The UK is one of the biggest and most advanced countries for forex brokers. About 43% of all forex trading in the world happens in this country. That’s more than $3 trillion worth of currencies traded every day. These big numbers make the UK a vital forex market. If you are living here, you may know of people engaged in forex. It can be your friend, family member, or workmate. But what makes forex trading popular in this country?
First, forex is the number one financial market in the world. With trillions of dollars worth of transactions daily, getting a small piece of that pie is big money! It will allow you to live the life of the rich and the famous. A lifestyle that we only see in movies and tabloids. Second, it is an open market that is available to everyone. There is no special education or diploma needed to start trading. Some brokers require as little as £5 to £100 initial deposit, which is affordable for most office workers and professionals. Third, the industry has strict regulations by the authorities. In the UK, this regulatory body is the Financial Conduct Authority or FCA. It gives traders additional security that their money is safe.
Now that we know why forex trading is popular in the UK, other questions come up. Do you need a broker to start trading forex? If yes, what do I look for in a broker? And who are the best forex brokers in the UK?
Forex is an over-the-counter market. There are no physical trading floors or exchanges where the currencies get swapped. It gets operated by a network of international banks in four markets composed of London, New York, Sydney, and Tokyo. Everything happens electronically. And the role of the brokers is to connect you to this network so you can participate in currency trading activities. UK forex brokers give you access to the market through a forex trading platform. But before we talk about the best forex broker in the UK, it is better to discuss first what to look for in a legit broker.
What do you look for in forex brokers in the UK?
Forex brokers serve as middlemen in trading currencies. They connect you to the global network of banks so you can place your trades in forex. Here we will discuss the factors to consider when choosing the best forex broker in the UK.
- Regulation. Without a doubt, the first thing you want is a guarantee that your money is safe with a broker. After all, this money is a product of your sweat and tears gained from years of hard work. The last thing you want is for a broker to run away with your cash. In this digital age, you are also careful with your personal information. No one wants to be a victim of identity theft. Regulators make sure that none of these things will happen to you if you are trading in forex.
In the UK, the Financial Conduct Authority, or FCA, is the authority that reviews and regulates brokers. The UK Parliament gave it powers. But the funding and operational costs are shouldered by the member-brokers. All brokers legally allowed to handle trading activities in the UK must be registered with the FCA. Look for the FCA registration number on the website of your preferred broker. You can also visit the FCA official website to check if the company is on the list of registered brokers.
- Fees or commissions. Brokers must earn a profit to stay in the game. They need a continuous flow of money to develop and keep their trading systems updated. They have employees to pay every month to manage client accounts, give 24-hour support, and provide updates on news and market trends. They also conduct training and develop educational courses as added benefits to their clients.
It is vital to know the fee structure of the brokers to avoid problems in the future. Some traders complain of excessive charges. Brokers make money from commissions for trading activities. Others charge based on spreads or the difference between buying and selling prices. Still, others make money from deposits and withdrawal fees. Before you sign up with any broker, make sure that you understand their fee structure. And that you agree to the terms and conditions of the trading contract.
- Trading platform. It is the lifeblood of forex trading. You will be spending most of your time here once you start with your trading activities. So, make sure that you are familiar with the trading platform and the features that come with it. Some brokers have developed their best trading platform for UK clients and the rest of the world. Others use MetaTrader 4 and 5. These two are the most popular trading platform anywhere.
Look for a trading platform that is simple and easy to navigate. It must be responsive and fast. The last thing you want is delays in placing your orders due to slow system performance. It will be a cost disadvantage to clients since currency values can rise and fall sharply in a matter of seconds. Take advantage of the demo accounts offered by most forex brokers in the UK. It will allow you to test the performance of the trading platforms. You can also check for reviews from the actual users of the platform to get the good and bad sides of the system. Also, choose the trading platform that supports multiple devices: web, desktop, and mobile.
- Customer service. Most traders take this for granted. They think that this is the least important criteria in choosing a forex broker. But this is one of the most vital features of a broker. As you navigate your way to the world of forex trading, you will experience problems along the way. Issues such as forgetting your login details, power interruptions, double charges on your credit card, or money transfer errors are all familiar to traders. And good customer support will provide you with the help you need, even with the most simple concerns.
As a rule of thumb, the customer service support team must be reachable any time of the day. They need to be accessible on different platforms like live chat, phone call, email, or call-back systems. To be effective, they also need to provide solutions fast. There is no point in waiting for 30 minutes on the phone only to be told that someone from technical support will call you back in 24 hours. But, if your preferred broker ticks all the right boxes, you can move on to the next item.
- Compatibility. Yes, compatibility does not only apply to human relationships. The values and offers of a broker must match your trading style and attitudes. For example, if you prefer to deposit small amounts of money every week, choose a broker that offers one-time deposit fees. Or find one that has zero fees. Scalpers that buy and sell several times a day for a small profit) should find a broker with tight spreads. It also helps to use a broker with no minimum time requirement for entering or exiting a trading position. Also, if you can only spare a limited number of hours in forex trading, consider a broker with automated systems or offer mobile alerts and updates.
What are the top forex brokers in the UK?
Now that we have established the features to look for in a forex broker, let us look at the best forex brokers in the UK.
- City Index. It is one of the oldest brokers in the UK, with over 35 years of experience in forex trading. City Index is regulated and authorized by the FCA in the UK. It is known globally in spread betting, forex, and CFD trading. City Index is part of StoneX Group Inc. A global financial services company with more than $5 billion in customer assets. It serves clients in more than 130 countries worldwide.
City Index has a wide range of currency pairings. It offers forex trading in 84 major, minor, and exotic pairs. It also sells a diverse selection of investment assets like indices, shares, and commodities. If you wish to expand your portfolio to other trading instruments, City Index can make this happen for you. In forex, it has the lowest spreads on major currency pairs like the EUR/USD at 0.5. It offers leverage of 1:30 for retail traders to comply with the guidelines from the FCA. The minimum deposit is only £100 that makes it accessible to beginners in forex trading.
This broker offers a custom-built trading platform that gets recognized by the industry as the best. It got the 2021 Best Platform for the Active Trader Award from ADVFN. And the 2021 Best Professional Trading Platform Awards from the OPWA. It is not surprising that City Index got these awards since their Web Trader platform is highly adaptable and has a simple design. It even has a search function that works wonders. Also, there are 90 technical indicators that you can use to make better trading decisions. This broker also has a mobile trading app that can be downloaded free from Google Play and Apple App stores. With this app, you can do trading in one swipe. Orders also get executed in seconds. For traders who are familiar with MetaTrader 4, it is a platform supported by this broker.
Customer support is available round-the-clock from Monday to Friday. You can choose to contact them through chat, phone, or email. But using email is not encouraged since it will take days to get a reply. As an alternative, you can connect through their social media channels. City Index has Facebook, Twitter, YouTube, and LinkedIn pages.
For beginners, this broker also has specialized training programs. It helps you get started in forex trading fast. For the advanced traders, there is a separate section for you. It has more complex strategies and techniques to improve your trading capabilities. Lessons are available in video, webinars, and text-based lectures.
- IG. It is a well-established trading company that has 47 years of experience. Since it started in 1974, they now have more than 239,000 clients all over the world. It gets regulated by the FCA, so your money is safe here. It has the highest share of forex trades in the UK, making it the number one broker in retail forex.
This broker offers diverse trading assets totaling more than 17,000, including indices, commodities, shares, and forex. Expanding your portfolio is a breeze with the wide selection of trading instruments. UK residents can trade forex tax-free and commission-free through IG. You don’t have to worry about capital gains tax or stamp duty. You can even gain tax credits for losses against profit. Another unique feature is the ability to trade on weekends. Yes, IG offers forex trading services on Saturdays and Sundays! The minimum deposit is £250 for UK-based traders.
IG has several trading platforms made to match the trading style of clients. It includes the L2 Dealer, ProRealTime, MetaTrader4, and IG’s exclusive platform. IG’s platforms are accessible using your web-based browser or a mobile app available for free from the Play Store. It integrates research-based tools such as news streaming, economic indicators, and signals. For people who don’t like apps, a progressive web app is available. With this platform, you can trade on any device without the need to download any third-party apps. ProRealTime is a premium platform for traders who have higher deposits. It is also free for clients who trade forex at least once a week. It can do advanced charting, use the latest monitoring tools, and present insider analyses.
Since IG has weekend trading activities, customer support is also available on weekends. It operates 24/7, round-the-clock, helpdesk. Another unique feature of this broker is the creation of the IG community. It is an online forum that lets other traders interact with other traders. In this group, they can discuss trends, strategies, and problems. They can also share ideas with their peers. If this is too complicated for you, contact them through email, phone, and a toll-free number. For bookworms, there is a knowledge database presented in FAQ format.
For new to intermediate traders, you can enjoy online classes from the IG Academy. It helps traders of all levels bring their trading skills to a higher level. There are even live sessions where you will meet your fellow trainees and the teachers. It also hosts seminars where experts share their forex trading know-how. After the sessions, there is a question-and-answer portion where all your questions get discussed in real-time.
- Pepperstone. It started in 2010 in Melbourne, Australia. Today, it serves more than 300,000 clients, with more than $12 billion trades every day. It is authorized to do trading activities around the world by regulators, including FCA in the UK. It is made with the client at the center by providing the best trading technology, low-cost spreads, and a desire to help.
Pepperstone has over 1,000 trading assets across forex, commodities, equities, indices, and cryptocurrencies. In forex, there are more than 60 currency pairs available. It represents major, minor, and exotic currencies. Leverage is one of the highest at 1:500. It is welcome for retail traders with limited funds, but it also increases the risk of losing your deposits and any profit you may have gained previously. You can choose from two account types. The standard account is designed for the beginner, while the Razor account is for advanced traders. With Pepperstone, you can trade for as low as £0, making it easy for beginners to start their forex trading journey.
This broker does not have an exclusive trading platform. Instead, it uses MetaTrader 4, MetaTrader 5, and cTrader. These are third-party platforms used by most traders in the world. So, those with trading experience will be happy that they do not have to learn a new trading system. Also, the MetaTrader 4 and 5 are available across devices which makes it convenient and hassle-free. You can place your trades by PC, tablet, or mobile phone. The cTrader is more advanced in features and added functionality. But it is also more expensive to use since it uses a commission-based scheme. In contrast, the MetaTrader 4 or 5 has a flat rate.
Aside from zero fees on deposits and withdrawals, Perpperstone also has rewards programs for current clients. It includes the Refer-A-Friend rewards and Active Trader program. With the Refer-A-Friend scheme, you will get a bonus when you invite a friend or relative to sign-up with this broker. The reward can be in the form of free trades or cash credits. For the Active Trader program, you will get volume-based discounts on commissions charged by Pepperstone. But you must be actively trading for the past three months to be eligible for this program.
Pepperstone provides top-class customer support, with clients praising their fast replies. Emails that take days to get an acknowledgment from other brokers will only take a few hours with Pepperstone. You can also choose from several channels of support like phone, chat, and social media apps. But these are only available on weekdays. Any concern during the weekend will have to wait for the next trading day.
If you are looking to improve your trading skills, Pepperstone has dozens of training materials available. It includes webinars, videos, tutorials, and text-based articles. You can also check out their YouTube channel for more trading-related content.
- eToro. It was born in 2007 and has since attracted over 20 million users. It is responsible for almost 350 million trades. It operates in more than 140 countries. In the UK, it gets regulated by the FCA. So it follows a strict standard for trading. eToro is best known for its CopyTrader technology. It lets you automatically copy the trades of other expert traders. Imagine using the same trading strategy as the best traders in the UK and the world! And with the 3 million active traders on the platform, you will never run out of professional traders to copy. This technology is perfect for beginners since you can start trading as soon as you open an account. Advanced traders who have been losing money in recent trades can also benefit from mirroring what successful traders do. And get back to profitability in no time.
You can trade in over 45 currency pairs representing major, minor, and exotic pairings. It follows the leverage cap from the FCA at 1:30. But for premium accounts with higher deposits, the leverage can go up to 1:400. It is both exciting and risky to use this leverage, especially for beginners. So, unless you are confident with your trading plan and strategies, stick to the 1:30 leverage cap. eToro accepts deposits for as low as $50. But, if you want to use CopyTrader, the minimum is $200. This broker only uses US dollars, so all deposits in GBP wi automatically get converted with corresponding fees.
eToro has a customized trading platform that gives access to the world of forex to ordinary traders. It has a user-friendly design that has no downtime. It is available on multiple devices through an app. You can download it for free use on your laptop, tablet, or mobile phone.
What is the best forex broker in the UK?
City Index is the best forex broker in the UK. It is one of the oldest and most trusted brokers in the country. It has the most number of currency pairs available and offers the lowest spread in the major currencies. Also, it has the best trading platform recognized by the industry.
Is forex trading legal in the UK?
Yes, forex trading is legal in the UK. It follows strict regulations from the Financial Conduct Authority or FCA. Ensure that you are dealing with a legit broker by checking with the FCA.
What is the best forex broker for beginners?
eToro is the best forex broker in the UK for beginners. It has the best forex trading platform in the UK that is easy to navigate and learn. eToro’s CopyTrader system allows new users to start trading after they sign up for an account. And this is while they are still learning the basics of forex.
How many forex brokers are there in the UK?
There are more than fifty forex brokers in the UK, but not all are legit. To ensure that your money and identity are protected, deal only with registered brokers with the FCA.