There are many forex brokers in the World, but understanding what makes the best forex and CFD broker in Canada is a challenge worth undertaking.
Despite the fact that Canada has a multitude of regulations governing financial trading, there are not that many online brokers offering support to Canadian residents. Let’s take a look through those that do, and build a shortlist of the best forex and CFD brokers worth mentioning.
Economic And Financial Services Structure Is High On Development Scale
Canada is the largest Country by landmass in North America, and home to the second largest population. Current statistics put the number of residents at 37 million, with a GDP of $1.73trillion earning a placing back in the top 10 nations globally.
Whilst Canada is highly developed economically, it could be said that the volume of regulation on financial services is a little restrictive to innovation. The main regulatory bodies in Canada are the IIROC (Investment Industry Regulatory Organisation of Canada) and the CSA (Candaian Securities Agency).
There are a further 13 regional forex regulators, along with the 2 main national regulators. Compared to some other countries that only have a single regulator, the 15 in Canada can make navigating the industry pretty complicated for a forex broker.
The regulatory complexity is one of the main reasons for the lower number of forex brokers operating in Canada. That being said, for those that do operate here, the stringent regulations ensure that local traders are very well protected. This can only be seen as a positive.
CFD Brokers In Canada – A line of separation in North America
Unlike their North American neighbours the USA, CFD trading and CFD brokers are actually legal, and regulated in Canada by the IIROC. This provides Canadian residents with the option to trade CFD contracts and use leverage similar to that of Europe, and of other global financial services hubs.
There are 4 stock exchanges in Canada, including the TSX, TSXV, Neo, and the CSE. The largest of which, the TSX ranks in 9th place on global securities exchange lists, by market capitalisation.
The TSX, like the Canadian economy, is very rich in natural resources and commodities; containing more oil, gas, and mining companies than any other global exchange. It is of no surprise then that Canadians may wish to trade commodities, and indices via CFD brokers.
Being A Forex Broker In Canada Is No Easy Feat, How Did We Decide On The Best?
We have considered some key focus points that are most important to Canada when considering which forex broker is included in our online list of best brokers. Below you can find the 8 most important topics that helped us decide the best, from the rest :
1. IIROC Regulated Brokers.
As we have mentioned in this guide above, the regulators in Canada are many, but the IIROC is the one we need to keep an eye on. You can find the register here https://www.iiroc.ca/industry/Pages/Dealers-We-Regulate.aspx.
There are a few other internationally regulated brokers that do accept Canadian residents as clients, but we would be ultra selective about including any of these. This is mainly due to the additional complications that residents may encounter if they ever had to raise an issue against their broker.
2. Deposit and withdrawals should be easy, with plenty of choice.
Online brokers these days have a huge range of options that they can consider when they are evaluating which payment services to provide to their traders. There should be a wide range of different types of payments accepted, ideally without any unnecessary transaction fees.
We have noticed that there has been a move more recently between certain brokers to implement fees in areas other than the typical spreads or headline places that traders might check first. Withdrawal fees are one of these areas that has been used, and we will not include in our Canada list any brokers who are exploiting this.
3. Having a really competitive fee mode.
This will always generate some extra points when rating the best forex and CFD brokers. Irrespective of the Country you are resident of, minimising costs would definitely be high on the agenda.
Keeping spreads, transaction fees, and brokers’ commissions low cost helps to better your trading balance. The best online brokers in Canada, whether you are trading with forex, CFDs, or stocks should deliver this as standard.
4. Trading on mobile should be a feature, rather than an after-thought.
Forward thinking brokers should now show a real dedication to providing the best mobile interface, with the features that traders actually want to use.
Forex is moving online, and very much into the hands of the mobile user. Traders in Canada will need to have a fully operating broker, delivering as many of the core features found on the desktop version as one can fit into a modern smartphone.
5. To be amongst the best in Canada, brokers will need to demonstrate that they can provide a great choice of the most popular markets and commodities.
The Canadian Dollar (CAD) is not classed as one of the ‘major’ forex currencies, but falls into the category of one of the ‘minors’. This can at times make it more difficult to trade CAD at the same preferential low spreads as you might expect from the major currencies. We will delve into the value that each broker can offer, particularly in respect of CAD, seeing as it is undoubtedly a currency that carries particular interest to Canadian based traders.
6. You should have access to a demo account without trading or time limits.
It will likely not be possible to find multiple stock brokers that provide such an account, but amongst forex and CFD brokers, this is essential.
When evaluating strategies, new currency pairs, and other instruments, every trader should use a demo account in some shape or form to test. Once you have found an optimal way to use the account, and instrument together, then consider moving into a real life environment.
7. The trading platform and website in both of Canada’s national languages is an absolute must, in order to be considered amongst the best brokers.
Whilst most Canadians have their primary language listed as English, there are some 20%+ who are most comfortable in French.
Canada has a very well established multi-lingual population, but it is still necessary to provide language support in French, aswell as English in order to give the best possible trading offer. There are many small points in both forex and CFDs that would be much easier to interpret when the user can flip to a native language.
8. Customer Service is a vital part of any service provide.,
In any Country this is true, but in Canada, and North America in general, it takes on extra weight. The native English and French language support from customer service is important.
Each of the support agents should be knowledgeable, quick to respond, helpful, and ideally multi-lingual. It also goes without saying that this broker would need to have their support operating during core Canada working hours, and during the entirety of the North American forex trading session.
The Best Forex And CFD Brokers Revealed – Canada’s Most Innovative
1. AVATRADE – One of the best globally regulated forex and CFD brokers hits the mark in Canada.
AvaTrade have IIROC regulation via their tie up with Friedberg Direct. This sits proudly alongside BOI, CySEC, JFSA, FSCA, KNF, ASIC, MiFID and BVI licences. With such an extensive culture of regulation, AvaTrade can be trusted as a broker committed to delivering a global service, with a local touch.
The recent launch of AvaTrade Go to provide a World Class mobile app has won numerous awards and positions AvaTrade as an innovator in the forex trading space. This app makes trading on mobile as simple as it could be, and with a great market insights tool. The addition also of the new tool ‘AvaProtect’ gives traders a rather unique product on which to manage risk. We delve more into this during the detailed review found here.
AvaTrade provide a very wide range of instruments that can be traded in one simple platform. Forex, CFDs, stocks, options, indices, and commodities can all be traded here with very competitive conditions. The combination of Friedberg Direct and the AvaTrade platform really are a perfect match for the Canadian trader.
There is a relatively low entry point to begin your forex or CFD trading journey in Canada; with AvaTrade, you can start on a free demo account, or with a minimum deposit of just $100.
2. CMC Markets – A really solid forex broker worthy of a top 3 position.
This is a broker with multiple Tier 1 regulations across the globe, first and foremost making CMC Markets a safe place to trade. You have thousands of instruments available to trade on the excellent platform offered.