4 Best Forex Brokers for Energy Trading: 2024 Edition

List of Top Energy Trading Brokers

How did FXEmpire select the Best Forex Brokers for Energy Trading?

• We’ve exclusively chosen brokers with a high overall score in our proprietary broker rating system.
• We confirmed each broker’s licensing, ensuring robust regulation and client protection.
• We explored the broker’s tradable instruments to ensure a diverse range of energy products are available to trade on.
• We checked the broker offers the ability to trade energy commodities using leverage.
• We opened live trading accounts to examine the broker’s energy trading fees and their competitiveness against the industry average.
• We tested each broker’s trading platform to determine its user-friendliness and access to energy markets.
• We conducted a detailed examination of the account types offered to ensure energy markets are available to trade on each one.

Our team of experts has identified each broker’s strengths and weaknesses using FX Empire’s comprehensive methodology. Here’s how we test.

Now let’s go through the selected brokers.

How did FXEmpire select the Best Forex Brokers for Energy Trading?

Here is a quick guide on how to choose a forex broker for energy trading.

How is the broker regulated?

When trading the energy market, it is crucial to use a regulated broker authorized and licensed by a government’s financial authority. Regulated brokers must adhere to strict rules in handling your money and executing your trades. A breach of these rules will result in fines and the loss of their license. Therefore, trading with a regulated broker is generally the safest option.

However, not all regulated brokers share the same standards. In our broker rating reviews, we classify regulators into three tiers:

Tier-1 regulators like the UK FCA, IIROC, CySEC, and ASIC must legally separate client funds from their own and offer negative balance protection to keep accounts from falling into deficit. These regulators also require brokers to join a compensation scheme, which protects client investments if the broker goes bankrupt. To confirm a broker’s regulatory adherence, review their legal terms and check with the relevant country’s regulatory register.

Find Best FCA-regulated brokers and Best ASIC-regulated brokers.

Tier-2 regulators like DFSA, FMA, and FSCA common in smaller or emerging markets, offer a fair level of investor protection with some enforcement of operational rules and client fund security. However, their oversight is not as strict as Tier-1 regulators. These regulators mandate brokers to meet certain financial standards and might require client fund segregation, though other protective measures such as negative balance protection may not be as stringent.

Tier-3 regulators like VFSC and Bahamas SCB found in jurisdictions with lax oversight, provide minimal investor protection with looser regulations on financial reporting and client fund handling. Their less rigorous framework can lead to weaker enforcement and a higher risk for traders. It’s essential for traders to thoroughly vet brokers regulated by these authorities.

Unregulated brokers operate without financial oversight, offering services without standard investor protections or adherence to financial regulations. Such brokers are not bound to segregate client funds or provide negative balance protection, exposing traders to the risk of losing more than their initial investments. In case of disputes or broker failure, clients have no regulatory body to turn to, facing greater risks without any compensatory mechanisms. Traders should exercise extreme caution, fully understand the risks, and weigh the benefits against the potential drawbacks of trading without regulatory safety measures.

Read more about Best regulated forex brokers.

What fees to consider when choosing a broker?

Trading fees significantly influence your overall profitability. Here are several fees to consider when selecting a broker:

• Spread: The difference between the buy and sell prices.
• Commission: A fee charged for buying or selling.
• Overnight/swaps: Fees related to holding leveraged or margined positions overnight.
• Payments: Charges associated with deposits and withdrawals.
• Inactivity: Fees imposed due to no activity within an account.

A broker’s trading fees must be transparent and clearly outlined on their website. If this information is not readily available, it could indicate the broker is concealing crucial details, and it’s advisable to avoid such entities.

A good quality broker will want you to know how fair their fees are and the protections they provide in protecting your capital.

Read more about Best lowest spread forex brokers and Best zero spread forex brokers.

How to choose the best account type?

From my experience, brokers commonly provide a range of one to seven different trading accounts. These account types can differ in the number of tradable instruments, minimum deposit requirements, and the availability of special products. However, the primary contrast between these accounts typically lies in their trading fees.

Trading accounts can generally be categorized into commission-free and commission-based accounts.

• A commission-free account charges no fees to buy or sell. Instead, most fees are incorporated within the spread, leading to wider spreads on these accounts.
• A commission-based account charges a fee to buy or sell. This fee allows access to price quotes directly from the interbank market, resulting in narrower spreads.

The selection of a trading account depends on the individual trader’s style. Novice traders may favor a commission-free account due to the costs being integrated into the spread, simplifying risk management decisions. Conversely, short-term traders might opt for a commission-based account to benefit from reduced spreads, enabling precise trade execution.

Learn more about Best ECN forex brokers and Best STP forex brokers.

What is leverage and how does it work?

Leverage is a powerful tool in forex and CFD trading that lets traders hold a large position with a relatively small capital outlay. For instance, with a leverage ratio of 1:30, you could steer a $3,000 position with just $100.

Regulators like the FCA in the UK, CySEC, ASIC, Japan’s FSA, and IIROC cap leverage for retail energy product trading at 1:10 for safer trading environments. However, some offshore and unregulated brokers might tempt you with leverage as high as 1:3000, which comes with a higher risk profile.

Remember, leverage amplifies both profits and losses based on the full value of the trade, not merely the margin. If your account lacks the necessary funds to sustain your position, a margin call may occur, and your trades could be closed automatically, potentially leading to significant losses. Be wary of brokers that offer extremely high leverage, as this can increase the risk of such events.

Explore Best forex brokers with high leverage.

How to choose a suitable trading platform?

A trading platform is your gateway to the global energy market, enabling you to observe real-time market data and execute trades. When choosing a platform, consider the following aspects:

• Ensure accessibility across desktop, web, and mobile devices.
• Check for the availability of free, real-time price data.
• Look for integrated drawing tools and technical indicators.
• Seek platforms offering tutorials for user understanding.
• Ensure easy access to customer support.
• Confirm whether the broker allows third-party integrations.

Below I’m providing a list of some widely used trading platforms.

MetaTrader 4: The ‘go-to’ forex trading platform which has excellent charting capabilities, technical analysis tools, and automated trading features. Read more about best MT4 brokers.

MetaTrader 5: An updated version of MT4 with more indicators, timeframes, and markets. Read more about best MT5 brokers.

cTrader: A platform specifically designed for high-frequency traders and scalpers. Read more about best cTrader brokers.

TradingView: A browser-based social trading platform with advanced research tools and access to global markets. Read more about best TradingView brokers.

In-House Proprietary Software: Some brokers may invest in having their own proprietary trading software.

Check out our dedicated guide on Best forex trading platforms.

How can I trade energy commodities?

Trading commodities can be an exciting and diverse way to engage with the financial markets. Here are some ways you can trade commodities:

• Spot Trading: This involves buying or selling a commodity for immediate delivery. It’s common for non-perishable commodities like metals, where traders can take physical delivery.
• Futures Contracts: These are standardized contracts to buy or sell a specific commodity at a predetermined price at a specified time in the future. Futures are traded on regulated exchanges and can be used for hedging or speculation.
• Options on Futures: These give you the right, but not the obligation, to buy or sell a futures contract at a specific price before a certain date.
• Commodity ETFs (Exchange-Traded Funds): ETFs that track commodity prices or commodity indices allow you to invest without directly trading the commodities themselves. They can be bought and sold like stocks.
• Commodity Stocks: Buying stock in companies involved in the production of commodities, such as mining or energy firms, provides indirect exposure to commodity prices.
• Commodity CFDs (Contracts for Difference): CFDs allow you to speculate on the price movement of commodities without owning the underlying asset. You agree to exchange the difference in price from when the contract is opened to when it is closed.
• Commodity Mutual Funds: These funds pool money from multiple investors to invest in a diversified portfolio of commodities or commodity-related companies.
• Physical Commodities: Direct investment by buying and holding a physical commodity, though this is less common for individual investors due to storage and security concerns.

Explore Best commodities trading brokers.

What to avoid when choosing a forex broker for energy trading?

Here are some things to avoid when selecting a forex broker for energy trading:

• Unregulated Brokers: If an unregulated broker decides to act fraudulently and steal your capital, there are no protections in place to reclaim your capital.
• Lack of Transparency: If you cannot easily identify a broker’s regulatory status, trading fees, and conditions, it’s a red flag and you should avoid them.
• No Physical Presence: If a broker does not have a physical office with employees in a well-established region, it’s another red flag that you should avoid.
• Unrealistic Profit Promises: Brokers that make extravagant promises of substantial profits often lack honesty and may operate without proper regulation.

How to avoid forex and CFD scams?

Unfortunately, the forex and CFD industry are rife with scams. Here are some guidelines to avoid them:

• Only trade with brokers regulated by well-established financial authorities and verify their licenses through the official regulator’s website.
• Ensure the broker maintains a physical office in a region governed by a strong and reputable regulatory framework.
• Check for live customer support for assistance with any concerns or queries.
• Conduct a background check by examining online news articles and broker reviews.
• Use payment methods for deposits and withdrawals that you are already acquainted with.
• Carefully review the broker’s terms and conditions before committing to any agreements.

Our Methodology

We employ a proprietary rating system to assess brokers, analyzing 250 data points across nine key categories, encompassing:

• Trustworthiness: We verify the brokers’ authorizations and licenses by the respective country’s regulatory body.
• Fees: We evaluate trading fees by creating live trading accounts and comparing them against industry standards.
• Trading platform and tools: We test the trading platforms to gauge the range of features and user-friendliness.
• Tradable instruments: We identify the number of tradable instruments to ensure there is a diverse range available.
• Customer support: We interact with the customer support team to test the ease of access, knowledge, and helpfulness.
• Payment methods: We examine the different deposit and withdrawal methods available and their associated fees.
• Account types: We explore the features and benefits of each account type including execution method, minimum deposits, and more.
• Research and education: We assess the quality of the broker’s research and educational materials.

Here you can learn more about our review process.

For this guide, we delved into the variety of tradable instruments offered by the brokers to confirm they include a wide array of energy products for trading. Our evaluation also included an assessment of whether brokers facilitate the trading of energy commodities with the use of leverage.

To get a hands-on perspective, we opened live trading accounts to scrutinize the energy trading fees imposed by each broker, benchmarking them against the industry standard to gauge their competitiveness. Additionally, we conducted an in-depth review of the account types each broker offers, ensuring that trading in energy markets is a consistent feature across all available options.

Meet Our Writers

The team of forex and CFD writers and editors at FX Empire is composed of trading industry professionals and seasoned financial journalists. Our writers have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

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