Does Charles Schwab Offer Forex Trading?
Yes, Schwab now offers forex trading. Let’s check it out.
Charles Schwab Forex Availability
Accounts that have transitioned to Schwab from TD Ameritrade can trade forex right now. Accounts opened through Schwab can trade currencies starting in early 2024. Available currency pairs include the majors with the U.S. dollar and some exotics that don’t have the U.S. dollar in the pair. Here are a few examples:
USD/CAD
EUR/USD
NOK/JPY
GBP/AUD
ZAR/JPY
USD/PLN
In total, there are about 80 pairs available for trading.
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Charles Schwab Forex Lot Size
The minimum lot size at Schwab is 10,000 units of the base currency, which is the first currency in the pair (for example, in the pair EUR/USD, the Euro is the base currency). Every trade must be placed in multiples of 10,000 units. For instance, a trade can be placed in either 10,000 or 20,000 units, but not 14,000 units. thinkorswim will create an alert if a multiple of 10,000 is not used.
Learning to Trade Forex on Schwab
Accounts of both origins (Schwab and TD Ameritrade) can log into thinkorswim and practice trading forex using the platform’s demo mode, which Schwab calls paperMoney. This is a great opportunity to learn the software and get a feel of how currency trading works on the platform.
All three thinkorswim platforms (web, mobile, and desktop) offer currency trading. Schwab’s other platforms, including the website, main mobile app, and thinkorswim platforms, do not have forex capability.
Researching Forex
Schwab offers a few educational resources for currency traders. We do emphasize “few” because the lineup is rather small. On the website, there is a forex hub that can be accessed by going into the Learn tab at the top and clicking on the forex link.
On the thinkorswim platforms, there are news articles that relate, one way or another, to currencies. On the mobile app, there is a pre-installed forex watchlist under the Watchlist tab. We found about 80 currency pairs here. Tapping on an entry generates the currency pair’s profile. News articles can be accessed by tapping on the News tab that appears in the middle of the profile. The news articles we found were from Dow Jones Newswires and were very recent publications.
The same news articles can be found on the other two platforms. The process is the same on the website platform: go to the pair’s profile and find the section on news. On the desktop platform, you’ll need to add a Live News window to the left-hand column. This can be accomplished by clicking on the plus sign (+) in the bottom left and then selecting the link for Live News. In the symbol box, enter the currency pair you’re interested in.
The desktop version of thinkorswim also has a currency map. This is a list of major currency pairs around the world. The exact pairs can be changed by selecting the base currency from a drop-down menu. Clicking on an entry in this box fills thinkorswim’s order ticket.
The desktop program has one more area for forex education. Under the Education tab, it’s possible to search by keyword. Forex is obviously a good choice here.
Charting Forex on Charles Schwab
A currency pair can be charted just like a stock or ETF. To add a forex pair to a chart, simply click on an entry on a watchlist. Alternatively, you can enter the pair in the search field at the top of any thinkorswim platform. Some currency pairs may not have the same length of price history as Blue Chip stocks, although some may. For the EUR/USD pair, we found price action back to 1999.
All of the charting tools available on thinkorswim for securities can be used on a currency chart. These gizmos include drawing tools, indicators, plot styles, and patterns. There are many pre-installed timeframes that can be selected at will.
Not surprisingly, the best charting experience will be found on the desktop version of thinkorswim.
Trading Forex on Charles Schwab
Trading forex follows a similar routine as trading securities and futures contracts, although there are some differences. For example, stop-limit orders are not available for currency pairs.
A forex trade can be entered in one of several ways. A chart has a right-click menu, and here there are buy and sell links. Two other buy and sell links have advanced orders. Selecting one of the advanced orders will populate the trade ticket that sits beneath a graph. All sorts of fields can be manipulated here, including quantity and duration.
Under the Trade tab on the desktop system, there are several sub-tabs, one of which is Forex Trader. As the title suggests, this one is designed for currency trading, although the other sub-tabs can be used for forex trading as well. Of interest is a Pairs Trader tab that permits two currency pairs to be traded at one time.
The Futures and Forex Trader sub-tabs have dealing boxes with big buy and sell buttons (in green and red, respectively). Clicking on either button populates the same order ticket at the bottom of the screen. Each symbol in each dealing box can be changed, and the layout can be saved for later use.
The Active Trader sub-tab has a somewhat different trading layout. Instead of dealing boxes, there are two charts stacked on top of each other. To the right, each chart has a price ladder for the currency pair. Simply click on a bid or ask price to populate the ticket. There are buy and sell buttons at the top of the ladder for yet another method to enter a forex trade.
Charles Schwab Forex Pricing and Minimums
There is no account minimum to start trading currencies at Schwab. The brokerage firm charges no commissions on currency trades. There is a bid-ask spread on currency pairs, and this spread compensates Schwab for its broking service. On average, the spread is about 1 pip, which is 0.0001. On thinkorswim, 6 decimal places are used, so the price difference should be described as 10 pipettes (0.00010).
The exact spread displayed on thinkorswim will depend on the pair traded, of course. Here are some spreads we found on popular currency pairs:
| Pair | Bid | Ask |
|---|
| USD/JPY | 150.400 | 150.414 |
| EUR/USD | 1.05554 | 1.05562 |
| USD/CHF | 0.89910 | 0.89921 |
| GBP/USD | 1.21303 | 1.21313 |
Charles Schwab Forex Trading Judgment
Schwab has a good forex-trading service. Its biggest weakness is the limited selection of forex research and education, which means both experienced traders and beginners will probably need to do some investigation elsewhere on the Web. Although thinkorswim is a very capable platform, there is no dedicated currency platform at Schwab, and this absence may cause some traders to look elsewhere. Despite these weaknesses, there are some tight spreads on many currency pairs, so forex traders can find a good value here.
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