What you need to know • Benzinga
Those interested in TD Ameritrade’s forex-related offerings will not be disappointed. One of the main appeals of trading Forex through TD Ameritrade is that the online broker allows you to use the broker’s excellent thinkorswim® trading platform, which is available in desktop, web and mobile versions.
If you’ve ever considered expanding your trading horizons by adding forex trading, TD Ameritrade is a reputable broker with a great platform that includes options. The broker also offers often overlooked traders based in the United States and Canada a great opportunity to operate in the huge forex market.
In this article, Benzinga evaluates TD Ameritrade’s forex services so you can determine if the broker is right for your forex trading needs.
Can I trade Forex with TD Ameritrade?
Yes, TD Ameritrade now allows you to access forex trading through Charles Schwab Futures and Forex LLC. The forex trading entity recently changed its name from TD Ameritrade Futures & Forex LLC in September 2021 after Charles Schwab completed his purchase of TD Ameritrade in October 2020.
You can trade currencies around the clock during the six-day forex trading week via Charles Schwab Futures and Forex in no less than 70 different currency pairs and in standard lot increments of 10,000 base currency units.
Additionally, you can trade currency futures and options on certain currency pairs through Charles Schwab Futures and Forex. This access also includes the ability to trade micro futures which are only one-tenth the size of a regular currency futures contract.
Does TD Ameritrade charge fees for Forex?
TD Ameritrade does not charge hidden fees or have a complicated pricing structure. At TD Ameritrade, exchange fees or trading commissions are not charged the same way a stockbroker charges a commission on stock trades, for example.
Instead, you will pay a trade spread to complete a forex trade, as is common practice with online forex brokers. This means that you will pay the supply side to buy a currency pair and sell the pair on the supply side when you trade in the forex market.
Charles Schwab Futures and Forex uses an Electronic Communication Network (ECN) model. This means that the broker gives you a competitive bid/offer based on currency pair quotes obtained from four major forex market makers.
Can I use MT4 with TD Ameritrade?
No, TD Ameritrade does not support the popular MetaTrader4 (MT4) or MetaTrader5 (MT5) trading platforms, which can present a substantial problem for those looking to use their MT4 or MT5 Expert Advisors with the broker.
Luckily for other traders, however, the broker’s excellent thinkorswim trading platform has many of the same sophisticated technical analysis features found on MetaTrader trading platforms.
The thinkorswim trading platform was developed by traders for traders. It offers state-of-the-art desktop, web, and mobile apps. The platform is fully customizable and is continuously improved based on feedback from the TD Ameritrade trading community.
What leverage does TD Ameritrade give for Forex?
One of the biggest advantages of forex trading is the high leverage you can apply to your trading, although using leverage can magnify your losses as well as your gains. Leverage in trading is therefore a double-edged sword that should be used with caution.
Due to National Futures Association (NFA) rules followed by TD Ameritrade, TD Ameritrade forex leverage for major currency pairs is 50:1, while the maximum leverage ratio for pairs of minor and exotic currencies is only 20:1. This means that the margin requirements for major and minor currency pairs are 2% and 5% respectively.
Keep in mind that if your positions go against you and you cannot meet the margin requirements of your open positions, a broker may liquidate those positions until your account returns to an adequate capital position.
TD Ameritrade’s liquidation policy for FX trading is once a day for any account with a risk level below 100% when observed at 4:00 a.m. EST and intraday if the account falls to 25% or less, whichever comes first.
Does TD Ameritrade have international operations?
If you are domiciled in Canada, TD Ameritrade accepts Canadian forex trading clients through its subsidiary TD Direct. TD Ameritrade may not be available to those based elsewhere in the world, so to find out if you are eligible to open an account, visit the broker’s account opening page. When you reach the country field, you will be informed by the website whether or not you can open an account with the broker.
Other Best Options For Forex Brokers
If you live outside of the United States or Canada, you may not be eligible to open an account with TD Ameritrade. Benzinga has compiled several of the best forex brokers other than TD Ameritrade that may be available in your jurisdiction.
CedarFX is not regulated by any major financial agency. The brokerage is owned by Cedar LLC and is based in St. Vincent and the Grenadines.
AUD$200 or equivalent
US$100 (or equivalent)
eToro USA LLC; Investments are subject to market risk, including possible loss of principal.
Frequently Asked Questions
questions and answers
Which forex broker is the best?
Any forex broker worth its salt should have a good reputation and be duly regulated by a major regulator. The best broker for you would be the one that will accept clients in your area and can best help you implement your forex trading strategy.
Who is the biggest forex broker in the world?
Although the broker deserving this title may vary depending on the parameter you use to determine its size, based in Australia IC Markets is one of the largest retail forex brokers in the world by trading volume. The broker recorded a monthly trading volume of over $1 trillion in November 2021.
Can I trade forex without a broker?
High net worth individuals can use lines of credit from financial institutions to trade forex without a broker. You can also trade currency futures without a broker if you hold a seat on the CME exchange. As a small trader, you can assume foreign exchange risk by buying foreign assets, using an online payment service to obtain foreign currency, or exchanging domestic money for foreign currency at an exchange kiosk or at your local bank. However, by far the easiest way to trade forex is to go through an online forex broker.