The Best Forex Brokers in New Zealand
The NZ Financial Markets Authority FMA (their local derivatives issuer regulatory body) has a list of providers on their register. The list below shows the best New Zealand forex brokers from this register. It should be noted that by dealing with these foreign currencies brokers a NZ resident has access to free dispute resolution service to occur if issues arise.
1) AxiTrader – 10/10 Rating
Axitrader is a true ECN broker which means they allow direct forex trading with liquidity providers. This makes spreads low and commissions are $3.50 AUD per side which is also value for currency. They offer the worlds most popular forex trading platform (MetaTrader 4) and have won awards including the best online broker customer service. Read more…
2) CMC Markets – 8/10 Rating
CMC Markets is more than just a foreign exchange broker. They also offer share trading on major stock exchanges. They also offer Contract For Difference CFDs, treasury and commodity trading. This is all available through their own forex trading platform which is combined the online broker trading. Read more…
3) Plus 500 – 7.5/10 Rating
Plus500 allows trading on a not just forex markets but also on cryptocurrency including Bitcoin. Other CFDs and commodities can also be traded online. Leverage is up to 300:1 and unlike CMC and AxiTrader there are no commissions on trade. The fx broker has a presence globally. Read more…
4) IG Markets – 4.5/10 Rating
IG is one of the largest retail fx broker worldwide marketing itself as an all-in-one trader solution. They are a stockbroker, currency broker and CFDs provider. They offer a number of forex platforms that impact the spreads and commissions on trades. The broker has a low leverage level which excludes many intermediate and expert forex traders. Read more…
|FMA Authorised (New Zealand)||Minimum Initial Deposit||Forex Trading Platform||Leverage|
|CMC Markets||Yes||$200||Next Generation||500:1|
|IG Markets||Yes||$450||MT4, L2||200:1|
Selecting The Right NZ Forex Broker To Suit Your Needs
When selecting a New Zealand forex broker consider the following 5 aspects:
1) Brokerage Fees which primarily is spreads. Spreads are similar to those a traveller views when going to a foreign exchange provider with a different price for ‘buying’ a currency compared to ‘selling’ the same currency. The foreign exchange provider makes the difference which is called the ‘spread’. Some forex brokers will move to minimise these spreads and instead charge a commission. This increases the transparency of forex brokerage costs and can lead to lower overall brokerage. These types of NZ brokers are called ECN brokers. It should be noted that some NZ forex broker charge other fees for holding positions, trading exotics and certain funding methods.
2) Forex Trading Platforms help individual online forex brokers match individual traders with overseas liquidity markets. The main markets are in New York and London so the trading platform servers need to be close to these locations. Choosing the right forex trading platform will mean finding one that has a good interface, fast trading execution and it’s popularity. By using a popular forex platform like cTrader or MetaTrader 4 a broker can relatively seamlessly change the NZ forex broker they trade with.
3) Leverage is critical for currency trading to make it worthwhile for traders. With currencies often moving by fractions of a percent each day, leverage makes these changes more substantial. The leverage levels can up to 10x different so this element needs to be considered. It’s also worth noting that higher leverage is not necessarily better. This is because higher leverage increases the risks of forex trading.
4) Risk Management features can help forex brokers reduce the risks associated with leverage. Some management tools are in-built such as minimum balance protection which ensures a NZ trader doesn’t lose more than their deposit. Other features need to be enabled on individual trades such as guaranteed stops where a broker can determine the most they are willing to lose on a transaction. It should be noted that these features can increase the brokerage costs of the trader.
5) Regulation: The NZ financial service providers register created by the Financial Services Market (FMA) show locally regulated fx brokers. There are many requirements of the New Zealand regulators so choosing these fx broker will reduce the risk of forex scans. The brokers listed on this page meet FMA requirements.
Best Forex Trading Platform
- Axitrader – 5 Stars
- CMC Markets – 4 Stars
- IG Markets – 4 Stars
- Plus500 – 3.0 Stars
AxiTrader offer MetaTrader 4 (MT4) created by MetaQuotes which globally is the most popular forex trading platform. Both a traders demo account and live account utilised MetaTrader 4 which has advanced functionality and an easy to use platform.
Using MetaTrader 4 allows a forex trader to easily switch forex brokers as the leading brokers offer the forex platform. Using a forex brokers proprietary trading platform on the other hand builds-in loyalty due to the difficulty in switching platforms including the interface they use.
MT4 allows New Zealand forex trading through a PC, Mac, iPhone or android device. There is also a web-based application which allows individuals to use shared devices without requiring to download additional software. This is especially handy when using a live account when travelling.
As mentioned above, most global and New Zealand forex brokers offer MetaTrader 4. What makes Axitrader gain the edge is their ‘next generation’ features. These include the ability to find opportunities in the market through their correlation trader and a feature to see how others are trading through an exclusive sentiment indicator. Next Generation also offers an alarm manager, economic calendar, trade journal that is automated, interactive session map and forex news within the platform.
Lowest Forex Trading Costs
- Axitrader – 5 Stars
- IG Markets – 3.5 Stars
- Plus500 – 2.5 Stars
- CMC Markets – 2.0 Stars
AxiTrader is considered a ECN forex broker. This means that is allows NZ forex traders to trade directly with liquidity pools without the forex broker marking up prices (spreads). The average spreads below are therefore market prices and not those set by the NZ forex broker. The most popular currency pairing spreads include for the EUR USD of 0.9, AUD USD of 0.64 and GBP USD of 1.39. Spreads can be as low as 0.1 for a pro account. This is the lowest recorded for any NZ forex broker.
The AxiTrader Pro account spreads show above are lower because as above explained they are market-based spreads. The NZ forex broker still needs to make money so a commission is charge which is $3.50 AUD per side. In most cases this will remain a lower trading cost than the standard account.
The Pro account brokerage costs are a combination of the market based spreads and the commission charged by AxiTrader which are the lower of the NZ forex brokers.
It should be noted that other fx broker costs can apply when trader in New Zealand. These include a charge for holding positions overnight and certain deposit/withdrawal fees that may be charge by financial institutions for international transfers.
Highest Leverage FX Brokers
- Axitrader – 500:1
- CMC Markets – 500:1
- Plus500 – 300:1
- IG Markets – 200:1
All NZ forex brokers offer leverage due to the traditional small movements of currency markets. Leverage amplifies these movements making them lead to significant profits or losses. AxiTrader offers the highest leverage of the New Zealand fx brokers of 500:1. This means that a movement on a currency pairing will be amplified 500 times by multiplying the amount traded. So for example, $200 traded will be amplified to $10,000.
Leverage increases the exposure to currency markets amplifying profits and losses.
This website does not provide investment advice so it can’t indicate what leverage is best. That said, choosing a NZ forex broker like AxiTrader gives options, especially when automating trades. A forex trader can indicate to AxiTrader if they prefer a lower leverage level when trading. Remember, losses can exceed the deposit made so it’s important to understand the risks of forex trading.