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Top Forex Brokers in UK for Forex Trading

Britain has a long and proud history of trade and currency exchange. Known as a nation of merchants, the Brits have always seen trade as a way to increase their wealth. And currencies are amongst the most traded and most sought after goods in the world. London has been hailed as the financial centre of the world, mostly due to its geo-strategic position and the historical circumstances.

The pound sterling is the oldest currency still in use and it is the fourth most traded currency in the world, after the US dollar, the Euro and the Japanese yen. It is also a popular reserve currency.

The pound’s value in respect to other currencies fluctuates frequently, and many individuals have gained a significant benefit from these fluctuations. Moreover, the UK has always been regarded as a country with quite liberal legislation and low-rate taxes on trade and investment. Therefore, it is not surprising that forex trading is quite popular with a large number of British citizens.

BrokerOfferDevicesReview
1st

Deposit: $5
Leverage: 888:1

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2nd

Deposit: $100
Leverage: 1:294

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3rd

Deposit: $50
Leverage: 1:1000

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4th

Deposit: $50
Leverage: 400:1

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5th

Deposit: $100
Leverage: 200:1

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6th

Deposit: $250
Leverage: 400:1

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Legal Framework and the FCA

Forex trading in the UK is in the domain of the Financial Conduct Authority(FCA), the successor of the Financial Services Authority (FSA). The FCA was founded in 2013 and it has an annual budget of over £450 million. The organisation is independent and it isn’t directly responsible to the UK government. Its budget is provided by the membership fees paid by companies which are in the financial services industry. The powers and the role of the FCA is substantial.

  • It regulates the marketing of financial products and services.
  • It can investigate individuals and companies, if there are any suspicions of fraudulent or illegal behaviour.
  • It can ban certain financial products, up to a full year, with the power to enact a permanent ban afterwards.
  • The FCA can also set the minimum requirements and standards for products and services.
  • It can also instruct companies to change their promotions and other offers if it finds that they are contradictory or misleading.

Due to the fact that the market is completely regulated and opening an online forex account is easy-peasy, the number of traders in the UK is growing by the minute. Still, the fact that the there is a lot of interest, has always been a magnet for shady characters and companies who try to attract possible traders and convince them that they are legitimate.

The FCA warns UK traders to be aware of unauthorised brokers and avoid such websites by all means. There are companies which offer forex trading and other types of online trading, often offering unrealistically high returns and even guaranteed profits. That alone should ring a bell, as there isn’t anyone who can guarantee that you will make a profit. If you see such a ‘guarantee’, you can practically be certain that the website isn’t legitimate.

Forex brokers that are based in the UK have to be authorised by the FCA. But, there are quite a few websites which claim to be based in the UK, and even provide a UK address, usually a posh London postcode to make it seem like they’re based in the City of London. The reality is that many of those companies have nothing to do with the UK and aren’t actually registered at the address that they claim to be.

Such companies often offer better exchange rates than most of their competitors and many customers initially make some hefty profits. But afterwards, they experience unpleasant things, like account suspension and closure and by the time they want to complain and address the issue, they realise that the company wasn’t even legally allowed to offer forex trading in the first place.

By then it is usually too late. The FCA makes attempts to identify and then prevent such websites from offering trading services to UK citizens. In many cases the fraudsters will use the name and the registration number of actual certified brokers in an attempt to convince potential traders. If you suspect anything contact the FCA immediately. That is the first step for every UK trader before they start trading forex – make sure that the company is registered with the FCA.

Forex Trading Offer

Checking the legal status of the forex broker is the essential and the very first thing that you should do when choosing a broker, but definitely not the only one. There are few other things that you should take into consideration, especially regarding the trading offer.

  • Currency pairs
  • Leverage
  • Spread

The more currency pairs a broker offers, the better. Even if you plan on sticking to the major currency pairs, or restrict yourself to pairs which include the UK pound, it is still good to have a choice if you decide to, so to say, broaden your trading horizons.

Some forex traders offer more than 30, and sometimes even up to 60 different currency pairs, which means that it would be hard to find a pair of currencies that are even remotely important that aren’t traded. Typically, better spreads are offered on major currencies as they are the most traded ones, but if you think you know and understand the movements of less influential currencies you can make a solid profit.

Unlike some other countries, most notably the US, where there is a limit on the leverage that the brokers can offer, in the UK, forex traders are allowed to offer pretty high leverage and for some pairs it can even reach 1000:1. This will allow you to trade amounts worth up to £100,000, with an initial capital of just £100.

Higher leverage allows you to increase your profits significantly, but you also may suffer severe losses. Make sure that you understand how leverage works and always be prepared to act quickly in order to prevent further losses if you see that things aren’t working out well. Remember that you can, but you don’t have to use high leverage rates when you’re trading.

Most forex brokers, or at least the ones that want to stay competitive and attract as many traders as possible don’t charge any fees or commissions on trade deals. Instead, they earn their profit through the spread, which, as you probably know is the difference between the buying and the selling price for a particular pair.

A tighter spread means that there is a bigger opportunity for traders to earn more money and minimise their losses. Leading forex brokers offer quite competitive spreads, as they are aware that traders can compare the spreads that are offered by different websites and always choose the ones that offer more competitive ones. As a trader, you are not prohibited from having accounts at more than one forex broker, therefore you can trade one currency pair with one broker and another with someone else, depending on the spreads that they offer.

Other Important Aspects

In addition to the most important aspects which include the licencing, as well as the specifics of the trading offer, there are other things which every trader should consider before choosing the most suitable UK forex broker. These things may seem unimportant, and perhaps they are less important compared to the offered pairs and the licence which are quintessential, but the following are also significant.

  • Trading platforms
  • Bonuses
  • Payment methods
  • Customer support
  • Learning resources

Most brokers offer more than one trading platform. In addition to being able to trade on your mobile device, you may also have access to an advanced platform which includes more interesting trade features and options aimed at more experienced traders.

Many brokers offer a No Deposit, or a First Deposit Bonus to all new players, and some have few more regular bonuses which can be highly beneficial.

A confirmed FCA authorisation is a sign that the broker offers secure financial transactions, but there are differences in terms of the number of accepted methods and the speed at which the transactions are processed. Some brokers charge fees on deposits made via some of the accepted methods.

Traders want to know that should any problems arise they will be able to get all the necessary help and assistance. Customer support is usually provided via phone, email and live chat.

Last but not least, most reliable and respected brokers give you an opportunity to learn more and get better and trading, via a range of learning materials, including videos, e-books, webinars and other useful tools.

FAQ


1. What body is in charge of regulating forex trading in the UK?

The Financial Conduct Authority is in charge of regulating various branches of the financial industry, including retail forex trading. This independent body has an official remit and a range of tools at its disposal.

2. Am I only allowed to trade major pairs, or pairs that include the UK pound?

No, you are also able to trade a vast range of other currency pairs, even so called exotic currency pairs which don’t include any of the major or influential currencies.

3. Is there a limit on the leverage that brokers can offer?

Unlike the US market, where there are restrictions on the leverage, UK brokers offer trading at pretty high levels of leverage, often up to 1000:1.

4. Do UK forex brokers charge any trading fees?

Most, if not all, reliable UK forex brokers don’t charge any fees on forex trading, they make their profits through the spread.

5. What are the forex trading market hours for UK brokers?

The trading market hours depend on the currency pairs that you want to trade. Different markets open and close during different hours of the day. You will have at least a few trading options at any time of the day, during working days. The markets are closed on Saturdays and Sundays.