Forex is the largest market in the world by turnover, and the one most retail brokers are built around. You are always trading one currency against another - buying euros with dollars, or selling pounds for yen - so a position is a bet on the relationship between two economies rather than on a single asset going up.
It runs continuously from Sunday evening to Friday evening, which is a genuine advantage if you cannot watch a screen during your own working day, and a genuine risk if you leave positions open while you sleep.
What it costs
Almost all of the cost is in the spread and, on raw-spread accounts, a commission per lot. The brokers we rate best publish both, so you can add them together: a "zero spread" account charging $7 per lot round turn is not cheaper than a 0.6 pip spread with no commission - it is roughly the same, and worse on small trades. Positions held overnight also pay or receive a swap, which compounds quietly on anything held for weeks.
What to watch for
- Leverage is capped at 1:30 on major pairs for retail clients in the UK, EU and Australia. An offshore entity of the same brand may offer 1:500 or more - that is a different company with different protections, not a better deal.
- Advertised spreads are best-case figures on the most liquid pair in quiet conditions. What you pay around a rate decision is several times wider.
- Swap charges on a long-held position can exceed the spread you were comparing brokers on.
What separates a good broker here
- A published average spread on EUR/USD, not just a "from" figure
- Commission stated per side and per round turn, in your account currency
- Negative balance protection, in writing, for the entity you will actually be onboarded to
- Execution figures the broker is willing to put a number on
