Cross pairs are often overlooked because it is not as popular as major pairs. Despite the notion, they can give higher returns if used right. What are the best forex brokers to trade cross currency pairs?
Major currencies that are paired with the US dollar are called major currency pairs. These currencies are the most actively traded worldwide, hence the name "major". Some examples of major pairs are EUR/USD, AUD/USD, GBP/USD, etc. Meanwhile, cross-currency pairs refer to a major currency traded in forex that does not include the US dollar. Some examples of cross pairs are EUR/GBP, GBP/JPY, etc.
Generally speaking, most of the forex market's most actively traded currency pairs usually include the US dollar because the currency has the greatest liquidity and makes up most of the volume traded in the market. But even so, that doesn't mean trading with cross currency pairs is less desirable. In fact, cross currency pairs can offer a higher chance of profitability, especially during huge fundamental events.
Why Should You Trade with Cross Currency Pairs?
Over the years, currency trading has evolved a lot. Since the end of World War II, many currencies were pegged and quoted against the US dollar because the US economy, in general, was the strongest and the currency was fixed to gold. Even after the end of the gold standard in 1971, the US dollar is still regarded as the primary reserve currency and has become the most liquid currency to this day.
Since then, those who wanted to exchange a sum of money into a different currency would have to convert it to US dollars first and then convert it into the desired currency. That is why US dollars were often referred to as the "vehicle currency" as it is used as the medium for international transactions. Also, most agricultural goods and vital commodities such as oil are also priced in US dollars. So in a nutshell, the US dollar plays a vital role in the financial industry.
However, although the US dollar still acts as the world base currency, the rise of forex trading has made cross currency pairs more mainstream. Instead of just focusing on the seven major dollar-based pairs, you can get even wider opportunities by trading with cross currency pairs. Since these currencies are not bound to US dollars, they can give you various price movement behaviors. While most of the market will focus on the US dollar, you can find new opportunities in these cross pairs.
What's so great about them is that it allow you to use more trading instruments. If you trade only the major pairs, you will only have a few different opportunities. But if you add cross trading pairs to the mix, you can make even more combinations to match your trading style. Instead of just focusing on the limited number of dollar-based pairs, you can find even better opportunities if you pay attention to currency crosses. So overall, you will have wider ions of strategy and instruments to use.
One way to get profitable with cross pairs is to find the highly correlated ones. Some currency pairs might be tied together because of certain world events. For example, EUR/GBP is a great pair to trade during the ongoing Brexit saga. In 2016, the Brexit vote increased the pair by 13% for 2-weeks. Such momentum can be very helpful when you trade with cross currency pairs.
The Drawbacks of Cross Currency Pairs
Despite being able to provide bigger opportunities, there are also some drawbacks that you should not underestimate. Firstly, trading with cross currency pairs can be a little more complex. If you trade with a cross pair like EUR/GBP, your profit may come in Euros or Pounds. In this case, if your base currency is the US dollar, you must convert the profit to US dollars before you can add it to your account, which sometimes can be bad depending on the conversion rate.
Other than that, trading with cross pairs may also have higher spreads due to its liquidity. If we compare it to major pairs with more stable liquidity, cross pairs tend to have wider and more volatile spreads. Therefore, trading with cross pairs may be costlier than trading with major pairs. This adds to the risk of trading that you must acknowledge beforehand.
Pay attention to the time zone and trading session where you place your transaction, too. For example, during Asian active hours, many European crosses have low liquidity. As a result, to protect themselves, forex brokers would charge a higher spread.
Best Brokers to Trade Cross Currency Pairs
When choosing the best broker to trade cross currency pairs, you should consider important factors such as the trading cost, safety, etc. Here is the list of brokers suitable for trading with cross pairs:
1. IC Markets
IC Markets is one of the best Australian-based brokers founded in 2007. The broker has obtained licenses from several authorities, including ASIC, CySEC, and the Securities Commission of the Bahamas. You can choose from several trading platforms, namely MetaTrader 4, MetaTrader 5, and cTrader. In IC Markets, you can open an account with $200 and a maximum leverage of 1:500. There are various payment methods to deposit and withdraw. Regarding trading costs, IC Markets is known to have raw spreads that enable cross currency trading with an average spread of 0.3 to 1.1 pips.
IC Markets is an online forex broker operating under the company of International Capital Markets Pty Ltd. Traders under the Australian jurisdiction are provided with the trading service of IC Markets AU that is headquartered in Australia and licensed by the Australian Securities and Investments Commission (ASIC).
On the other hand, non-Australian traders who open an account in this broker are registered under IC Markets SEY that is based in Seychelles, and regulated under the Seychelles Financial Services Authority (SFSA). The dual operation is a result of the relatively new rules from ASIC that prohibit their regulated broker to offer trading services outside Australia.
Classified as an ECN broker, IC Markets provide clients with MetaTrader 4, MetaTrader 5, cTrader as platform trading options. This broker also follows market trends to include Cryptocurrencies as one of its products, enriching its already wide selection of trading assets that include Currencies, Indices, Metals, Energies, Softs, Stocks, as well as Bonds.
The minimum deposit in IC Markets is in the middle range compared to other ASIC-regulated brokers, as it reaches $200 for every client. Market analysis materials are also prepared regularly for trading insights on IC Markets's official website, proving their competence to serve their traders with important contents created by market experts that work specifically for them.
For payment methods, IC Markets allows funding and withdrawal via wire transfer, credit card, PayPal, Skrill, Neteller, FasaPay, UnionPay, as well as Bitcoin via BitPay. The more interesting aspect from this broker is its multi-base currencies that include USD, AUD, EUR, GBP, SGD, NZD, JPY, CHF, HKD, and CAD.
As the trading technology in IC Markets is highly equipped with co-located servers and extremely low latency (especially on cTrader), the broker is widely known for its capability in hosting traders with the special needs for high-frequency trading as well as scalping.
To sum up, IC Markets is a fitting destination for active traders looking for a well-regulated broker. IC Markets is also flexible in terms of base currency and payment methods, signaling their commitment to welcome traders beyond their home country. As of late 2019, IC Markets provided their website in 18 international languages including English, Korean, Indonesian, French, Spanish, Italian, Malay, German, and Chinese.
2. Exness
Exness is a well-known broker established in 2008 with headquarters in Cyprus, Seychelles, and the UK. The broker is regulated by some of the top-tier regulatory bodies, such as the FCA (UK), CySEC (Cyprus), FSA (Seychelles), and FSCA (South Africa). Over the years, Exness has expanded its business and operates across Asia, Europe, and Africa. Regarding trading costs, Exness offers various options depending on the trading account. The standard account requires only a $1 deposit and grants a maximum leverage of 1:2000. The spread can be variable or fixed and go as low as 0 pips.
The choice of broker is adjusted to the needs of each trader. If you are a trader who only needs a basic platform and trading features with the best attributes, then Exness can be your best choice.
Exness covers its lack of feature variations with other advantages like low spreads starting from only 0.1 pip. This is very suitable for traders who use scalping strategies (Scalper). Spreads on major pairs in certain account types can also be as low as 0.0 pip, depending on market conditions.
Not only that, but traders can also enjoy other advantages such as automatic fund withdrawals. Exness processes the majority of client withdrawals instantly, without manual checks; however, withdrawals may be subject tos depending on the payment provider or method of choice.
The safety of traders' funds is also guaranteed as Exness is one of the European-based STP/ECN brokers. Exness's ability to become an official partner of the Real Madrid soccer team for 3 years, starting July 2017, also provides evidence that the company has high solidity.
Deposits and withdrawals may be made 24 hours a day, 7 days a week. However, it is important to note that the company shall not be liable fors in processing deposits and withdrawals if suchs are caused by the payment system.
Traders do not need to worry about transaction fees when depositing and withdrawing. Exness doesn't charge any transaction fees to traders even though some charges may be incurred depending on the payment provider of choice. A variety of payment methods are provided for traders, including Wire Transfer, Bank Card, Neteller, Skrill, and many others.
The financial reports and metrics on the Exness website are audited quarterly by Deloitte, one of the four largest public accounting firms globally.
Moreover, Exness is one of the mote transparent brokers in the online trading industry. Traders can find out all information about this company on the website, such as trading volume, number of active clients, client deposits, company funds, and many more.
The platforms provided by Exness vary in MetaTrader 4, MetaTrader 5, Web, and Mobile platforms. This makes it easy for traders when trading on Exness, as they can also access Exness platforms anywhere and anytime.
Over the years, Exness has developed into a broker that attracts traders. Trader's trust is further enhanced by its compliance with financial regulations like the FCA and CySEC.
One measure of client confidence can be put on the trading volume. By December 2018, their clients' monthly trading volume reached USD348.4 billion and active traders around the world surpassed 50,342.
Through the program offered by Exness, traders also have the opportunity to earn extra income by becoming their partners. From the Introducing Broker (IB) program, partners can earn up to 33% spread commission from every new client that registers with them.
Additional income can also be obtained from Exness Partners. Traders can get a spread commission of up to 25% per transaction made by traders who register through an affiliate link.
When trading with Exness, clients can also make use of its free VPS hosting services. A VPS (Virtual Private Server) offers increased reliability and stability for traders as they can maintain their trades and expert advisors without interruption in the event of unexpected technical issues, such as internet or electricity downtime.
From the review above, it can be concluded that Exness is a favorite broker for traders because of low spreads and flexible account types. This condition is very suitable for traders with limited funds but is in need of more opportunities to get maximum profit. This broker is also well known for its maximum support on both new and existing partners.
3. TriumphFX
TriumphFX is a global broker that has been around since 2009, with headquarters in Australia, Cyprus, Hong Kong, and Malaysia. The broker is regulated by Vanuatu's Ministry of Finance and Economic Management. You can choose from several account options, such as standard, premium, VIP, and platinum. Apart from that, the broker also offers a helpful Forex demo account, especially for beginners. TriumphFX generally offers a maximum leverage of 1:500 and a minimum deposit of $100. The spread can go as low as 0.4 pips for cross currency pairs.
TriumphFX offers forex and CFD trading to retail and professional investors who have successfully opened live accounts with the broker. Regulated by FSA (Seychelles) SD080 and VFSC 17901, TriumphFX caters to traders from the EU to Cyprus, Great Britain, South Korea, Italy, Malaysia, Indonesia, Singapore, Australia, and Germany for trading forex and metals.
TriumphFX was founded in 2009 and has now opened offices in Malaysia, Hong Kong, Cyprus, and Australia. The company has a diverse client base, with opportunities for less experienced investors, as well as institutional traders.
MetaTrader 4 (MT4) is the main platform provided because. In addition to facilitating client navigation, the platform contains comprehensive educational material for beginners. Copy trading is also available, where users can copy other successful investors.
After you sign up, deposits can be made in the following currencies: USD, EUR, and GBP. Deposits and withdrawals through banks are usually completed within 2-5 days. TrimuphFX operates according to anti-money laundering guidelines, so document verification is required before a withdrawal can be approved.
The company offers a welcome bonus of 5% for the international division, however, this is not available to clients in the EU. TriumphFX offers one demo account and 4 different live accounts: Platinum, VIP, Premium, and Standard. The main difference between live accounts relates to the minimum deposit.
Clients can contact customer service via ticket, email, or telephone. The team will respond to any issues the client may have quickly and responsively.
4. Pepperstone
Pepperstone is a popular forex broker that was founded in 2010. The broker is headquartered in several countries, namely Australia, China, Kenya, Ukraine, and the US. Pepperstone has licenses from ASIC, Capital Markets Authority of Kenya, CySEC, DFSA, and BaFin. In recent years, Pepperstone has served more than 70,000 clients and processes an average of USD12.55 billion annually. As a result, the company has been given several awards, including the Best Global Forex ECN Broker in 2019. In Pepperstone, traders can enjoy various trading platforms, raw spreads starting from 0.0 pips on razor accounts, over 61 currency pairs, and many other interesting features.
Pepperstone was founded in 2010 by a team of experienced traders with a shared commitment to improve the world of online trading. Based in Melbourne, Australia, they grew to become one of the largest forex brokers in the world. If traders want to find a broker that provides low spreads, fast execution, and award-winning support, then the answer is Pepperstone.
Pepperstone has a strong legality guarantee because it has been licensed by the Australian regulator ASIC and FCA. Traders' funds can be deposited in segregated accounts at top Australian banks, one of which is the National Australia Bank (NAB). Therefore, the safety of funds is not a concern if a trader chooses to open an account in Pepperstone.
They succeeded in collaborating with 23 top banks to bring Bid to investors instantly via optical fiber. This allows all orders to be executed 100 percent automatically with low latency up to 0.05 milliseconds, without dealing desk intervention and requotes, as well as with super low trading costs.
Trusted by over 73,000 traders around the world, Pepperstone processes an average of USD12.55 billion of trading volumes every day. Because of that, they have many awards such as:
- The Best Global Forex ECN Broker 2019 and Best Forex Trading Support-Europe
- Best Australian Broker and Best Trading Platform 2018 by Compareforexbrokers.com
- Best Forex ECN Broker, Best Forex Trading Support, and Best Forex Trading Conditions by UK Forex Awards 2018
With the many rewards gained, Pepperstone hopes to attract more and more traders from all over the world. The rising performance of Pepperstone is not only due to the super-tight spreads and fast execution that it provides, but also because many traders are interested in trading with deposits in currencies other than US Dollars.
For this reason, Pepperstone is one of the most market-responsive brokers because it is willing to accept deposits in 10 currencies, which include AUD, USD, EUR, CAD, GBP, CHF, JPY, NZD, SGD, and HKD.
Trading in Pepperstone would allow traders to choose between 11 trading platforms: MT4 for desktop, MT4 Mac, MT4 iPhone, MT4 Android, MT4 iPad/Tablet, MT5, WebTrader, cTrader WebTrader, cTrader cAlgo, and cTrader Mobile. The choice of trading platforms may seem confusing to novice traders, but actually, it is very useful because it has fast execution.
When trading forex, traders can enjoy raw spreads from 0.0 pips on Razor accounts, over 61 currency pairs, and commission-free account funding on a wide range of deposit options. In addition to currency pairs, Pepperstone provides many types of trading instruments, including CFDs for indices and shares, commodities, and cryptocurrencies.
Instruments in commodity trading are pretty much diversified. Not only metal, gold, and silver, but traders can also trade with soft commodities such as cotton, sugar, coffee, cocoa, and orange juice. Pepperstone also provides trading on energy (oil and gas).
There are two types of accounts provided by Pepperstone, namely Razor accounts, and Standard accounts. If you area beginner, it is recommended to choose a Standard account with an average EUR/USD spread of 1.0-1.3 pips and free commission.
Those with particular trading styles such as scalpers and algorithmic traders may enjoy the lower cost setup traditionally seen in a Razor account, with a commission from AUD7 round turn of 100k traded. You can start trading with a minimum lot of 0.01 (micro) and 1:400 leverage.
As a Pepperstone client, a trader can fund and withdraw with alternative methods including Visa, Mastercard, POLi internet banking, bank transfer, BPay, PayPal, Neteller, Skrill, and Union Pay.
If you are new to trading or looking to practice your trading strategies in a risk-free environment, you can create Demo Account in Pepperstone. But if you are an experienced trader or prefer to learn by doing, Pepperstone provides a Live Account that allows you to trade with live executions and pricing.
Traders can also follow and copy strategies from popular traders using third-party services while learning how to improve their trading abilities. Pepperstone has partnered with a range of social trading platforms that traders can choose from, such as Myfxbook, ZuluTrade, Mirror Trader, MetaTrader signals, and Duplitrade.
5. FXCM
FXCM is one of the top brokers in the world that was established in 1999. The broker was originally headquartered in the US. Still, today, the business has expanded a lot, so now it has headquarters in Australia, Canada, Chile, France, Germany, Hong Kong, Israel, the UK, Japan, South Africa, and Italy. Several regulatory bodies, such as ASIC, CONSOB, CySEC, DMCC, FCA, ISA, SFC, and ESMA regulate FXCM. Generally, FXCM offers competitive spreads starting from 0.1 pips, low negative slippage, and fast trade execution. The company also claims up to 89% of orders are executed at the requested price or better.
FXCM (Forex Capital Markets) is a brand name of a retail broker for trading on the financial market, especially the foreign exchange market. The broker was founded in 1999 and was originally headquartered in the United States. After a series of lawsuits from customers and case settlements by the US regulator (CFTC), FXCM moved from the US and became a UK-based broker, authorized and regulated by the Financial Conduct Authority (registration number 217689).
Trading with FXCM is supported by enhanced execution with the Liquidity providers' stream pricing through the FastMatch Electronic Communication Network.
FXCM works with several global banks, financial institutions, and other market makers as their Liquidity providers including Barclays Bank, Citadel Securities, Citibank, Deutsche Bank, FASTMATCH, XTX Markets Limited, UBS, Morgan Stanley, Commerzbank, and Jefferies Financial Services.
This, in turn, enables FXCM to present its clients with fast trade execution, competitive spreads, low negative slippage, no re-quotes, no stop/limit restrictions, and up to 89% of orders are executed at the requested price or better.
For the trading platform, FXCM is remarkably known for its proprietary product called Trading Station. The latest version of this platform's web display is claimed to be built in Mac Friendly HTML5. It features a range of trading appliances such as integrated news, economic calendar, FXCM's top trading tools, social trading functionalities through FXCM Cloud, customized trading analytics, automated strategies, and advanced charting for better analysis. For flexible traders who prefer trading on-the-go, FXCM has also provided Trading Station in mobile version, both for iOS and Android users.
However, the company's in-house platform is not the only option presented for clients. FXCM also gives the choice to use MetaTrader 4 for clients who are more familiar with MetaQuote's product. Also, ZuluTrade access is enabled for clients with keen interests in copy trading schemes that transcend across brokers.
Instead of classifying account types based on minimum deposits, FXCM chooses to offer trading accounts based on the instruments traded. For FX traders, this broker provides Active Trader and Institutional accounts.
Active Trader is the ultimate account type for retail traders with two-tier pricing. Tier 1 applies a minimum deposit of $25,000 with a $30 commission for 1 million volumes traded, while Tier 2 has no detail on deposit requirement but gives better fee conditions. Spreads in both tiers start from 0.2 pips.
Institutional account, also known as FXCM Pro, is marketed as a wholesale execution and liquidity solution for retail brokers, hedge funds, and emerging market banks. The account presents trading spreads from 0.1 pips and other competitive benefits like API solutions as well as prime brokerage services.
For non-FX traders, FXCM provides a CFD trading account with low spread costs from 0.37 pips (in XAU/USD) and a wide range of class assets from precious metals, soft commodities, and indices.
Last but not least, a collection of in-depth articles is provided to help traders' knowledge and insights on the forex market. Trading tools like FXCM Plus, Market Scanner, Trading Signals, and Technical Levels are also developed to support traders who open accounts in FXCM .
In conclusion, FXCM is an experienced retail broker with a lot of "ammunition" to help traders with its best version of execution, pricing, and tools. It is a well-regulated broker backed with a long history in the financial market, even though it has a dark history in the United States' brokerage industry.
Still, the relatively high standard on minimum deposit ($25,000) puts FXCM as a broker suitable for experienced traders with good money management. It is not recommended for new traders with limited capital.
6. FBS
Yes, FBS is a good broker for trading cross currency pairs. The broker offers a variety of cross currency pairs to trade. FBS also offers competitive spreads on cross currency pairs. For example, the spread for the AUD/CAD pair is typically around 1.0 pip on the Standard account.
In addition, FBS offers a variety of trading accounts for cross currency trading, including the Standard account, the Cent account, and the Zero spread account. The Standard account has a spread of 2 pips, while the Cent account has a spread of 4 pips. The Zero Spread account has a guaranteed spread of 0 pips but also charges a commission of $12.90 per lot.
Since 2009, the action of FBS Holding Inc. or known as FBS in the world of forex trading has been recognized by various international institutions. With clients reaching 14 million as of 2019, FBS has received the title of Most Transparent Forex Broker 2018, Best Investor Education 2017, Best Customer Service Broker Asia 2016, IB FX Program, and many others.
FBS is regulated by FSC Belize and CySEC Cyprus. This broker has been trusted by millions of traders and 370 thousand partners from various countries. Based on their data, FBS garners about 7,000 new traders and partner accounts every day. And, 80% of the clients stay in the FBS for a long time. No wonder the broker is growing rapidly due to the incredible growth in the number of clients.
Trading products offered by FBS range from forex, CFD, precious metal, and stock. For forex trading, CySEC-regulated FBS offers leverage up to 1:30 on Cent and Standard Accounts. Clients who want to try higher leverage than that can alternatively register an account under FBS Belize.
FBS spread begins from 0.5 pips for Pro account type and from 0.7 pips for Standard and Cent accounts. On a standard account, volume orders can be made from 0.01 to 500 lots. Therefore, this account is recommended for experienced traders.
Whereas on Cent Accounts, volume orders can be carried out with a maximum of 500 cent lots or the equivalent of 5 standard lots. Cent Accounts involve a different level of risk. FBS recommends Cent Accounts for beginner traders. All account types support the following trading instruments: 36 Forex pairs, 8 metals, 3 energies, 11 indices, 127 stocks, 5 crypto pairs.
Before plunging into the real forex market, traders can practice with FBS Demo Account which consists of two types, i.e Standard and Cent.
FBS uses the MetaTrader 4 and MetaTrader 5 platforms. They offer them on Windows and Mac as well as Android and iOS mobile. These platforms provide a trading experience at traders' fingertips, allowing traders to progress as a trader anywhere at any time.
MetaTrader platforms also have a variety of mainstay features, including the possibility to create, buy, and use expert advisors (EA) and scripts, One-click trading and embedded news, technical analysis tools, the possibility to copy deals from other traders, hedging positions, and VPS service support.
Another advantage provided by FBS is a deposit bonus of 100% for clients who fulfill certain requirements. The process of FSCing and withdrawing funds can be run easily and quickly. Based on clients' testimonies, each process usually takes no more than 3-4 hours, except on holidays.
Traders also have the opportunity to develop a side business when trading with FBS, namely as an Introducing Broker (IB) or Affiliate. The FBS partnership system provides partner commissions that are already in 3 level positions. Only by introducing new clients to FBS according to certain procedures, traders can earn extra income.
Traders will also get trading education experience at FBS. They have prepared a comprehensive forex course. The course consists of 4 levels: beginner, elementary, intermediate, and experienced. Traders can take courses that will turn them from newbies to professionals. All materials are well-structured. Besides, FBS provides various forex analyzes, webinars, forex news, and daily market analysis that can be accessed easily on their site.
Traders can access the FBS website with many language choices. Of course, this will increasingly provide comfort for traders. Available languages include English, Italian, French, Portuguese, Indonesian, Spanish, and others. Live chat support is also provided 24 hours 7 days a week.
In conclusion, FBS is a widely known broker among retail traders around the world. It continually grows to become a preferred broker because of flexible trading conditions that enable its clients to trade with various instruments, low deposit, and other trading advantages.
Conclusion
From the explanation above, we can see that trading with cross pairs can give many benefits, especially regarding trading opportunities. If you can use the right moment to choose the right pair to trade, there's a big chance that you'll get a high return from it.
However, trading with cross pairs also has its drawbacks and risks. Instead of paying attention to US dollar-related events, you must watch the dynamics of other news that may influence other currencies. Also, the volatility of cross pairs, especially the less popular ones, is usually high with less liquidity, resulting in higher spreads from the broker.
All in all, trading with cross currency pairs is a great choice to expand your portfolio and try something new. Although some risks are attached, using the right strategy and picking the right broker can be profitable.