U.S. forex traders can turn to FOREX.com as the best hedging forex broker.
If you’re trading forex, you understand the need to manage risk. Hedging in forex trading is a risk management strategy that traders use to counterbalance market exposure. If you’re looking for a hedging forex broker that meets your trading needs, take a look at these hedging brokers.
Quick Look: Best Hedging Forex Brokers
- Best for Traders in Canada: IFC Markets
- Best for High Volume Forex Trading: FOREX.com
- Best for Fast Execution: IG
- Best for Professional Traders: Interactive Brokers
Best Hedging Forex Brokers
The best hedging forex brokers offer you a choice of financial instruments along with research and analysis tools.
1. Best for Traders in Canada: IFC Markets
- Best For:Best for Leverage Trading from CanadaVIEW PROS & CONS:securely through IFC Markets's website
Present in more than 80 countries, IFC Markets has brokered forex and contract for difference (CFD) contracts since 2006. IFC traders can access a broad range of CFDs and forex choices. The company requires a minimum $1 deposit and pays interest on account reserves.
Users can access MetaTrader (MT4) and MT5 platforms and NetTradeX. IFC Markets also has an easy-to-use website and reasonable spreads. Registered only in Cyprus and the British Virgin Islands, the only downside to IFC Markets is that it isn’t licensed with a major regulator.
2. Best for High Volume Forex Traders: FOREX.com
- Best For:Earning Cashback on TradesVIEW PROS & CONS:securely through Forex.com's website
With more than 80 currency pairs on offer, FOREX.com is one of the most inclusive forex brokers available. FOREX.com limits trading options to forex, spot gold and silver, options and futures.
The platform also provides all the information you need to make informed decisions with a range of more than 90 indicators. Users also have access to comprehensive educational facilities and research tools.
FOREX.com is licensed with four tier-1 jurisdictions. Users can trade on MT4 and the user-friendly, proprietary FOREX.com app and desktop platform. High-volume forex traders have access to tiered commission and market visibility through the DMA account.
3. Best for Fast Execution: tastyfx
- Best For:$10,000 Funding BonusVIEW PROS & CONS:securely through tastyfx's website
The forex hedging broker tastyfx offers U.S. forex traders the option of trading in more than 80 currency pairs. Users can access the tastyfx mobile app, which mirrors the desktop platform functionalities. The app is easy to navigate and allows for personalization and real-time alerts.
tastyfx offers training by way of an online course, live webinars and a live news feed. Compared to competitor educational offerings, tastyfx training resources fall short.
4. Best for Professional Traders: Interactive Brokers
- Best For:Active and Global TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
The award-winning Interactive Brokers offers traders a wide range of assets from 135 global markets. With two accounts on offer, traders can use IBKR Lite for low-cost asset trades and free stock trading. IBKR Pro offers high-level research and analysis tools at low commissions to suit professional traders.
IBKR has a comprehensive trading platform that may prove a little daunting for novice traders, though the newly introduced IBKR Lite aims to service more retail customers.
How to Choose a Forex Broker for Hedging
If you plan on hedging your forex trades, you need to find a reputable forex broker that doesn’t limit forex hedging.
Hedging Styles Allowed
Brokers shouldn’t place restrictions on traders’ hedging styles. They should offer tools that enable diversification and smoothing downdraws, so find unrestricted hedging brokers.
Regulation
In the U.S., the National Futures Association (NFA) restricts hedge trading, preventing long and short positions in an account. These regulations apply to all forex traders under U.S. regulation.
If you plan to use hedging strategies, avoid trading with U.S. brokers that don’t trade abroad.
Size of Capital Available
Forex brokers must support and leverage ongoing market trades. To do this, they need on-hand capital. You shouldn’t have to worry about your broker’s ability to support your trading aspirations, so find a well-established broker with plenty of available capital.
Find a Hedging Forex Broker to Suit Your Trading Needs
Forex trading is considered high risk. Still, armed with an effective hedging broker platform with excellent research and analysis tools, you have a good chance of making positive returns. As a risk mitigation tool, forex hedging helps reduce losses, but it also reduces potential profits. Your hedging forex brokers can help you to make the best investment decisions.
Frequently Asked Questions
Which broker is best for hedging?
It is impossible to select the single best broker for hedging. If you plan to hedge your trades, make sure that you choose a reputable broker that doesn’t restrict hedging.
Is hedging good for forex trading?
Hedging is good for forex trading in that it reduces risk. However, it can also reduce profits.
What are the 3 common hedging strategies?
Long/short, options and futures hedging are three common hedging strategies.
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
- Powerful, purpose-built currency trading platforms
- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.
About Anna Yen
Anna Yen, CFA is an investment writer with over two decades of professional finance and writing experience in roles within JPMorgan and UBS derivatives, asset management, crypto, and Family Money Map. She specializes in writing about investment topics ranging from traditional asset classes and derivatives to alternatives like cryptocurrency and real estate. Her work has been published on sites like Quicken and the crypto exchange Bybit.