Best Broker Reviews 2023

At FxScouts, we have an experienced review team dedicated to evaluating Forex brokers. Our team of experts meticulously examines each broker in 7 different areas, amassing an enormous amount of data in the process. With over 200 individual metrics analysed, we invest hundreds of hours annually researching and scrutinising brokers to ensure that we only recommend the best in the Forex industry.

Comparing Forex Brokers in Canada

Forex brokers accept clients from all over the world, but their trading conditions are drastically very different for Canadian residents. This is especially true for brokers who hold a CIRO license. To find the best Forex broker for Canadian residents, we need to explain these differences and how they affect Canadian traders.

Top-tier regulators, like CIRO, have an efficient legal structure and strictly enforce rules to prevent financial malpractice and protect the public against scams. The advantages of CIRO regulation include:

• Segregated trading accounts which protect client funds from broker mismanagement or default.
• Cover by the Canadian Investment Protection Fund (CIPF), whose role it is to ensure the return of client money if the Forex broker becomes insolvent.
• Effective fraud investigation processes and frequently published investment scam reports.

Transparent Trading Conditions and Costs: CIRO-regulated Forex brokers will often have lower trading costs, meaning that spreads are tight and minimum deposits are low. Trading execution should be lightning-fast and with little or no intervention. Forex brokers must also publish their spreads, execution policy, maximum leverage available, and a list of all CFDs available to Canadian traders.

Broker Education and Analysis: Brokers should offer beginner traders a coherent and well-structured trading course alongside a demo account. Brokers should supply detailed market analyses to highlight trading opportunities and provide a complete learning experience.

Broker Trading Platform: Brokers will have their own trading platform or support a third-party platform, such as MT4, MT5, or cTrader. Some brokers will do both. Most Forex traders generally have a platform preference, so brokers with multiple platforms are more likely to have the platform a trader wants to use.

Below is a list of the best Forex brokers in Canada:

Is Forex Trading Legal in Canada?

Forex trading in Canada is legal and regulated by the Canadian Investment Regulatory Organization (CIRO). CIRO requires all Forex brokers operating in the country to hold a valid license and adhere to strict standards, including:

• Timely deposits and withdrawals

• Segregation of funds

• Capital adequacy to prevent defaults

CIRO also has mechanisms in place for dispute resolution and investor compensation in case of broker defaults or fraud. These standards ensure that traders have access to a fair and transparent trading environment and are protected against fraud or unethical practices by their brokers.

CIRO is one of the world’s top regulators, and we consider brokers who have been licenced by CIRO to be trustworthy for Canadian traders. 

As well as the CIRO, other top-tier global regulators include ASIC of Australia, the FCA of the UK, and the CFTC of the USA. Whether you decide to use a broker regulated by CIRO or not, it’s important to remember that choosing a regulated broker is the best way to ensure your protection as a Forex trader.

Why is Regulation Important?

Regulation is essential for protecting your money and ensuring a fair and transparent trading experience.

When trading Forex, you want to be confident that your broker is operating legally and ethically and that your funds are being handled safely. Regulated Forex brokers must adhere to strict standards set by regulatory bodies, which include requirements for capital adequacy, segregation of client funds, and ongoing reporting and compliance. This means that your funds are protected, and your trading experience is fair.

Unregulated brokers are not forced to hold to the same standards. This can lead to a higher risk of fraud or unethical practices, which can result in financial losses for traders. Choosing a regulated Forex broker gives you peace of mind and security, knowing that your investments are protected and your trading experience is fair.

How are Forex Brokers Regulated in Canada?

In Canada, Forex brokers must be regulated by the Canadian Investment Regulatory Organization, the regulatory body for non-banking financial services in the country. 

In June 2023, CIRO became the new Canadian financial regulator, following the amalgamation of the two predecessor self-regulatory organizations (SROs), the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).  CIRO is recognized by the Canadian Securities Administrators (CSA), which encompasses regulatory bodies from all Canadian provinces. This recognition underscores CIRO’s expertise and authority in the Canadian market.

CIRO requires that only qualified persons with no criminal background can work for a  Forex broker. It ensures that brokers segregate client funds from their own operational funds in Canadian banks and requires that Forex brokers are honest about their services and products. 

CIRO-regulated brokers are also subject to strict limits on the amount of leverage they can offer. Maximum leverage available is dependent on where a currency pair sits in a tiered system of currency groups. These currency groups are set by the regulator and the pairs are generally assigned to a group based on market volatility for that pair. As volatility for individual currency pairs is always fluctuating, the minimum margin required for trading also changes frequently and the CIRO regularly updates the system with the new requirements. The ceiling on leverage for retail clients ranges between 45:1 and 50:1

Scam Brokers and Reporting Regulatory Violations

If you believe you have been scammed by your broker, the first thing to do is contact CIRO. You can contact the CIRO complaints department here, and they can advise you on the next steps to take. We also have a report a scam broker form which we use to gather information so that we get the word out. Your personal details will not be shared externally.

How to verify if a forex broker is regulated in Canada

After finding a suitable broker, it is crucial to verify their regulation. This can be done by visiting the CIRO (former IIROC) and accessing the IIROC Register using the company name, usually located at the bottom of your broker’s homepage.

Do I Need a Broker to Trade Forex?

Yes, you will need a broker to trade Forex. Connecting traders to the Forex market is an expensive and technically complex business. Most Forex brokers form a bridge between the global Forex market and Forex traders; these are called market makers. Market makers buy up large trading positions from the Forex market, which they sell to traders in smaller trade sizes.

Other brokers act as a go-between, taking orders from traders and sending them straight to the global Forex market. These are called ECN brokers or DMA brokers. Both types of Forex brokers require a lot of money to set up and need teams of highly qualified technicians to maintain their trading platforms. 

Is Forex Trading Taxable Income in Canada?

Yes, Forex trading profits are taxable in Canada. This is also true if you are trading with a Forex broker based overseas.

It is a common misperception that traders don’t need to pay income tax on profits made in offshore trading accounts. If a Canadian resident generates profit from trading in an offshore trading account while residing within the borders of Canada, the profit is regarded as normal taxable income and needs to be declared in Canadian dollars (CAD) in their tax returns. In this case, it doesn’t matter where the income originates from, but rather where the person resides while generating that income.

Canadian citizens or permanent residents should consider seeking guidance from a tax professional to determine their Canadian tax obligations. By consulting a tax professional, individuals can ensure they meet their tax requirements and optimize their financial situation.

How do I start trading Forex in Canada?

Once you have chosen a well-regulated broker that is licensed by the Canadian Investment Regulatory Organization, the following steps can be taken:

1. Take time to educate yourself about Forex trading. Without education, Forex trading is just gambling. Ensuring that you understand the various Forex trading terminology, how to manage your risk, how the financial markets work, how to use technical indicators, and how platforms work is essential.
2. Create a demo account with the broker and practice trading with virtual money until you are consistently profitable. Brokers with the best demo accounts understand that beginners should not be forced into trading real money and that experienced traders should be able to test strategies as long as they want to. The best demo accounts are not time-limited and replicate real market conditions as closely as possible.
3. Create a trading plan that outlines your entries and exits, your risk management strategy, which indicators you will use, when you will trade, your order sizes, etc. Trading plans are essential to profitable trading.
4. Next, you will open and fund a live account with the broker. Ensure that you only trade with money that you are prepared to lose.
5. Once you have funded your account, you can perform fundamental and technical analysis according to your trading plan, open a ‘buy’ or ‘sell’ position, and set your stop-losses and take-profits.

Which Forex brokers are best for beginner traders?

The best brokers for beginners are well-regulated and have no minimum deposit requirement, ensuring security and a low entry cost. Also important are low fees and responsive and knowledgeable customer support. Customer service should be available 24/5 via email, live chat, and telephone, though 24/7 is better. Last but not least, beginners should look for a broker with a high-quality education section; this should feature articles, video tutorials, frequent webinars, advanced trading strategies, and chart analysis. Forex

Which trading platforms do the best Forex brokers offer?

The best Forex brokers generally offer Metatrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. These are third-party trading platforms which you can install on your computer. They are fully customisable and have advanced charting tools, research tools, and options for automated trading or copy trading. Some brokers also have their own trading platforms, which are usually accessed via a browser or on your mobile phone. For more details on trading platforms and how they work, check out our guide on trading platforms. 

Which broker has the best mobile trading app?

It’s impossible to say which trading app is best as traders have different priorities, but AvaTrade’s trading app, AvaTradeGo, provides a smooth trading experience with a sophisticated dashboard, complete with a set of intuitive risk-management tools, clear charts, zoom for details, and many more helpful features unique to this app.

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. Forex and CFD transactions involve high risk due to the following factors: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. Regardless of how much research you have done or how confident you are in your trade, there is always a substantial risk of loss. (Learn more about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).

Our Rating & Review Methodology

Our overall Forex Rankings report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers. 

Editorial Team

 

Chris Cammack
Head of Content

Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.

 

Alison Heyerdahl
Senior Financial Writer

Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.

 

Ida Hermansen
Financial Writer

Ida joined our team as a financial writer in 2023. She has a degree in Digital Marketing and a background in content writing and SEO. In addition to her marketing and writing skills, Ida also has an interest in cryptocurrencies and blockchain networks. Her interest in crypto trading led to a wider fascination with Forex technical analysis and price movement. She continues to develop her skills and knowledge in Forex trading and keeps a close eye on which Forex brokers offer the best trading environments for new traders.