Forex is by far one of the most popular financial assets for retail and institutional traders alike, and for traders looking for the ability to leverage and short forex pairs the question of the best platforms to margin trade forex in 2020 may arise.
While there are many trading platforms available online where margin trading forex is possible, we’ve found some of the best platforms that provides traders with the best tools, fees and trading options than the competition.
What is Forex Margin Trading?
Forex margin trading is the practice of trading “on margin” while investing into Forex pairs.
Forex is short for “foreign exchange”, and represents the global trade for different national currencies. Forex trading takes place predominantly on forex trading platforms, and traders may use a wide range of investment strategies when buying and selling different currencies.
On such strategy is using margin trading to increase profitability.
Margin trading is the process of making trades using funds that have been borrowed from a third party, typically a broker.
The main two types of margin trading are “shorting” and “leveraging”.
Shorting is the process of creating trades that generate profit when the price of an asset goes down, instead of up.
A trader will borrow some of the asset and sell it at a price. Once the price has gone down they will buy back the amount of asset that is needed to make the repayment and keep the profit.
Leveraging is the process of borrowing funds in order to create trades much larger than what would normally have been possible. A leveraged trade requires an amount of an asset called a “margin” to be provided to the broker in case the price action goes against the trader’s position.
Best Forex Margin Trading Platforms in 2020
PrimeXBT
PrimeXBT is the world’s leading multi-asset margin trading platform, listing a wide range of assets including the top cryptocurrencies, commodities, stock indices, and of course, forex pairs.
PrimeXBT offers leveraging on forex of up to 500x, as it does with all other traditional assets, and leveraging of up to 100x on cryptocurrencies.
The platform provides the lowest trading fee schedule, with a flat rate of just 0.05% across all assets.
As well as this, traders can engage in “coinvesting” on PrimeXBT, which is a process where successful traders can create bespoke funds which other traders can invest into.
eToro
eToro is a US-based social trading platform that allows users to copy each other’s trades for profit.
The platform also provides tips and a wide range of assets and instruments to invest into, and this has earnt eToro a positive reputation in general.
Traders can trade “contracts for difference”, or CFDs, on the platform, where margin trading can be applied and leveraging and shorting can be applied to all asset classes.
In Conclusion
Forex margin trading can be highly profitable, especially because of the use of leveraging and the typically high liquidity of forex pairs.
PrimeXBT and eToro are both excellent options for retails traders, based upon their reputation, the advanced features provided and the wide range of assets available to be traded.