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Best 5 Digit Forex Brokers

May 09, 2022
Last modified May 10, 2022

What is a 5-Digit Forex Broker

Prior to 2007, the system of forex price quotations using 5 digits or 5 decimals was virtually unknown. All forex quotes were 4-digit or 4-decimal priced quotes, meaning that prices would include 4-decimal points in the format 1.2345. However, over the last few years, we have seen a transition away from the 4-digit system to a 5-digit price quotation system.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Almost all forex brokers now offer 5-decimal quotations, with the last decimal point in the quote representing a partial pip value, usually equivalent to one-tenth of a pip. Brokers presenting a 5-decimal point quotation system in pricing currency pairs are therefore referred to as 5-digit brokers or 5-decimal brokers, and pricing of currencies is done in this format 1.23456. Usually, the 5th digit is represented with a smaller font than the first 4 digits, to reflect the fractional nature of this digit.

5-digit brokers can therefore be defined as forex brokers that offer a 5-decimal or 5-digit price quotation system. The only currency pairs exempted from this rule are the Yen crosses, which have also undergone a transition from their traditional 2-decimal price quoting system to a 3-digit price quotation system.

Why a 5-Digit Forex Pricing System?

Forex trading really exploded in the 2000s and as brokers multiplied and began to reach regions of the world that were hitherto not engaged in forex trading, competition became fierce and brokers started to look for ways to attract and keep their clients, especially the high net-worth ones. One of the solutions that brokers devised was to create a more accurate and precise system of pricing forex products which would serve two purposes:

  • a) Reduce the cost of trading by lowering spreads.
  • b) Further decimalize prices so that traders could get more precise fills for entries and exits.

One of the benefits of using 5-digit brokers is that it allows those who trade large sizes to take advantage of the minute pricing differences created by the 5th decimal to make some money. Scalpers and those who use high-frequency trading algorithms are the entities that are best served with pricing from 5-digit brokers.

Best 5-Digit Forex Brokers

  • IG - 9.7/10 Overall
  • Saxo Bank - 9.5/10 Overall
  • CMC Markets - 9.4/10 Overall
  • Interactive Brokers - 9.2/10 Overall
  • TD Ameritrade - 8.9/10 Overall
  • FOREX.com - 8.7/10 Overall
  • XTB - 8.7/10 Overall
  • City Index - 8.7/10 Overall
  • Swissquote - 8.5/10 Overall
Overall Rating
9.7 / 10
Minimum Deposit
£250.00
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard0.828 (September 2021)
All-in Cost EUR/USD - Active0.365 (May 2020)
PayPal (Deposit/Withdraw)Yes
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded1974
Publicly Traded (Listed)Yes
BankYes
Tier-1 Licenses7
Tier-2 Licenses2
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)19537
Forex Pairs (Total)100
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingYes
Charting - Indicators / Studies (Total)32
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
9.5 / 10
Minimum Deposit
$2,000
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard0.8 (August 2020)
All-in Cost EUR/USD - Active0.6 (August 2020)
PayPal (Deposit/Withdraw)No
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded1992
Publicly Traded (Listed)No
BankYes
Tier-1 Licenses6
Tier-2 Licenses1
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)40000
Forex Pairs (Total)182
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingYes
Charting - Indicators / Studies (Total)62
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
9.4 / 10
Minimum Deposit
$0
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard0.73 (August 2021)
All-in Cost EUR/USD - ActiveN/A
PayPal (Deposit/Withdraw)Yes
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded1989
Publicly Traded (Listed)Yes
BankNo
Tier-1 Licenses5
Tier-2 Licenses1
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)11927
Forex Pairs (Total)158
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingYes
Charting - Indicators / Studies (Total)86
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
9.2 / 10
Minimum Deposit
$0
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard0.6 (From 09/25/21 - 10/02/21)
All-in Cost EUR/USD - Active0.6 (From 09/25/21 - 10/02/21)
PayPal (Deposit/Withdraw)No
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)No
Regulationexpand_moreexpand_less
Year Founded1977
Publicly Traded (Listed)Yes
BankNo
Tier-1 Licenses8
Tier-2 Licenses1
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)7400
Forex Pairs (Total)91
BitcoinNo
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)No
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingNo
Charting - Indicators / Studies (Total)127
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
8.9 / 10
Minimum Deposit
$0
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard1.26 pips (August 2021)
All-in Cost EUR/USD - Active1.26 pips (August 2021)
PayPal (Deposit/Withdraw)No
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)No
Regulationexpand_moreexpand_less
Year Founded1955
Publicly Traded (Listed)Yes
BankYes
Tier-1 Licenses4
Tier-2 Licenses0
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)0
Forex Pairs (Total)73
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)No
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingNo
Charting - Indicators / Studies (Total)360
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
8.7 / 10
Minimum Deposit
$100
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard1.1 (US August 2021)
All-in Cost EUR/USD - Active1.1 (US August 2021)
PayPal (Deposit/Withdraw)Yes
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded1999
Publicly Traded (Listed)Yes
BankNo
Tier-1 Licenses4
Tier-2 Licenses1
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)5500
Forex Pairs (Total)91
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)Yes
Proprietary PlatformYes
Social Trading / Copy TradingNo
Charting - Indicators / Studies (Total)139
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
8.7 / 10
Minimum Deposit
$0
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard0.9 (Q3 2021)
All-in Cost EUR/USD - Active0.9 (Q3 2021)
PayPal (Deposit/Withdraw)Yes
Skrill (Deposit/Withdraw)Yes
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded2002
Publicly Traded (Listed)Yes
BankNo
Tier-1 Licenses1
Tier-2 Licenses3
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)10000
Forex Pairs (Total)49
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingYes
Charting - Indicators / Studies (Total)39
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
8.7 / 10
Minimum Deposit
£100.00
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard1.1 (August 2021)
All-in Cost EUR/USD - Active1.1 (August 2021)
PayPal (Deposit/Withdraw)Yes
Skrill (Deposit/Withdraw)No
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded1983
Publicly Traded (Listed)Yes
BankNo
Tier-1 Licenses3
Tier-2 Licenses1
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)12000
Forex Pairs (Total)84
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)No
Proprietary PlatformYes
Social Trading / Copy TradingYes
Charting - Indicators / Studies (Total)139
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Overall Rating
8.5 / 10
Minimum Deposit
$1000
Trust Score
Trust Score is a numerical rating (from 1 - 99) that represents a broker's overall trust.close
Highly Trusted
Cost & Fundingexpand_moreexpand_less
Average Spread EUR/USD - Standard-1
All-in Cost EUR/USD - Active-1
PayPal (Deposit/Withdraw)Yes
Skrill (Deposit/Withdraw)Yes
Visa/Mastercard (Credit/Debit)Yes
Regulationexpand_moreexpand_less
Year Founded1996
Publicly Traded (Listed)Yes
BankYes
Tier-1 Licenses4
Tier-2 Licenses1
Investment Optionsexpand_moreexpand_less
Forex TradingNo
Trading - Forex or CFDsYes
Tradeable Symbols (Total)466
Forex Pairs (Total)78
BitcoinYes
Trading Platformsexpand_moreexpand_less
Virtual Trading (Demo)Yes
MetaTrader 4 (MT4)Yes
MetaTrader 5 (MT5)Yes
Proprietary PlatformYes
Social Trading / Copy TradingYes
Charting - Indicators / Studies (Total)49
Apps & Toolsexpand_moreexpand_less
Android AppYes
Apple iOS AppYes
Has Education - Forex or CFDsYes
Daily Market CommentaryYes
Forex News (Top-Tier Sources)Yes
Economic CalendarYes


Price Movements on 5-Digit Broker Platforms

Many traders are confused as to how the pricing of currency pairs on 5-digit broker platforms translates into pip movements. You may also be wondering why the MT4 platform displays the profits or losses which are unrealized as a larger amount which is 10 times the actual value on the chart. It is important to understand how the price displays on 5-digit broker platforms work, especially when you will be setting stops and profit targets for your trades.

The first thing to get out of the way here is the points displayed on the bottom right corner of the chart. The reason why the MT4 will display a profit/loss which is ten times the actual price movement in pips is that the MT4 platform does not recognize fractional pip displays. What does this mean? This means that when it comes to 5-decimal pricing, the MT4 will not recognize a display such as 1.2952.2 because there is no such thing as two decimals in pricing. Rather, the MT4 will recognize that the last digit is a tenth fraction of the 4th digit and will display it as a round figure which is ten times the last digit. Therefore if you look at the snapshot below, you will see that for the two open trades, the total pip deficit for the active trades is actually -4.1 pips, but in the points display, it shows up as -41 pips: i.e. (-19 pips) + (– 22 pips) = -41pips.

It is important that the trader recognizes this so that errors are not made in setting stops. Whatever the profit or loss displayed in points is, simply divide it by 10 to get the actual pip value of the unrealized or realized profit/loss in the trade.

Similarly, you can use the same principle to determine price moves. So if on a 4-digit broker platform the price move from 1.4562 to 1.4567 is 5 pips, this will show up on a 5-digit broker platform as 1.45621 to 1.45671, or 50 pips. In the 5-digit pricing quote, any fraction from 0 to 9 may show up. So we will have a possibility of the 50-pip price move just described showing up as 1.45623 to 1.45673, 1.45624 to 1.45674, 1.45625 to 1.45675, etc. So even though the price movement shows up as a 50-pip move on a 5-digit broker platform, the movement in fact is just 5 pips.

Similarly, a price move of 54 pips on a 5-digit broker platform is actually 5.4 pips on a 4-digit platform and that is also the true value of the pip movement. So a 54-pip price move on a 5-digit broker platform is actually a move of 5.4 pips. Using the price move example just cited, a 54-pip move on a 5-digit platform is a move of 1.45623 to 1.45677, 1.45624 to 1.45678, etc.

Implications of Trading with 5-Digit Brokers

One of the first changes that traders had to bear with was that their robots and indicators coded on 4-digit broker platforms would no longer work on the 5-digit broker platforms. Any software coded with the MQL4 language using a 4-digit pricing system would have to be completely reconfigured. Fortunately, an army of programmers who can perform the reconfigurations has arisen. Therefore, any trader with software programmed for 4-decimal trading can get a programmer to reconfigure this software to perform 5-digit trading.

The 5-decimal pricing system also introduced some changes as to how brokers priced their assets. Prices are delivered from various price feeds and this has a bearing on the spreads that are offered by individual 5-digit brokers. Any trader who wants to start trading on the 5-digit broker platforms would have to carefully select the broker platforms to be used for this purpose. Furthermore, traders must be able to interpret the price movements and know the implications for profit and loss in their trades.

An aspect of 5-digit forex trading is the fact that it has made it possible to be able to use automated trading algorithms to get precise entries and exits, especially during news trades. It is possible for a trader to use high-frequency trading software to get specific targets for entry and exit. For instance, a trader may want to make $5,400 from a 5.4 pip movement, which displays 54 pips on the 5-digit broker platform. This will entail trading 100 lots of a currency with an entry of say, 1.56432 to 1.56476. Knowing that there are other traders around the world who may not have access to this software, this trader can with a high-frequency software, get an entry at 1.56432 and be able to sell off the position to another trader who the broker fills in at 1.56476, thus delivering the 5.4 pips target.

Conclusion

5-digit trading is now the norm in forex trading and using the information put up in this article, traders should be able to make better sense of what has hitherto been a mysterious price quotation system on their platforms.

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About the Author

Marcus Taylor

BrokerNotes was founded in 2014 by Marcus Taylor, founder and CEO of Venture Harbor, a venture studio in Oxford that develops innovative online tools & technology across a range of sectors.


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