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The UK is a financial global hub, currently the globes 5thlargest economy and the leading exporter of financial services to the rest of the world. Thats due to a combination of reasons, including its central location, its convenient time-zone and its relatively loose regulation, plus generous tax laws.
In terms of Forex, the UK is home to some of the most outstanding brokers, known for their quality, transparency and reliability. The below list details some of the very best Forex brokers based in the UK.
The brokers below represent the bestUK Forex Brokers
cTrader, Currenex, eToro Platform, Keystone, Marketspulse, Mirror Trader, MT4, MT5, Tradologic, Zulutrade
Most of these brokers offer free demo accounts so you can test the brokers and their platforms with virtual money. Give it a try with some play money before using your own cash.
Heres a list of Best UK Forex Brokers
How to Choose a Forex Broker (as a UK trader)
Not all Forex brokers accept US clients. For your convenience we specified those that accept US Forex traders as clients.
Regulated By:BaFin, CNMV in Spain, CySEC, FCA, IFSC
Headquarters:Level 34, One Canada Square, Canary Wharf, E14 5AA, London, United Kingdom
XTB is an award-winning CFD platform that supports Forex, indices, commodities, stock CFDs, ETF CFDs, and cryptocurrencies. For Forex, XTB supports 48 currency pairs with low-cost spreads. Customers of XTB can choose between trading on the xStation 5 or MT4 platforms. For leverage accounts, this brokerage offers leverage of up to 200:1.
XTB was founded in 2002 with a headquarters in Warsaw. It is regulated in markets across Europe by the IFSC, FCA, KNF, and CySec. XTB has a free demo account and a Trading Academy set of courses for beginner and intermediate traders. Check out our fullXTB reviewhere.
Choose between two excellent trading platforms (xStation 5 or MT4 platforms)
A collection of 3000+ trading instruments across six asset classes
Headquarters:Building 25, MATAM, Haifa, Israel
76.4% of retail CFD accounts lose moneyPlus500 ReviewMORE
Plus500 is a leading CFD trading platform with support for stocks, indices, cryptocurrencies, and Forex. This commission-free brokerage charges very low spread-rates and offers fast trades on a great platform. Plus500 supports complex trades, includes negative balance protection, and makes trading an educational and hopefully profitable venture.
You can start with a free demo account to test the platform and any trading strategy. Real money accounts offer leverage of up to 1:30. This broker is based in Israel and regulated by the Financial Conduct Authority (FCA) in the UK. Check out our fullPlus500 reviewhere.
Headquarters:FXTM Tower, 35 Lamprou Konstantara, Kato Polemidia, 4156, Limassol, Cyprus
90% of retail CFD accounts lose moneyFXTM ReviewMORE
FXTMis an ECN/STP broker thatwas established in 2011 to offer Forex and CFDs and is highly regulated in the UK by the FCA among other regions. They offer the trading of over 250 assets through the MT4 and MT5 platforms.
MT4 is available through WebTrader, download client or mobile. The ECN Zero and ECN accounts on FXTM are operated with MT4 bridge software. Therefore, the same MT4 features are available to traders with these accounts as well as the regular accounts. Fxtm standard accounts are all traded exclusively on the MT4
Headquarters:1 Fore Street, EC2Y 9DT, London, United Kingdom
Tickmill is a brokerage business that was established in 2014, to offer traders the opportunity to trade FX and Contracts-for-Difference assets on an online platform.The Tickmill brand is owned and operated by three subsidiary companies known as Tickmill Ltd (Seychelles), Tickmill Europe Ltd (EU) and Tickmill UK Ltd (United Kingdom).
Tickmill offers various deposit options, all of which are based on fiat currency. Cryptocurrency-based deposits are not supported.
Headquarters:1 Thomas More Square London E1W 1YN United Kingdom
ActivTrades is an online forex and CFDsbrokerthat was established in 2001.They were originally based in Switzerland but later relocated to London in 2005. As a UK based financial services provider, they are authorized and regulated by the UKs Financial Conduct Authority (FRN 434413)
Headquarters:Kanika International Business Center 7th Floor, 4 Profiti Ilia Street Germasogeia, Limassol, Cyprus
75% of retail CFD investors lose moneyeToro ReviewMORE
Headquarters:13-14 Basinghall str., City of London, EC2V 5BQ, UK
FxPro is an international forex and CFDs broker, founded in 2006, that serves clients from more than 150 different countries around the world. This broker offers several different kinds of asset classes covering more than 200 different types of assets.
FxPro is a forex and CFDs broker that was established in 2006. To better serve its international clientele base, FxPro has established offices in major cities around the world. With its quality 24/5 customer support service, traders at FxPro can be assured that all their trading needs will be catered to by this broker. The broker offers both true ECN (non dealing desk) and dealing desk access a the trader prefers.
Superb selection of platforms including cTrader, MT4 and MT5
No dealing desk execution means no conflict of interest with client
Wide selection of assets across 6 instrument classes
How to Choose a Forex Broker (as a UK trader)
Ever since the global financial crisis in 2008, the number of new forex brokers joining the industry has plummeted tremendously. In addition, we also see a large number of brokers exiting the industry entirely. In a highly competitive industry such as the online forex trading industry, only the strongest get to survive. While this means that only the established brokers stick around to offer their services, you still need to do all the due diligence to ensure that the forex broker that you partner up with is the right broker for you. In this case we have conducted all the due diligence on your behalf.
But heres what you do need to think about, what kind of a trader are you? First you need to establish your trading needs.
To find the best forex broker that will meet these needs will require some research. Since there are hundreds of brokers on the internet that are trying to compete for your custom, there will definitely be plenty of choice. Nevertheless, these brokers must comply with a certain set of criteria before they can even be considered. First of all, you need to ensure that the broker can be trusted to handle your money. In addition, you also want a broker that can provide you with a reliable trading platform to trade with. Of course, there are also other factors that you look at such as the trading cost in terms of commissions and spreads, as well as account types available, customer support and other value added services.
The online forex trading industry operates on a global basis on theOver The Counter(OTC) market. The OTC market is largely unregulated hence leaving the field wide open for scam brokers to try and scam unsuspecting traders. Nevertheless, you can protect yourself by trading only with regulated brokers. Regulated brokers unlike their unregulated peers, operate within the strict confines of the regulations imposed by the regulatory authorities. These regulated brokers are usually based in major financial centers around the world such as London, Singapore, Hong Kong, Tokyo and New York.
Because forex brokers are operating in different jurisdictions, the regulatory requirements of each broker are different. Nevertheless, there are certain requirements which are considered the industry standard and are followed by regulatory authorities from all over the world. An example of this is the need for the broker to keep segregated accounts for their clients funds and the brokers operational funds. Another standard requirement among regulated forex brokers in the industry is the need to maintain a specific level of liquidity to ensure that the broker has enough liquidity to meet their contractual obligations.
For a UK based trader, the best option is to look for brokers which are regulated by the UK regulatory authorities. In the UK, the relevant financial authority for the forex trading industry is the Financial Conduct Authority (FCA). The FCA is an independent body from the UKs government. It is financed by the membership fees collected from the members that it has oversight over.
Brokers under the FCAs jurisdiction are required to show a minimum of 1 million in operating capital and this number increases as the number of traders increases. In addition, FCA regulated brokers are required:
To process all withdrawal requests instantaneously
To submit yearly audited reports to the FCA for scrutiny
To submit periodic financial statements of capital holdings to ensure that the broker is in compliance of its capital adequacy ratio.
By trading with a regulated broker under the FCA, you also have the benefit of protection of your trading funds under the FSCS (Financial Services Compensation Scheme). All FCA regulated firms are required to be a member of the FSCS. The aim of this scheme is to compensate traders of the loss of the money in the event the broker runs into insolvency issues. Under the FSCS, traders are guaranteed protection up to a maximum amount of 50,000. In the event of liquidation, traders will receive 100% of their money up to 30,000. Above 30,000, they will get to receive a maximum of 90%.
Apart from regulatory oversight, another important factor that needs to be carefully evaluated is the choice of trading platform that the broker has provided. Most brokers usually provide their traders with a selection in order to cater to the different categories of traders in the online trading community. These platforms are usually in the form of a desktop application, web based platform or a mobile trading app. The platforms may also be proprietary (built by the firm itself or for the firm) or provided by a third party trading solutions provider such as MetaQuotes Software, the developer of the popular MetaTrader 4 platform.
What you want to verify with a brokers trading platform are:
The next thing that you need to be concerned about is the trading cost. This can take the form of commission charges or spreads or a combination of both.
Most forex brokers in the industry do not charge commissions on the trades that they execute unlike in the equity market. Instead, traders are required to pay a small spread in lieu of the absence of commission charges. The spread is just the difference between the BID and ASK price. Depending on the currency pair, it is usually less than 5 pips for the most frequently traded currency pairs. With spreads, you want to know if the broker offer fixed or variable spreads. With fixed spreads, the spread doesnt change according to the market conditions. Variable spreads on the other hand is dependent upon the market conditions.
Some brokers operate with a Non Dealing Desk (NDD) business model. With this business model, the broker simply relays your orders to the interbank market where it will be matched. For this service, the broker usually charges a commission on top of the spreads that you pay on the interbank market. Usually the commission is based on a small percentage of the trading volume.
In addition to trading costs, check how much leverage is the broker offering. The leverage ratio is simply the amount of capital which you can borrow from the broker to increase your market position. For example if a broker is offering a leverage ratio of 1:500, this mean for every pound in your trading account, you can increase your investment by a factor of 500. In other words, it is possible to hold a market position worth 50,000 with just 100. Take note that while it is possible to increase your profit potential with leverage trading, the risk of losing more than what you invested also increases when you use leverage.
The types of trading accounts that are available vary from broker to broker. Brokers who are beginner friendly and cater to small time traders often provide their traders with micro and mini trading accounts. These accounts allow traders to trade in amounts that are smaller than a standard trading lot. A standard lot is equivalent to a market position of 100,000 units of currency.
With a micro account, you can trade in a lot size as small as 1000 units of currency.
A mini account lets you trade in a lot size of 10,000 units of currency.
In addition, different types of trading accounts have different benefits and privileges. The higher ranking is the trading account, the more privileges will the account holder be entitled to.
The type of trading account that traders can open is also dictated by the minimum initial deposit. The Mini account is the lowest grade trading and often requires only a small initial minimum investment which is usually 250. At the other end of the scale, we have the Premium or VIP trading account which usually requires a substantial amount of minimum initial deposit and can run into tens of thousands of pounds.
While it is easy to get distracted by all the bells and whistles offered by a broker, you should never neglect to check out their customer support services. This is because of the fact that no matter how experienced you are as a trader, there will always come a time when you will need the assistance of the customer support team. When that time comes, you want to be able to get in touch with the support team without any hassles.
Hence, check what are the methods that the broker has made available for communicating with the support team. If a brokers customer support team is difficult to reach or to get in touch with, you might want to rethink about your choice of broker and save yourself a lot of frustration at the end of the day.
In addition, take note of the hours that the support services are available. Remember that the forex market is a 24 hours market and it doesnt operate within the confines of normal office hours. Hence, if the support services are only available during office hours, you might find yourself regretting your broker choice when you really require the assistance of the support team to resolve your problem.
There are some brokers who offer additional value added services in order to differentiate themselves from other brokers in the industry. These additional value added can be the provision of a free trading signals service or free VPN service. Other valued added services that can be taken into consideration include comprehensive trading education and robot trading services. While some of these additional value added services might be nice to have, it is important to remember that they should only be taken into account after evaluating the basic services provided by the broker.
Regardless of how experienced or capable a trader might be in spotting profitable opportunities in the market, he is only as good as the broker that he is using. If a broker is unwilling to cooperate and provide the kind of services that the trader needs to capitalize on the trading opportunities, then it might be better for the trader to just keep his money in the bank. The forex market doesnt have any clear rules or precedent on how it will behave and this creates a good opportunity for those who are skilled in analyzing the market to score a profit.
But we mustnt forget that a huge part of the traders success comes from the broker that provides him with all the tools to make a proper analysis and the platform to carry out the trade. If either of these is missing, then the trader will find himself tremendously handicapped. To help our readers avoid any of this unpleasantness, we have carefully screened some of the leading forex brokers in the industry and prepared a selection of the best UK forex brokers for you to choose from. These UK forex brokers are selected based on meeting all the above mentioned criteria that we have discussed about earlier in this guide.
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