6 Best Natural Gas Forex Brokers for 2024

How to Choose a Forex Broker for Natural Gas Trading?

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

How can I trade natural gas?

Trading natural gas offers various avenues:

• Futures Contracts: These are agreements to buy or sell a standardized quantity of a commodity at a future date and a fixed price. Futures contracts for natural gas are primarily traded on futures exchanges like the Chicago Mercantile Exchange (CME) and the ICE Intercontinental Exchange. Discover Best futures trading brokers.
• Direct Trading via Brokers: Some brokers provide the capability to trade these futures contracts directly, acting as intermediaries between you and the exchange. However, this method is generally preferred by professional traders.
• Contracts for Difference (CFDs): Many retail brokers offer trading in CFDs on both spot and futures markets. A CFD is a contract to exchange the difference in the price of a security from when it is bought to when it is sold, with the broker often acting as the counterparty. Depending on the broker’s model, they may hedge their exposure to your trade in the futures market. CFDs allow traders to speculate on price movements, both up and down, using margin. Find out Best CFD brokers.
• Options: Trading through options contracts gives the holder the right, but not the obligation, to buy a security at a predetermined price on a specified future date. Natural gas options are commonly traded on options exchanges like the CBOE Exchange. Many brokers also offer the chance to trade CFD options, combining the benefits of options trading (e.g., paying a premium upfront as margin, eliminating the need for stop-loss orders) with the flexibility of CFDs. Discover Best options trading brokers.

Trading directly with exchanges for futures and options is complex and mainly used by institutional traders. In contrast, trading CFD futures contracts and CFD options offer a more accessible way for retail traders to engage in the energy market.

How is the broker regulated?

When trading natural gas, it is imperative to trade with a regulated broker that is authorized and licensed by a government’s financial authority. Regulated brokers are bound by stringent regulations governing the handling of your funds and the execution of trades. Any violation of these regulations can lead to hefty fines and the revocation of their license. Therefore, opting for a regulated broker typically ensures the safest trading environment.

However, it’s essential to note that not all regulated brokers adhere to the same standards. In our broker rating evaluations, regulators are classified into three tiers:

• Tier-1 regulators encompass renowned financial authorities such as the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), and others.
• Tier-2 regulators, though less widely recognized, uphold rigorous standards; examples include the Dubai Financial Services Authority (DFSA) and the Financial Markets Authority of New Zealand (FMA), among others.
• Tier-3 regulators typically represent offshore-based jurisdictions, like the Vanuatu Financial Services Commission (VFSC) and the Securities Commission of the Bahamas (SCB).

Tier-1 regulators provide the highest level of investor protection. Brokers regulated by entities like the UK FCA, IIROC, CySEC, and ASIC are legally obligated to segregate client funds from their own and offer negative balance protection to prevent accounts from falling into negative balance.

Moreover, brokers regulated by the FCA, IIROC, and CySEC are required to participate in compensation schemes, ensuring that client funds are safeguarded in case of broker insolvency.

Check out our guides on Best CySEC-regulated forex brokers and Best FCA-regulated forex brokers.

To verify a broker’s regulatory status and authorizations, individuals can review the broker’s legal terms and conditions and consult the regulator’s register in the country where the broker operates.

It’s important to be cautious of unregulated brokers, as they operate without adherence to strict rules governing fund handling. Entrusting funds to unregulated brokers poses a significant risk, as there are no legal avenues for recourse in the event of misappropriation or theft.

Read more about Best regulated forex brokers.

What fees to consider when choosing a broker?

The impact of trading fees on your overall profitability cannot be overstated. Brokers want to charge the highest fees possible, whereas traders must look for the most balanced pricing structure.

When choosing a broker, it’s essential to take into account various fees, including:

• Spread: The variance between the buying and selling price.
• Commission: Fees levied for executing buy or sell orders.
• Overnight/swaps: Charges linked to maintaining leveraged or margined positions overnight.
• Payments: Fees associated with deposits and withdrawals.
• Inactivity: Charges applied in the absence of any activity within an account.

A broker’s trading fees should be transparent and clearly stated on their website. Failure to provide this information upfront may suggest that the broker is withholding crucial details, signaling a potential red flag for investors.

Discover Best lowest spread forex brokers and Best low swap fees forex brokers.

How to choose the best account type?

Based on years of experience, I have seen brokers offer a range of one to seven trading accounts, each varying in tradable instruments, minimum deposit requirements, and fees. However, the primary disparity among these accounts commonly lies in their trading fee structures.

Trading accounts can generally be classified into two categories: commission-free and commission-based accounts.

• A commission-free trading account imposes no charges for buying or selling, as the costs are integrated into the spread, which can result in wider spreads.
• A commission-based trading account incurs a fee for buying or selling but often features narrower spreads as price quotes are directly sourced from the broker’s liquidity provider.

The choice of a trading account hinges on the individual trader’s preferences and trading style. Novice traders may prefer a commission-free account as it simplifies risk management decisions with costs integrated into the spread. Conversely, short-term traders may opt for a commission-based account to capitalize on reduced spreads, facilitating precise trade execution.

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

What is leverage, and how does it work?

Leverage has been instrumental in expanding forex and CFD trading, allowing traders to manage larger positions with a modest deposit.

If a broker offers a leverage ratio of 1:10, it means that just $1 of your capital is needed to control a position size worth 10 times more. Essentially, you can manage a position valued at $1,000 using only $100.

Respected regulatory bodies, such as the UK’s FCA, CySEC, ASIC, FSA Japan, and IIROC, enforce retail trading leverage restrictions for energy products like natural gas, typically capped at 1:10, to ensure a secure trading environment.

Conversely, many offshore and unregulated brokers might offer higher leverage, sometimes reaching up to 1:1000. It’s advisable to exercise caution when dealing with such brokers.

Explore Best forex brokers with high leverage.

Leverage has the potential to amplify both gains and losses. Your profit or loss is calculated based on the entire trade value, not solely the margin you put up. In the event of insufficient capital in your account to manage your trade value, the broker may issue a margin call and automatically close your trades, leading to unforeseen losses. Therefore, it is advisable to approach brokers offering excessively high leverage with caution.

How to choose a suitable trading platform?

A trading platform serves as your portal to the global energy market, facilitating real-time market data and trade execution. When selecting a platform, it’s essential to consider the following factors:

• Accessibility: Ensure compatibility across desktop, web, and mobile devices for seamless trading experiences.
• Real-time Data: Verify the availability of free, real-time price data to make informed trading decisions.
• Tools and Indicators: Look for integrated drawing tools and a comprehensive range of technical indicators to aid in market analysis.
• Education: Seek platforms offering tutorials and educational resources to enhance your understanding and trading experience.
• Customer Support: Ensure easy access to reliable customer support channels for assistance with any platform-related issues.
• Third-party Integrations: Confirm whether the broker allows integration with third-party tools and services to enhance your trading decisions.

Some popular trading platforms include:

• MetaTrader 4 (MT4): A well-known platform featuring real-time charts, advanced order tickets, diverse timeframes, and integrated technical analysis indicators and drawing tools. Read more about best MT4 brokers.
• MetaTrader 5 (MT5): An upgraded version of MT4 offering a broader range of execution styles, order types, timeframes, and indicators. Read more about best MT5 brokers.
• cTrader: Tailored for high-frequency trading and scalping, this platform is specifically designed for algorithmic traders. Read more about best cTrader brokers.
• TradingView: A web-based social trading platform equipped with advanced charting and research features across global asset classes. Read more about best TradingView brokers.
• In-House Proprietary Software: Some brokers develop their custom platforms with additional features compared to third-party platforms.

Some brokers offer demo trading accounts which allows you to test different platforms in a virtual environment. It is a good way to test which trading platform is most suitable for your style of trading.

Check out our dedicated guide on Best forex trading platforms.

What to avoid when choosing a forex broker for natural gas trading?

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

• Unregulated Brokers: Trading with unregulated brokers entails significant risks. If the broker engages in fraudulent activities or misappropriates your funds, there are no safeguards to recover your capital.
• Lack of Transparency: Difficulty determining a broker’s regulatory status, trading fees, and terms indicates a lack of transparency. This lack of clarity is a red flag that the broker may be concealing important information.
• Absence of Physical Presence: Brokers without a physical office and employees in a reputable region raise cocerns. A reputable broker typically maintains offices in well-known financial regions and employs a substantial workforce to manage its operations.
• Unrealistic Profit Promises: Brokers that make exaggerated promises of substantial profits are likely not being honest and may be operating without proper regulation. It is advisable to steer clear of such brokers to avoid potential risks.

How to avoid forex and CFD scams?

Unfortunately, the forex and CFD industry is fraught with scams. Here are some pointers to avoid them:

• Only trade with brokers regulated by reputable financial authorities, and confirm their licenses via the official regulator’s website.
• Verify that the broker operates from a physical office located in a jurisdiction governed by robust regulatory standards.
• Ensure access to live customer support for prompt assistance with inquiries or issues.
• Conduct thorough due diligence by researching online news articles and broker reviews.
• Opt for familiar payment methods for deposits and withdrawals.
• Carefully scrutinize the broker’s terms and conditions before entering into 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 also checked each broker offers a good range of natural gas products to trade on from feature-rich and easily accessible trading platforms. We also ensure that selected brokers offer competitive spreads on natural gas trading.

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.

Related Broker Guides

• Best Forex Brokers
• Best Energy Trading Brokers
• Best Gold Trading Brokers
• Best Oil Trading Platforms
• Best Metals Trading Platforms
• Best Commodity Trading Brokers
• Best Forex Brokers for Beginners

FAQ