My favorite forex broker offers great support, lots of deposit and withdrawal options, is safe, regulated and most of all offers great trading conditions. This is a shameless plug for my broker, but I do believe that good products and companies should be given the recognition they deserve. So with that in mind, I wanted to share my experience with my favorite forex broker FXOpen–the best forex broker I have used to date (and I have used a lot!). Unfortunately, FXOpen is not available to US residents.
This article was originally published February, 2014 and has been updated as of January, 2016.
My Favorite Forex Broker – FXOpen
Trading conditions are of paramount importance, especially if you day trade. FXOpen offers ECN accounts which offer the tightest spreads I’ve seen. An ECN account interacts directly with market liquidity, instead of being passed through a intermediary who marks up the spread (even “no-dealing desk” brokers may mark up the spread). Instead, a small fee is charged for each transaction, which means the spread is basically zero for major pairs when centers such as London or New York are open. When these markets aren’t open, the spread is typically 0.2 to 0.4 pips on major pairs such as the EURUSD.
Figure 1 shows a plugin provided by FXOpen to it’s clients. This great plugin will be discussed in greater detail shortly. Right now though, simply note the spread….there isn’t one! The spread is zero. This is typical during the London and New York sessions, as the spread is usually 0.0 or 0.1 pips. This allows for great freedom of trading styles, and allows traders to take advantage of short-term moves. Scalpers are welcome.
Slippage can occur, but is extremely rare. It has never been an issue for me, although I do not trade for a couple minutes before or after major news releases. If you hold day trading positions through new releases….well, I wouldn’t recommend it. Your risk isn’t properly controlled as slippage is likely no matter what broker you use.
Figure 1. Level II ECN Trading with Zero Spread (during London and New York Overlap period)
Figure 2 shows that the spread remains quite tight even when London and New York are both closed.
Figure 2. Level II ECN Trading with 0.1 Spread (Nearly 3 hours after US session close)
FXOpen Level II Plugin
I personally (usually) trade off a 1-minute forex chart when day trading. This plugin allows me to set my position size, see market liquidity (this option can also be hidden as demonstrated in figure 2), set my entry price and also my stop losses and profit targets automatically.
Notice the “Pending Orders” at the bottom of the Level II plugin. Select buy or sell for which ever you want to do. Enter the price in the box with all the zeros and hit Limit or Stop to enter the order. Also, set a Stop Loss (SL) and/or Target Price (TP) in pips; these will automatically be placed when your order is filled.
In figure 1 and 2 I have a 3.5 pip stop and a 6 pip target. These types of trades just aren’t possible with a broker that charges higher spreads. Also, by having automatically placed stop losses and targets in pips, I always know exactly what my risk and reward is.
Once you are filled on your order, and your stops and targets are live, you can click and drag them wherever you please, allowing you to adjust your stop losses and targets directly from your chart.
You can also simply click the current bid or ask at the top of the Plugin to enter at the current price (market order), and your SL and TP will still be placed at the same time you get filled. This is a fantastic feature in fast moving market conditions, or when trading on a short-time frame and placing manual stop losses and targets can be tedious.
Orders can also be placed at any price, including at the current bid or offer, or inside the spread (if there is one).
If you look to the top of the plugin, you can also change how many lots you are trading. In the example I have it set to seven lots, but you can set it to anything you want, including a mini lots, which would be 0.1, or even a micro lot which is 0.01. You can then adjust your position size incrementally by micro lots to really fine-tune your position, such as taking a position of size of 0.23 or 8.92 lots. Very customizable.
I also swing trade, and this plugin allows me to quickly go through my charts and place multiple orders, with different position sizes, stop losses and targets, quickly.
Types of Accounts
With and fxopen ECN account the spread is usually 0.0 or 0.2 pips on major pairs. And there is a small commission on each trade: $2.5 per standard lot, $0.25 per mini lot, $0.025 per micro lot. If you have more than $25,000 in your account, commissions drop to $1.8 per standard lost, $0.18 per mini and $0.018 per micro lot.
Minimum account is $100 to open. Paying only $2.5 per 100K (commission is prorated to the position size) to get into a trade with a zero spread is far superior to trading even with a 1 pip spread, which is equivalent to a $10 cost on a 100K lot.
An STP account on the other hand usually has a around a 0.6 to 1.2 pip spread and there is NO commission. Minimum account opening size is $10.
Note, you should open your account with more than the minimum. See How Much Money Do I Need to Trade Forex.
Scalping is allowed on ECN and STP accounts as there is no broker intervention.
For those not trading a short time frame, go with an STP account. The slightly larger spread doesn’t matter as much when taking longer-term trades. That said, every pip does count, so paying a commission and collecting an extra pip (because of the tighter spread) is worth it. I use an ECN account for both and short and longer-term trading.
If you are a money manager or investor, FXOpen also offers aPAMM account structure. As an investor you can invest in a PAMM account and someone else manages your money, except the manager never has access to your account information. Instead, the broker simply mirrors the money manager’s trades in your account. Money managers can easily set up a PAMM account. All performance stats are tracked and made public, essentially creating a hedge fund type structure where money managers can attract investors and accept a performance fee (if profitable). All information about performance metrics is publicly available, so investors can easily see which money manager suits their personal goals and risk tolerance.
PAMM accounts can be opened with as little as USD$1000.
For a full list of the features available on each account, check out FXOpen Types of Trading Accounts and Conditions.
FXOpen Deposit and Withdrawal Options
If you make consistent income, it’s nice to have multiple ways to both deposit and withdraw money. Deposits are quick, taking less than a couple days and in many cases can be instant based on the method chosen. Withdrawals typically take 24 to 48 hours.
There are too many to list here, but the deposit and withdrawal options include wire transfers, credit cards and many online payment services such as Skrill/MoneyBookers and Neteller. See a full list here: FXOpen Deposit and Withdrawal options.
FXOpen Regulation and Customer Support
FXOpen NZ Limited is duly registered with the Financial Service Provider Registry in New Zealand (FSPR License Number: FSP192685) and is a member of the Financial Dispute Resolution Scheme as obligated by law.
FXOpen Ltd. a company registered in England and Wales under company number 07273392 and is authorised and regulated by the Financial Conduct Authority (previously, the Financial Services Authority) under FCA firm reference number 579202.
FXOpen does not provide services for United States residents.
Customer service is prompt and courteous, and there are multiple ways to contact the broker with your queries, including phone, email, online chat or via an extensive forum.
Favorite Forex Broker: Final Word
I really like this forex broker; my experience since 2012 has been great. If you are outside the US this is a forex broker to consider. The lowest spreads I have seen on ECN and STP accounts is one of my favorite features. Combine that with being regulated, great customer support and easy deposits and withdrawals. That said, I always encourage you to do your own research digging, and don’t simply take my word for it. Every person’s situation is unique and therefore make sure you are comfortable with any broker before making a deposit.
This should not be considered personal investment advice.
To learn more about how to day trade forex, including basics to get you started, strategies and a plan to get you practicing and successful, check out my Forex Strategies Guide for Day and Swing Traders 2.0 eBook.