Scalping Forex Brokers

Forex Brokers that Allow Scalping

Scalping refers to a style of forex trading in which traders open and close trade positions within a space of a few seconds or minutes. While many traders would like to adopt this strategy so that their little drops of water can be combined over time to make a mighty ocean, many brokers frown at this practice. Many people would wonder why. It has to do with the manner in which certain forex brokers operate in the market.

 

List of Forex Brokers that Allow Scalpers 2017:

The following brokers allow scalping in 2014. For more information about the account details and trading conditions please click on the review link below.

Broker Info Bonus US Traders Open Account
IronFX Spread: 2-3 pips
Leverage: 500:1
Minimum Deposit: $500
Demo Account: Open
60% Welcome Bonus plus Trading Contests Visit BrokerRead Review
OctaFX Spread: 0.8 - 1 Pip
Leverage: 500:1
Minimum Deposit: $5
Demo Account: No
10-50% Deposit Bonus for New Traders! Visit BrokerRead Review
Varengold Bank FX Spread: 2 Pips
Leverage:
Minimum Deposit: $2500
Demo Account: No
N/A Visit BrokerRead Review
ThinkForex Spread: 0.2 - 1.5 Pups
Leverage: 500:1
Minimum Deposit: $250
Demo Account: No
10% Ongoing bonus Visit BrokerRead Review
IBFX Spread: 2 pips
Leverage: 50:1
Minimum Deposit: $2,000
Demo Account: No
USA AllowedVisit BrokerRead Review
FXTM Spread: 0.1 Pips
Leverage: 1000:1
Minimum Deposit: $1
Demo Account: No
$2 Cashback per Lot Traded Visit BrokerRead Review
Admiral Markets Spread: 1 Pip
Leverage: 1:500
Minimum Deposit: $10
Demo Account: No
Seasonal Offers and Demo Trading Contests Available USA AllowedVisit BrokerRead Review
Hirose UK Spread: 3 Pips
Leverage: 300:1
Minimum Deposit:
Demo Account: No
$20 Free plus First Deposit Bonus Visit BrokerRead Review
SkyFX Spread: 1.7 Pips
Leverage: 300:1
Minimum Deposit: $100
Demo Account: No
Visit BrokerRead Review
UFXMarkets Spread: 2 Pips
Leverage: 200:1
Minimum Deposit: $100
Demo Account: No
30% Welcome Bonus! Visit BrokerRead Review

 

Why do some Brokers not Allow Scalpers?

There are brokers that provide their traders with platforms that allow direct market access, which allows the orders placed by traders to go directly from the platforms to the liquidity providers, without passing through the broker’s dealing desk. These brokers also charge a commission in addition to the variable spreads that traders will pay for when they execute orders. These brokers take in traders with large account capital, so they make a good amount of money on the trades of their clients. These brokers restrict their earnings simply to the spreads and commissions.

On the other hand, brokers who perform market making activity frequently take up counter positions to the trades of their clients. There is nothing illegal in this, since it is an integral part of market making. These brokers purchase large chunks of positions on the buy and sell side of the market, splinter these positions according to the miniature size of their clients’ accounts, and so end up selling these positions to buyers, or buying these positions from sellers. This puts them in counter-positions to their traders’ orders. These brokers do not charge a commission, so they can only profit from spreads and from the full amount of losses incurred by their clients. Obviously, a situation in which trades are opened and closed within seconds will not be a profitable one for such brokers. This is why you are more likely to see brokers in this category ban their traders from scalping.

However, many retail brokers would never accept the reasons stated above. Here are some of the common reasons given by brokers for rejecting scalpers:

a)    It may become problematic for liquidity providers to fulfill orders.

b)    It is difficult to cover such positions in the market.

c)     Scalpers unfairly exploit internet latency to their advantage

d)    When there is a price feed lag, scalpers can gain massively by jumping in and out of positions.

These are some reasons that brokers give for not allowing scalpers on their platforms. Whatever the reason, the real truth is that scalpers get in and out so quickly that there is not enough time for a truly bad trade to turn into stupendous profit for the wily brokers.

Some brokers maintain both market maker and ECN – style brokerage services. So you may see some brokers that cut off scalpers from their retail trading brokerage operations, but allow traders to scalp on their ECN platforms.

 

How to Recognize Brokers for Scalping

a)    One of the best ways of recognizing a broker which permits scalping is to actually see if they do…with a small account of course. Simply open a micro account and place a very small amount of money in it, and attempt to scalp. If you are able to do so without issues, then the broker permits scalping. Those brokers who don’t will contact you and tell you to stop. Some don’t give any notice and will close your account without a refund. Of course, the money lost would be quite small and won’t make much of a difference.

forex scalping

b)    Try contacting the customer service desk of the broker in question and ask them straight up if they permit scalping. Many of them will tell you the true situation of things.

c)     Try scouring online review sites to see what other traders are saying about this. Usually, you will stumble on some reviews that will tell a story about the experience of scalpers on specific platforms.

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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