In the world of forex trading, timing is everything, particularly for scalpers who aim to execute rapid trades and seize minor price fluctuations. Scalping can yield significant profits, but it demands a lot from the trader and the broker.
To excel in this strategy, you require a broker that offers swift execution, tight spreads, no re-quotes, and a reliable trading platform. With many brokers available, identifying the most suitable ones for scalping can be challenging.
Fear not; we will guide you through the best scalping forex brokers, highlighting the features that make them ideal for high-speed trading.
This guide will outline what to consider when searching for a broker that can support your scalping success. Additionally, we will discuss key factors for achieving success, relevant scalping regulations, and present our recommendations for the best forex brokers tailored for scalpers.
How to Choose a Forex Broker for Scalping?
- Executing Speed: In trading, especially when scalping, speed is critical. You need to ask your broker about how fast they can execute trades, as quick execution is vital for successful scalping.
- Spreads and Commissions: It’s important to look at the spreads and commissions, which must be low for scalping to be worthwhile. If you’re targeting a five-pip profit, a two-pip spread is significantly worse than a one-pip spread.
- Leverage Regulations: Forex brokers offering high leverage in scalping, make sure your broker is authorized to provide it. Regulations in Europe and the USA limit the amount of leverage brokers can offer, so check that your scalping forex broker complies with these rules.
- Trading Platform: You must be comfortable with your trading platform since scalping requires quick action. The platform should allow you to make fast and easy trades. Although no platform offers a distinct advantage, you must find it user-friendly and efficient.
- Liquidity Providers: Your broker should have ample access to liquidity, meaning there should be a reliable supply of the assets you trade. This access helps to minimize the risk of wide spreads and slippage. If your broker doesn’t openly share information about their liquidity providers, it’s important to inquire directly.
Best Forex Broker for Scalping
1. FXTM
FXTM stands out as the best forex broker for those interested in scalping, thanks to its high leverage options of up to 1:2000. This flexibility allows traders to employ various strategies without any limitations. With over 2 million active users, FXTM is a leader in emerging markets and is increasingly popular in developing regions.
New traders who are not in the EU can take advantage of a 30% bonus on their initial deposit. FXTM is recognized for its transparency and reliability in the online trading world and is also one of the top scalping forex brokers on our list.
Key benefits of using FXTM include:
- Competitive and transparent pricing for Forex trades.
- Enhanced MT4 and MT5 trading platform, along with a specialized mobile trading app.
- Comprehensive market research and educational materials, particularly beneficial for beginners.
- Strong regulatory oversight with a top-tier license, providing a sense of security and trust.
Limitation:
- Restricted variety of commodities available for trading.
2. AvaTrade
AvaTrade, an Irish company, offers trading options for those who like to trade quickly, known as scalpers, with both fixed and floating spreads. Moreover, trusted forex brokers for scalping don’t charge commission fees. Although it may not be the first choice for Forex scalpers, it remains a viable option because of its significant liquidity, meaning there’s ample money available for trading.
Their minimum price increase is 0.9 pips, which is higher than what many successful scalpers prefer and less competitive compared to other well-known brokers. AvaTrade doesn’t restrict trading strategies and is equipped with technology to handle high-volume, fast-paced trading.
Even though their cost structure might make scalping less attractive, some traders can benefit from using fixed spreads during major market events to avoid sudden price changes, also known as slippage.
You can also have a look at AvaTrade Comprehensive Broker Review.
Advantages
- AvaAcademy provides a high-calibre educational experience.
- A diverse range of trading platforms is available to meet different trading requirements.
- There is a wide selection of assets, allowing for opportunities for cross-asset diversification.
- The broker is well-regulated and enjoys the trust of a central banking authority.
Disadvantages
- While trading costs are competitive, they do not stand out as exceptional.
3. Pepperstone
Pepperstone offers VPS hosting for low-latency Forex trading available 24 hours a day, five days a week, and boasts extensive liquidity pools that maintain narrow spreads. The commission-based trading structure includes raw spreads starting at 0.0 pips, with a commission fee of $7.00 per 1.0 standard round lot. Scalpers can utilize MT4, MT5, and cTrader platforms, all of which support algorithmic trading.
This capability positions Pepperstone prominently on our list of best forex brokers for scalping. Additionally, APIs enable scalpers to integrate sophisticated algorithmic trading solutions with the Pepperstone infrastructure.
Advantages
- Many trading platforms are available, including MT4/MT5, cTrader, TradingView, and the Pepperstone Platform.
- The MT4/MT5 upgrade package is industry-leading, featuring Autochartist and API trading capabilities.
- Support for social trading is provided through Signal Start, MetaTrader Signals, Copy Trading by Pepperstone, and DupliTrade.
- Leverage can reach up to 1:400, depending on the jurisdiction, along with exceptional trade execution.
Disadvantages
- Demo accounts are limited to a duration of 60 days.
4. FP Markets
FP Markets has been a prominent Australian broker since 2005, offering a range of trading options. It is regulated by two major bodies: the Australian Securities and Investments Commission (ASIC) and the Cyprus Securities and Exchange Commission (CySEC).
This forex broker for scalping supports all Forex scalping strategies without any restrictions. It employs a no-dealing desk (NDD) execution model, which allows trades to be completed very quickly, often in less than 40 milliseconds. This rapid speed is essential for scalpers to achieve success in their trades. FP Markets’ quality and performance are highlighted by the 36 industry awards it has received.
Pros
- A variety of trading platforms and supplementary trading tools are available.
- The cost structure is highly competitive, accompanied by an excellent selection of assets.
- There is a low minimum deposit requirement, with leverage options reaching up to 1:500.
- The firm is well-regulated and reliable.
Cons
- The availability of Iress is limited by geographical restrictions.
5. Eightcap
Eightcap is recognized as one of the best scalping Forex brokers on our list. It offers a unique advantage for scalpers who utilize algorithmic trading solutions, making it more accessible for beginners or those with limited technical expertise. Additionally, Eightcap provides a variety of payment options, including cryptocurrency deposits starting at $1 and withdrawals beginning at $10.
Traders can take advantage of the competitive commission-based trading fees associated with the Eightcap Raw account, which features raw spreads as low as 0.0 pips, accompanied by a commission of $7.00 per 1.0 standard round lot.
Advantages
- Low minimum deposit requirement and high leverage of up to 1:500.
- Competitive fee structure.
- Robust technological infrastructure and experienced management team.
- Daily research and high-quality educational resources.
Disadvantages
- Limited leverage in certain areas.
6. BlackBull Markets
BlackBull Markets ranks among the top Forex brokers for scalping due to its advanced ECN trading environment tailored for scalpers. The platform offers data feeds from over 66 third-party providers, ensuring optimal pricing that is particularly advantageous for scalping strategies.
Additionally, VPS hosting facilitates low-latency algorithmic Forex scalping available 24/5, while API trading enables scalpers to integrate their custom trading solutions seamlessly with the exceptional infrastructure provided by BlackBull Markets.
Furthermore, BlackBull Markets imposes no minimum deposit requirement and accommodates cryptocurrency transactions. Scalpers can take advantage of competitively priced, commission-based ECN accounts, with fees starting as low as $4.00 per lot, thereby establishing a significant cost benefit at BlackBull Markets.
Advantages
- ECN/NDD execution model providing access to deep liquidity.
- Institutional-level pricing is available to retail traders through proprietary price aggregation.
- Integration with ZuluTrade and Myfxbook for social trading opportunities.
- Leverage available up to 1:500.
Disadvantages
- Limited options for deposit methods.
Broker Policy towards Scalping
Brokers set rules about scalping, and due to the popularity of Forex scalping, many discuss it in their FAQ sections. It’s an important part of choosing a broker that allows a scalping strategy. While lots of brokers don’t impose restrictions to attract traders, they often have fees that make scalping less appealing.
Some brokers might limit the number of trades you can make in a day, the number of positions you can have open, or the total size of your trades, which can be a drawback for scalpers.
Scalping Regulations
Across the globe, financial regulators often allow brokers to set their own trading rules. However, the US Securities and Exchange Commission (SEC) enforces a specific rule for traders. This rule states that traders need at least $25,000 in their accounts to use a method called “scalping,” which is part of what’s known as pattern day trading.
If traders don’t meet this requirement, their accounts will be suspended until they gather enough funds to reach the $25,000 minimum. This rule is only relevant to US stock markets. Traders in futures and Forex markets aren’t subject to it, as their trading guidelines are determined by individual brokers.
Scalping with Tight Spreads
Tight spreads are essential for successful Forex scalping. A reduced markup leads to increased profitability, as it necessitates smaller price movements to achieve gains. Given that trading costs represent the main expense for scalpers, a well-thought-out approach significantly enhances the effectiveness of a Forex scalping strategy.
The preferred arrangement typically involves competitive commissions paired with raw spreads, a combination that many brokers offer alongside a volume-based rebate program, creating an optimal environment for scalpers to excel.
Scalping Execution
It’s important to understand that not all Forex brokers permit scalping. If you’re interested in scalping, you need to choose a broker that allows this strategy.
For scalping to work well, you need fast trade execution and tight spreads. It’s essential to use a broker that provides ECN, STP, or DMA execution, as these brokers generally offer quick execution and tight spreads, especially during times of high market liquidity. This is when scalping is most effective.
ECN brokers usually support Forex scalping because they don’t act as the counterparty to your trades. Instead, they earn a commission on each transaction. Their superior technology ensures that you get competitive trade execution and improved pricing.
Funding & Withdrawal Methods of Scalping Brokers
Scalpers frequently experience daily fluctuations in profits and losses, prompting them to engage in numerous financial transactions to safeguard their capital. This practice can lead to increased costs, ultimately diminishing overall profitability.
While most brokers do not impose fees for deposits, withdrawal fees may be applicable based on the chosen payment processor. Additionally, there may be external costs associated with these processors. Consequently, scalpers need to evaluate the funding and withdrawal options offered by scalping brokers to ensure a cost-effective framework is in place.
Online payment processors often present significant advantages, and certain brokers offer low-cost debit cards as an alternative, though availability may be limited by geographic location.
Scalping Brokers’ Customer Support
Generally, traders don’t often need customer support, but scalpers, due to their frequent trading activities, might require more assistance. It’s beneficial to choose a broker that provides fast access to customer service through live chat or phone, ensuring quick responses. Since scalpers usually wrap up all their trades by the end of the trading day, having support available 24 hours a day, five days a week, or even around the clock, isn’t necessary for them.
Conclusion
Finding the best scalping forex broker hinges on striking the right balance between low fees, quick execution, and dependable support. Brokers that offer tight spreads and minimal commissions, along with reduced slippage and sophisticated trading platforms, provide scalpers with essential tools for thriving in a dynamic trading landscape.
It’s also vital to assess the broker’s regulatory compliance and security protocols to ensure your funds are protected and that the broker adheres to stringent standards.
Moreover, having access to prompt customer service can significantly impact your trading experience when challenges arise. By prioritizing these elements—such as spreads, execution speed, platform capabilities, security, and customer support—you’ll be well-prepared to select the best broker for your scalping approach, enhancing your prospects for sustained success.