CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Forex.com was founded in 2001 and is regulated in multiple countries. It offers robust trading platforms for the new trader as well as the professional. Its parent company is GAIN Capital Holdings, which trades on the NYSE under ticker GCAP.
Pricing is transparent, although several types of accounts are offered. For instance, in one account type traders pay the spread on every trade. Other types of accounts charge a commission but the spread is smaller. Forex.com provides the average spreads for all of these types of accounts.
Forex.com currently ranks in the following category:
Forex.com disclosure: Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk.
Great mobile and desktop functionality
TradingView charts built into platform
Higher spreads than international brokers
Only a small rebate for active traders
No negative balance protection
No crypto currency trading in U.S., but it is allowed in other countries
Forex.com is regulated in the U.K., U.S., Canada, Australia, Japan, Singapore, and the Cayman Islands. Since laws vary by country, the products offered in each country also vary. For example, CFDs are not available to U.S. clients but are available outside the U.S.
Client funds are kept segregated from the funds of Forex.com, which helps safeguard client's money in the event the company has financial problems. No additional insurance is provided by the company in terms of safeguarding funds. The exception is in Canada, where Canadian clients' funds are protected by the Canadian Investor Protection Fund.
Client accounts can go negative, as negative balance protection is not offered by Forex.com. Accounts are automatically monitored, however, and if a client fails to have sufficient margin in their account, positions will automatically be liquidated. Due to the fast-moving nature of markets, this won't always prevent negative balances. In plain English, traders with negative account balances are on the hook for more money than they initially deposited into their accounts.
Guaranteed stop losses are offered, but at a cost. Typical stop losses help control risk but are subject to slippage which could cause a negative balance during extreme market moves.
Pricing is transparent and easily found on Forex.com. Also, functional demo accounts are provided for free which give potential clients time to assess the pricing structure before committing real capital.
While Forex.com encrypts their data, little is offered in the way of additional security, such as fingerprint technology or two-factor authentication.
Forex.com's trading platforms accommodate the active day trading professional as well as the occasional longer-term trader. Choose between the advanced trading platform or MetaTrader 4 (MT4) for a desktop experience, the web trader for a browser-based trading experience, or choose the Forex.com or MT4 mobile app for trading on portable smart devices.
Whether you use web trader or the downloadable advanced trading platform, making trades is easy. (Of course, that doesn't mean making money is easy.) You can trade directly from charts by right-clicking or hit the buy and sell buttons along the top of the chart. This brings up an order window where the entry, stop loss, and profit target is set. Enable one-click trading for rapid trade execution.
Within the platforms, traders can access charts, economic calendars, news, see positions, and trade/order history, access trade signals and research reports, as well as market analysis from Forex.com analysts.
There aren't many drawbacks to the platforms. There are loads of indicator and drawing tools, and it is functional enough to make rapid-fire trades if needed.
A Forex.com account can also be integrated with NinjaTrader, a popular third-party trading platform.
The mobile app is functional, providing traders with access to all their account information. Traders can add or withdraw funds, view trade history, create watchlists, access news, and view charts from the mobile app. It is also easy to navigate and set up.
The charting feature is one of the drawbacks of the mobile app. There are a limited number of common indicators available, such as RSI, MACD, and moving averages, but drawing functions and more advanced technical tools are missing.
Full order functionality is available, including conditional orders and the ability to easily place stop losses and profit targets at the time of a trade.
U.S. clients have access to 83 forex pairs, as well as unleveraged gold and silver. Clients outside the U.S. have access to all the forex pairs, as well as CFDs on stocks, commodities, indexes. Cryptocurrency trading is available in the U.K.
Opening an account requires only 50 units of the account currency. For example, in the U.S., an account can be opened with as little as $50.
The minimum trade size on a currency is $1,000. Therefore, if opening an account with $50, at least 20:1 leverage is required to take the smallest position possible. Leverage increases risk.
Commissions and Fees
Forex.com is primarily a market-making broker. This means they do not connect client orders with the raw prices being offered in the market. Instead, Forex.com marks the price up slightly, creating a larger spread, which is how they generate revenue. The markups can be seen when comparing a standard account and a Direct Market Access (DMA) account. The DMA account offers no markup on spreads, but a commission is charged. The standard account offers no commissions, but it features larger spreads. The commission account is in the middle. It has reduced spreads (still some markup) and slightly lower commissions than the DMA account.
Forex.com lags behind international brokers in term of pricing, with many international brokers offering tighter spreads and lower commissions to traders even with small accounts.
Standard account and commission account traders may also benefit from the Active Trader Program. The program is open to anyone who opens an account with at least $25,000 or who trades $25 million in a month. The program is not open to DMA account holders, as that account already has volume-based fee reductions.
In terms of other fees, any account with less than $10,000 USD and no trading activity for more than 12 months is subject to a $15-per-month inactivity fee. Accounts over $10,000 are exempt from inactivity fees.
There are no additional fees charged by Forex.com for deposits. For withdrawals, checks and ACH payments are free. U.S. wire transfers under $10,000 incur a $25 fee, and all other wire transfers are $40. Wire transfers over $10,000 are free.
Clients have multiple ways to contact Forex.com, including online chat and live phone support, as well as extensive FAQ and tutorials on their website. Support is available from 10 a.m. ET Sunday to 5 p.m. ET Friday.
Online chat and phone support are available to both current and prospective clients. Social media support is not available, although they do have social media accounts where they post market analysis and company information.
Chat support is a chatbot. This limits the questions that can be asked and eliminates the possibility of finding answers to anything beyond the most simple questions.
For more in-depth questions, send a message via email. The message function is provided at the bottom of the Support page on Forex.com. Specific questions will be answered but expect to wait one to three business days for a response.
Phone support is the quickest way to have questions answered by a real person. There is a small menu to choose from at the start of the call. Wait times will vary based on call volume, but during a normal day you can expect to wait several minutes before being connected with a representative.
What You Need to Know
Forex.com is a good fit for the very active trader because active trading results in lower trading costs. Forex.com is also a good fit for the infrequent trader because the slightly higher fees and spreads Forex.com charges are inconsequential if only taking a few trades per month.
For traders in the middle, however, who make a few trades per day, Forex.com has slightly higher spreads and fees than many brokers outside the U.S., which could unnecessarily increase trading costs.
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