Best 5 Scalping Forex Brokers for Trading.
Scalping is a trading style in which the trader opens and closes positions within minutes or seconds of each other. Scalping can be done manually by retail traders, and is also used by high frequency traders who use algorithms to achieve the entries and exits that are desired.
Scalpers have special needs in the market, and these must be met by the brokers so their scalping clients can perform their trades as required. These needs are defined below.
- A) Scalpers are only trying to make gains from small differences in price. Therefore, speed of entries and exits is crucial to the success of scalp trades. Scalpers will therefore need brokers and platforms that can guarantee such speedy executions.
- B) Platforms with high trade latency will erode a scalper’s gains very quickly. Therefore, brokers with servers that can guarantee ultra-low latency in trades are a basic requirement. In the same vein, such brokerages should be able to support the use of automated trading software on virtual private servers (VPS) to guarantee round the clock trading.
- C) Scalpers will usually trade a lot of positions in a 24-hour cycle. Some scalpers have been known to open more than 300 positions in a day. Such high trade frequency can quickly rack up spread and commission costs. If a scalper is targeting 10 pips in a trade and the spread on such a trade is 4pips on one broker and 1.8 on another, obviously the broker that offers the lower spreads will be more desirable to trade with. A difference of 2.2 pips may not seem like much, but if the scalper is using position sizes that are valued at $10 per point (i.e. Standard Lot) and takes up to 100 trades a day, then this difference of $2,200 in a day suddenly becomes quite substantial. Therefore, scalpers will need to trade with brokers that can guarantee the lowest spreads in the market so as to save on trade costs, thus making the scalping venture more profitable.
- D) Market maker platforms typically do not promote scalping because this business model constitutes a counterparty risk to this category of brokers. In contrast, brokers that offer ECN-style trade conditions love scalpers as the spreads and commissions they generate constitute a major chunk of the ECN brokerage’s income. Therefore, the scalper will benefit from working with an ECN account.
Now that the needs of scalpers have been identified, the next step is to discuss forex brokers that have provided trading conditions that match the needs identified above. Here are the best 5 scalping forex brokers.
See more: the best forex brokers
1. CIRCLE MARKETS
Circle Markets is a forex brokerage that satisfies many conditions required for scalping activity. Spreads are very low; the EUR/USD attracts a spread of 0.7 pips on a Standard account and 0.0 – 0.3 pips on an ECN account, making this one of the trade venues with the lowest spreads you can find anywhere in the world. Commissions are also fair, coming in at $3.50 on each side of a Standard Lot per trade. Trade executions are very fast and many users have testified to this. The same spreads are also obtainable on the Raw ECN and FIX API Pro account types, with commissions at $2.50 on each side of a $100,000 trade. Located in New Zealand and Vanuatu, Circle Markets is a scalper’s paradise.
Coinexx offers forex and crypto assets for trading. Coinexx commenced operations in 2017 and offers its clients very low spreads and access to deep liquidity with very fast executions. These are the basic ingredients needed to setup a scalping trade operation. By aggregating prices from Tier-1 liquidity providers and prime brokers, scalpers have a good choice of bid-ask prices to work with.
Coinexx operates a mixed fiat – crypto deposit and withdrawal system, which mimics the payment systems run by many crypto exchanges. All trading is done via a Pro ECN account, which gives spreads that are sometimes as low as 0.0 pips. Commissions are even lower than what is obtainable in Circle Markets: as low as $2 per side of each Standard Lot traded is the standard commission fee. The only snag is the unregulated nature of this platform.
Tradeview offers ECN trade conditions via the cTrader and Currenex platforms. Tradeview also features its proprietary price aggregator software known as Innovative Liquidity Connector. What this software does is that it harnesses bid-ask prices from the various banks that Tradeview gets its liquidity from. This allows the scalper to choose the best bid prices to sell at, or the best ask prices to buy at. The lowest spread is seen on the EUR/USD which is 0.8 pips. The featured cTrader and Currenex platforms are great for retail and professional scalpers. If you also manage accounts, Tradeview offers Multi Account Management (MAM) software for free. Add these features to the sound regulation from the Cayman Islands Monetary Authority (CIMA) and account segregation, and you have a perfect setup for a scalper to trade and make some profits from.
4. RAKUTEN SECURITIES
Rakuten Securities operates in Japan, Australia, Malaysia and Hong Kong. The first thing that hits you when you visit the website of Rakuten Securities is the announcement of the reduction of gold spreads by 50%. What an appetizer for an intending scalper looking to add gold to the mix of FX assets to scalp on this broker’s platform. This broker prides itself in the “game-changing spreads” it offers traders. Spreads on the EUR/USD and the AUD/USD are as low as 0.5 pips on a standard account. The broker is regulated in all four jurisdictions where it operates. Maintenance of clients’ funds in segregated accounts with triple-A rated banks ensures safety of the scalper’s funds. Trading on Rakuten Securities is commission-free. Several add-ons such as the Autochartist tool and this broker also offers a desktop version for Mac users and mobile apps for Android and iOS-backed devices.
5. RENESOURCE CAPITAL
Renesource Capital is based in Riga, capital city of Latvia. The broker offers scalpers the opportunity to trade in FX & CFD markets with very low spreads and fast executions. However, Renesource Capital falls under the market supervision of the European Securities and Markets Authority (ESMA). This means that scalpers cannot get generous leverage provisions as is the case with the other 4 brokers reviewed above. Leverage is capped at 1:30 for FX majors.
That notwithstanding, Renesource Capital has great features which are perfect for scalping. These include:
- Aggregation of pricing from several liquidity providers, which gives scalpers the power to select the best bid-ask prices for their trades.
- Pretty tight spreads
- Customization of liquidity pools
- Complete trading anonymity and neutrality. There is no “last-look” execution, and this is done by the use of an Agency execution model.
- Ultra-low latency due to collocation of servers and execution infrastructure.
- Clients of Renesource Capital can be sure of trading in a regulated environment, which features account segregation.
Now that the needs of scalpers in the forex market have been identified and the brokers that can match these needs have also been listed, you can go and open an account with one of them and start scalping today. Many of them now offer lower minimum deposit requirements than was the case a decade ago.