Best Forex Brokers For Scalping
Scalping refers to a forex trading strategy in which the trader opens and then closes positions within a few minutes (or even seconds). For scalping strategies to be successful, close attention to the markets is critical, and timing is of the essence. Scalpers may stay glued to their charts all day, binge-watching the price action and waiting for the right moments to enter and exit the market.
We understand that scalping may be an intimidating subject for beginners. To demystify this sometimes confusing topic, we’ll unpack the ins and outs of scalping to present the pros and cons of this trading strategy.
This guide is designed to answer some of the burning questions you might have (What is scalping? How to choose a scalping broker and many more). We’ll also let you know which brokers are your best bet if you are looking to pursue a scalping strategy; so that you get to pick the Best Scalping Forex Brokers
History of Forex Scalping
Evolution of forex scalping: In the late 90s and early 2000s, the price differences for assets that existed across different brokers were more pronounced. To take advantage of these pricing discrepancies, traders would manually arbitrage the off-market price by simultaneously buying and selling the mismatched rates to make a profit.
This method is known as latency arbitrage, and it’s achieved by quickly opening and then liquidating positions within a small window of time (usually less than one minute).
However, arbitrage opportunities have become practically non-existent in modern times, unless you are running an automated strategy (such as an HFT-driven strategy) to capture latency arbitrage (and even that practice may be prohibited – more on that below).
Today, scalping has evolved beyond arbitrage. For example, traders may engage in a strategy called “price action trading,” in which a trade is established when prices deviate from the median (or middle) of a price range, with the expectation that it will return to a baseline. Like latency-based strategies, price action trading can take place even on time scales small enough to be measured on one-minute charts – or even with tick data (one tick = one price update).
Not permissible everywhere: Some brokers may prohibit strategies that aim to exploit tiny pricing changes, depending on the sophistication of the strategy. It also would depend on the difficulty a broker may have in managing risk – or the risk taken by other market-makers for routing your order while executing those trades.
How to choose a forex broker for scalping
If you’ve decided to pursue a scalping strategy, your first step will be to pick a forex broker. Crucially, you’ll want to select a broker that is well-regulated and highly trusted. A good forex broker will also provide a wealth of resources to aid in your scalping success – market research, forex education, and advanced analytical tools such as charts and watchlists – in addition to a comprehensive offering of tradeable products.
Our team tests dozens of the biggest names in foreign exchange, and – using a proprietary formula that takes into account a range of factors, including trust – we rank the best brokers for forex trading.
It’s important to remember that not all brokers allow scalping on their platforms (we’ll dive into this subject further down). If you are looking to begin scalping, we found the following forex brokers to be the best options:
How to get started with a scalping strategy
There are two crucial factors at play when starting out on your journey as a scalping strategist. First, you’ll have to figure out if your broker’s trading costs are low enough for the strategy to be profitable. Second, you have to determine whether your broker’s trading policy permits scalping (regardless of the execution type).
Your broker’s trading costs will depend on the execution principle applied to your trading account. For agency-execution accounts, the broker will charge a commission for entering and exiting trades (in addition to spreads), whereas accounts with market-maker execution usually just charge for the spread. We’ll explore this in more detail a bit further down.
Determining whether your broker actually permits scalping strategies is a bit more complicated.
BDSwiss is an international brokerage firm established in 2012, which fastly approached Markets and became one of the largest trading groups. The current client base of BDSwiss counts more than 1.5 million registered clients from over 186 countries, as well as serving an exclusive Member club that has more than 1.5 million traders.
Since the approach of the company establishment comes from Switzerland, its strong basis is confirmed by the great environment company built. And ever since providing online trading services as a worldwide operating group with established offices in Kuala Lumpur – Malaysia, Tirana – Albania, Pristina – Kosovo.
- Leverage: 1:500
- Regulation: FSC, FSA
- Min. Deposit: 100 US$
- Platforms: MT4, MT5, BDSwiss Webtrader and Mobile App
- Found in: 2012
- BDS Markets -authorized by the FSC (Mauritius) registration no. C116016172
- BDS Ltd – authorized by FSA (Seychelles) registration no. SD047
BDSwiss has a good reputation and user-friendly trading conditions, there is a good choice between trading platforms, the account opening is fast and customer service is great quality with education and research tools.
On the other hand, BDSwiss trading proposal depends on the entity and instruments are limited to Forex and CFDs.
BlackBull Markets began its operation back in 2014 through Auckland New Zealand and combines years of Institutional Forex experience with the focus on resource offering to retail traders. Ever since the broker enables multiple trading solutions as a financial services provider with proprietary software to aggregate powerful trading performance along with competitive pricing.
Also, BlackBull Markets was founded as a prime broker also offering retail trading solutions and maintaining its traducing facilities within world trading centres including London, the UK, and Malaysia in reverse bringing global exposure. Numerous possibilities include diverse conditions, and assets to trade, supported by the learning materials and programs for active traders.
Apart from the various solutions for retail traders, there are also professional services for institutional accounts and money managers with MAM and PAMM accounts.
- Leverage: 1:500
- Regulation: FMA, FSA
- Min. Deposit: $0
- HQ: New Zealand
- Platforms: MT4, MT5
- Found in: 2014
BlackBull Markets Licenses
BlackBull Markets provides quality trading conditions and is a fully regulated broker. It is one of the few brokers with high leverage, a good trading environment, lowest spreads based on our research and professional trading overall, plus education and research.
FP Markets Review
The FP Markets operating professional trading experience for a quite long time since the broker was established in 2005 and ever since serves over 12,000 clients worldwide. One of the main strengths is that FP Markets uses true ECN electronic bridges and enhances its proposal with powerful trading technology, also investing in its innovation.
First of all, a good broker is a safe broker. The proof of its safe trading environment is also confirmed by necessary legislation obligation and sharp obligation, while FP Markets is an Australian brokerage company headquarters in Sydney, Australia while ASIC regulation ensures trustable cooperation as well as full compliance with guidelines. Moreover, quite recently FP Markets enlarged its proposal and opened the European Cyprus entity thus eligible for trading proposals within the EEA zone.
Another strong point of FP markets proposal is their developed ECN technology that provides direct access to the liquidity providers without dealer intervention through Equinix NY4 Data Centers and executes orders through the best possible price within offering for the particular asset.
This technology currently is the leading solution that provides extremely fast execution speeds and the most favourable quotes with spreads from 0.0 pips allowing you to benefit from it.
- Leverage: 1:30
- Regulation: ASIC, CySEC
- Min. Deposit: 100 US$
- HQ: Australia
- Platforms: IRESS, MT4, MT5
- Found in: 2005
FP Markets Licenses
FP Markets is a well-regulated broker with a good trading environment suitable for beginners, low pricing, a good trading proposal with selection of platforms with an ECN trading environment and excellent trading education.
On the flip side Spreads for Stocks are higher, also some withdrawals add on commission.
Pepperstone is a wholly-owned subsidiary of Pepperstone Group Limited, an Australian-based company established in 2010, which has quickly grown into one of the large forex and CFD worldwide providers.
Pepperstone Limited was launched in the UK in 2015 while expanding its services to cover the needs of UK and European clients through local access. Overall, the group serves offices in major financial destinations Melbourne, Dubai, Limassol, Nassau, Nairobi, Dusseldorf and London.
- Leverage: 1:30 to 1:400
- Regulation: ASIC, FCA, DFSA, SCB, CMA, CySEC, BaFin
- Min. Deposit: 200 US$
- HQ: Australia
- Platforms: MT4, MT5, cTrader, TradingView
- Found in: 2010
- Pepperstone Limited – authorized by FCA (UK) registration no. 684312
- Pepperstone Group Limited – authorized by ASIC (Australia) registration no. ACN 147 055 703, AFSL 414530
- Pepperstone Markets Limited – authorized by SCB (Bahamas) License number SIA-F217
- Pepperstone Markets Kenya Limited – authorized by CMA Licence No.128
- Pepperstone EU Limited – authorized by CySEC (Cyprus) registration no. 388/20
- Pepperstone GmbH – authorized by BaFin (Germany) registration number 151148
- Pepperstone Financial Services (DIFC) Limited – authorized by DFSA (Dubai) license number F004356
Pepperstone is a reliable broker with top-tier licensed FCA and ASIC, the account opening is fully digital and the trading environment is one of the best Australian offerings with NDD accounts, powerful research and trading tools. The education section is of great quality and the support is excellent.
For the Cons there is no 24/7 support and demo account available for 30 days only, also instruments are limited to Forex and CFDs.
FBS was founded as an international broker that serves clients from over 150 countries since 2009 showing its excellence with numerous prestigious awards and cutting-edge technologies on the Forex Market. While at the very beginning the broker was established in Belize only, lately, FBS became also a Cyprus Broker. That definitely helps and supported expanding of its service to a European population for both newbie and professional traders
Regulated, set by the European legislation environment brought greater capabilities to a broker with useful tools and fully authorized trading service, which push FBS development even better. Further in our FBS review we will cover its trading proposal conditions and see whether they are competitive.
- Leverage: 1:30
- Regulation: CySEC, FSC, FSCA, ASIC
- Min. Deposit: 1 USD
- HQ: Belize and Cyprus
- Platforms: MT4, MT5, FBS trader, CopyTrade
- Found in: 2009
FBS Broker Licenses
- Tradestone Limited -authorized by CySEC (Cyprus) registration no. 353534
- Intelligent Financial Markets Pty Ltd – regulated by the ASIC (Australia) licence number 426359.
- FBS Markets Inc. – authorised by FSC (Belize) registration no. 119717
- TRADE STONE SA (PTY) LTD – authorised by FSCA (South Africa) license no. 0885
FBS operates for many years and provides a stable trading environment, there are good trading conditions including copy trading on MetaTrader4 and 5, and spreads are considered low based on our research also the education section is wide.
On the negative side, trading instruments are limited to Forex and CFDs and trading conditions vary in each entity, we recommend signing with a European entity for better transparency.
When analyzing financial markets on smaller time scales such as those represented on one-minute candlestick charts or tick charts – they can seem full of noise and seemingly random price action.
It can be difficult to draw actionable meaning from such granular data. Usually, traders only identify useful trends after combining that granular data with analysis of larger time scales (such as hourly or daily charts).
To be successful at identifying the fleeting trading opportunities afforded by scalping strategies, timing is crucial. And for those traders who have put in the work and done the research necessary for developing a forex trading strategy for scalping, the next step will be determining whether the strategy is scalable or sustainable.