How to Choose a Forex Broker In the UK?
Choosing the right forex broker is imperative for a successful forex trading journey. As the forex market is full of legit and dishonest brokers, therefore you have to remain vigilant while selecting a forex broker. Let us share some tips that you can follow to find the best forex broker in the UK.
1) Select a reputable forex broker
Before you decide to open an account with a broker, make sure that the broker has a good reputation. You can read online customer reviews and testimonials about the broker. Checking the broker’s credibility using independent rating websites, such as Trustpilot and ForexPeaceArmy.com can also help.
2) Choose a well-established forex broker
Opening an account with a new forex broker can be risky. Besides security issues, you don’t know whether the new broker is competitive or not. A broker facing liquidation issues might not survive more than a few years. Therefore, always open an account with a broker that has been in business for at least three years or more.
3) Choose a regulated broker
Regulation is one of the most crucial factors to consider while opening an account with a broker. A regulated broker offers an increased sense of security and maintains enough funds to ensure liquidity. The Financial Conduct Authority (FCA) is the main regulatory body in the United Kingdom that oversees forex brokers and other financial intermediaries. Other regulatory bodies in the country include;
- UK Financial Services Authority – (FSA UK)
- The Prudential Regulation Authority – (PRA)
- Financial Services Compensation Fund – (FSCS)
4) Deposit & Withdrawal
Checking the lead time and steps involved in deposit and withdrawal requests is also imperative while choosing a broker. Some brokers claim to offer fast deposit and withdrawal processes but may charge additional fees to facilitate. Also, you may come across a broker who has an instant deposit facility available but delays the withdrawal requests. Truthfully, there is no use in making profits if you can’t withdraw them on time. Therefore, always check if your broker offers real-time access to your funds at a minimal cost.
5) International Presence
A broker needs to pass through various regulatory and security checks before starting its operations in jurisdictions other than its home country. The international presence of a broker shows that the broker is competitive enough to operate worldwide.
6) Customer Support
Customer support has always been a hotspot to test a broker’s competency and professionalism. A broker who is incapable of providing real-time customer support can also make you suffer in other matters, such as account opening, deposits, and withdrawal, etc. Above all, a good forex broker offers multilingual customer support and is always accessible in the local language.
Some best forex brokers in the UK
Given below forex brokers hold multiple regulations from different regulatory bodies in the UK, including the Financial Conduct Authority (FCA).
- Interactive Brokers: Enables clients to access interbank forex quotes directly and operates in line with the ECN model.
- FXCM: NYSE Listed (Non-dealing desk broker)
- FOREX.com: Pioneer in introducing retail trading in currency markets
- OANDA – offers competitive spreads along with user-friendly trading platforms
- City Index: Offers advanced risk management tools
- London Capital Markets: LCG is undoubtedly one of the most popular forex brokers in the UK.
Factors that we considered while selecting the best forex brokers in the United Kingdom
Given below are a few points that we analyzed while selecting the best forex brokers in the UK:
1) Checked Brokers Reputation
We selected brokers with an overall positive reputation on major rating websites and review forums. We read customer reviews on popular platforms, such as Quora and Reddit. After critically analyzing clients’ feedback and ratings, we selected brokers with excellent reliability scores.
2) Checked Regulation
In a bid to confirm the regulation of brokers, we used the company’s registration numbers from their official pages and then verified them with relevant regulators such as FCA, FSA, and Companies House etc.
3) Tested Deposit and Withdrawal Processes
To test the broker’s efficiency in regards to the deposit and withdrawal process, we tested each broker individually. We made some deposits and then placed withdrawal requests after a while and found no issues. The best part is that these brokers do not have minimum funds withdrawal restrictions.
4) Checked Demo Accounts Availability
Demo accounts enable traders to learn and improve their trading skills without fear of losses. The availability of a demo account is crucial for building the confidence that is needed to go live. We checked and confirmed that demo accounts were available with all the brokers appearing in the list of our best forex brokers in the UK.
5) Available Features
A good forex broker offers all the necessary features and tools required for a successful trading experience. Hence, we signed up with each broker and tested different services and features, including trading cost, risk management tools, tradable assets portfolio, and payment methods. We found all the available services and features to be satisfactory.
6) Trading Platforms
A user-friendly trading platform makes it easier for clients to trade effectively. We tested how easy it is to use the trading interface of the brokers listed above. We found that the trading platforms that these brokers offer were not only intuitive but had all tools available to help you trade successfully.
7) Mobile trading platforms
The above-listed brokers offer advanced mobile trading apps to facilitate on-the-go traders. The mobile trading apps support both android and IOS-based mobile phones & tablets and are readily available to download from Google and Apple stores.
8) Effective customer support
We also checked how competent these brokers were in terms of customer support. We asked multiple queries and raised several complaints. Honestly, we were impressed with the level of services we received consequently. The brokers not only answered our questions timely but resolved our complaints in a short period of time.
Forex Brokers in UK – FAQs
Is forex trading legal in the UK?
Yes, forex trading is legal in the UK. The country is actually a financial hub of forex trading.
Do forex traders pay tax in the UK?
Yes, traders need to pay taxes on their forex earnings in the UK. However, there is no tax on spread betting. According to the UK tax laws, forex traders need to pay 20% capital gains tax (CGT) on earnings exceeding the threshold income of £50,000.
Who regulates forex trading in the UK?
The Financial Conduct Authority is the prime regulatory body in the UK. Several other regulatory bodies that exercise controls on forex trading include FSA, PRA, and FSCS.
How many forex traders are there in the UK?
As per the stats published at brokernotes.com, there are nearly 280,000 forex traders in the UK.
Can UK residents sign up with a forex broker from abroad?
Yes, they can. However, before accepting clients from the country or abroad, brokers need to seek authorization from the FCA and other concerned regulatory bodies.
As compared to other jurisdictions of the world, forex trading is quite popular in the UK. Besides regulatory protection and tax incentives on spread betting, traders can find a wide range of competitive brokers in the country. While compiling our list of best forex brokers in the UK, we took all the necessary precautions and selected the ones with the highest credibility.