.S. regulations require that brokers maintain a net capital requirement of at least $20 million in order to be registered as an FDM in order to offer retail spot foreign exchange as a Retail Foreign Exchange Dealer, or RFED.

What are some tips to get started with forex trading?

Depending on your level of experience and the stage of your trading journey, the following tips may help accelerate your forex trading progress. Keep in mind that there are no shortcuts to trading successfully, and in fact, the majority of traders lose money. In speaking with thousands of traders over the years, I have found that those who are more informed typically do better than those rushing to trade without doing the proper research. Choose a regulated broker: The first step to getting started with forex trading is to choose a broker that is properly licensed and regulated in a trusted jurisdiction, such as the U.S.; your country of residence may also affect which brokers you can choose. Seek out educational materials: Most regulated brokers provide plenty of free, good-quality educational content to help new investors and traders learn about financial markets. There are also third-party providers with educational resources that you can access freely; one of my favorites is BabyPips . Set up a free demo account: Nearly all regulated forex brokers offer a free demo account so you can learn how the trading software works without depositing money. The key is to use the demo account solely to learn the software, and not for judging your trading performance — that’s because you may treat demo funds differently than real funds. Set up a small live account: Start with an amount of risk capital that you can afford to lose. The idea here is to judge your trading on a percentage gain basis, and not on how much money you're making or losing. If you can tweak your trading strategy to produce consistent results, then you can consider scaling your trading capital by depositing more money, always using funds you can afford to lose. Learn to analyze market news and research: The best brokers provide plenty of research content and trading tools to analyze the market for opportunities, as well as streaming news headlines with fundamental and technical analysis on market prices. Learning how to analyze this information can help you decide which trading opportunities to act upon and which to skip, in addition to finding opportunities on your own.

How do I check if a broker is regulated?

To verify a forex broker’s regulatory status in the U.S., use the BASIC (Background Status Information Center) tool of the National Futures Association (NFA) on their official website here , which also verifies registration status with the Commodity Futures Trading Commission ( CFTC ). Scams are unfortunately prevalent in the world of forex trading, so verifying that a broker is well-regulated is crucial.

What time does the forex market open in the United States?

While some forex brokers may enable early-hour trading before the trading week starts, generally the market opens globally at 5 p.m. Eastern Time on Sunday — despite banks still being closed in the U.S. — as it is already Monday in Asia Pacific including Tokyo, Singapore and Australia. The forex markets are then open 24 hours a day until just before 5 p.m. Friday to prevent rollover. (There may be exceptions for some U.S. holidays.) There are times when trading may be halted, such as for certain futures products, and some brokers may close trading for all instruments each day, such as from 4:59 p.m. until 5:05 p.m., during rollover time. Conversely, some markets may trade even during the weekend, such as cryptocurrencies, depending on the broker you are using. Bottom line: It's always wise to check the trading hours for the markets you want to trade.

What is the best forex broker in the U.S.?

Among brokers regulated in the U.S., I'm choosing IG as the best forex broker in 2024. IG consistently ranks in first place or near the top of nearly every category we track, including investment options, commissions & fees, trading platforms, mobile apps, research, and education. In addition, IG holds more regulatory licenses than any other broker we review, helping to boost its trustworthiness.

Best US Forex Brokers of April 2024

Written by Steven Hatzakis, Blain Reinkensmeyer
Edited by Carolyn Kimball
Fact-checked by Dayana Yochim

April 03, 2024

The foreign exchange market is the largest financial market in the world, with over $7 trillion swapping hands every day. I’ve been working in the forex industry over the last 25 years, and in this guide I’ll help you quickly learn some key points about the U.S. forex brokerage landscape and what to look for when choosing a broker.

If you are trading outside of the U.S. or not a US citizen/resident, check out our sister site ForexBrokers.com for more resources. Note: All of the top forex brokers we cover are licensed and registered with the Commodity Futures Trading Commission (CFTC) and regulated by the National Futures Association (NFA), ensuring protection from forex scams.

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