If you are looking to find a reputable forex broker in the UK, it is worth investing some time finding the best one for your needs. We’re here to help and have provided you with a list of the best brokers in the UK to help narrow your search. Forex trading, or foreign exchange trading, is one of the most actively traded markets in the world. Regulations have come into place that directly impacted what margin conditions regulated brokers can now offer. As a result, brokers are offering smaller spreads to attract new clients. If you are a newcomer to forex trading, we can help get you started with opening an account in the UK. Our guide will also explain how to trade forex in the UK and some of the forex regulations in the UK to be aware of.
Risk Warning: Trading financial products on margin carries a high degree of risk and is not suitable for all investors. Losses can exceed the initial investment. Please ensure you fully understand the risks and take appropriate care to manage your risk.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
78.8% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Trading CFDs involves substantial risk of loss and may not be suitable for all investors. Trading such high-risk financial contracts may result in the loss of all the client's invested capital. 77.7% of retail investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. UK: 68.61%, EU: 77.99% of retail investor accounts lose money when spread betting or trading CFDs with OvalX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money.
RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail investor accounts lose money when trading derivatives with this provider. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high degree of risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can result in losses larger than your initial stake or deposit.
XM Broker Review
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Unfortunately, there are bad actors in the forex brokerage community. These unscrupulous brokers often set up shop in the UK or solicit UK customers without the proper licences and credentials. They appear legitimate to the untrained eye and proclaim features and bonuses that do not comply with local regulations.
How does one avoid these bad actors? The best advice is to rely upon experts in the forex arena, such as Wecomparebrokers.com. We conduct reviews of the brokerage industry and produce lists of the very best forex brokers in the UK. We also have a unique comparison tool that can compare two brokers side by side, based upon the various features, products, trading platforms and fees offered by each.
The Financial Conduct Authority (FCA) is the regulatory watchdog with oversight responsibility for the forex industry. The FCA is your friend. Its mission is to protect and educate the estimated 280,000 online forex traders in the UK and to police the brokerage community. The FCA sends out warnings and compiles lists of bad actors in the forex field on a regular basis. It is always wise to check with the FCA about any potential broker that you may want to choose as a partner.
When choosing a forex broker in the UK, beginner and veteran traders need to be wary of any unsolicited marketing ads that appear too good to be true or offer far more bonuses or leverage than is legally possible in the UK. In the past few years, major regulators around the globe have had to come down hard on unfair marketing practices, binary options when loss rates exceeded 90%, and exorbitant levels of leverage.
Unregulated virtual and foreign-based forex brokerage houses, however, still proliferate in the forex community. Regulators can only police their respective jurisdictions or warn consumers of threats from firms that operate outside of the law on the fringes of the forex universe. Always rely upon your local regulator’s guidance and remember that Wecomparebrokers.com is here to help you with the difficult task of choosing the best online forex broker in the UK.
Forex trading in the UK is legal, but it is highly recommended that the trader use a forex broker registered and licensed by the FCA. The temptation to use an unregulated offshore broker is often too great to pass up, as bonus programmes are higher and leverage levels are greatly enhanced. If you trade with one of these firms, you are at high risk and will not be covered by any UK compensation scheme in case the foreign forex broker is fraudulent.
Global forex brokers are required by law to verify your identity upon sign up. The term for these rules is Know Your Customer (KYC) legislation. It was enacted to comply with various global anti-money laundering and anti-terrorism statutes. Proof of identity can be a national ID card, passport or driver’s licence. Proof of address can be either a copy of a utility bill or bank statement.
Once these documents are submitted, the approval process can move swiftly unless the broker needs more information. You will typically find a ‘Get Started’ button prominently displayed on the broker’s website to start the account-opening process. Many brokers will permit your use of their demo system while you wait for formal approval. Practice time at this stage can be invaluable in determining if the broker’s trading platform is the right one for you.
Once your account has been approved, the next step will be to deposit funds into your account. Brokers have endeavoured to make this process easy by offering a multitude of local payment methods to supplement the standard wire transfer or basic credit card transaction. Brokers usually do not charge for making a deposit, but your banking service may charge significant fees. Review the fee schedules to determine which payment method works best for you.
Finding a regulated forex broker in the UK follows any other typical decision-making process. Wecomparebrokers.com makes it easy for you by providing a list of the top UK forex brokers to help you in your search. The next steps to consider are:
Step 1: Define your needs for a broker – i.e., regulated, size, segregation of client deposits, type of platform, low fees and spreads, minimum deposit needed, training materials, demo trading system, currency trading pairs offered, product offerings and award recognition.
Step 2: Look at the broker’s historical performance.
Step 3: Read the small print as there may be additional clauses or payments you need to be aware of before you start trading.
Step 4: Gather information about online forex brokers in the UK.
Step 5: Identify a group of three to five alternative brokers that match your needs.
Step 6: Evaluate and compare your alternatives.
Step 7: Choose your UK forex broker.
Step 8: Open and fund an account, practice on the demo system, and then trade.
Step 9: Monitor your broker’s performance.
Comparing the features offered by the candidates in your search is a great way to find the most suitable one for your needs. Wecomparebrokers.com provides a unique service in this regard. Our compare forex brokers tool positions the offerings of two brokers side by side. A direct comparison of several criteria allows you to easily compare UK forex brokers.
There are a number of ways that forex brokers make money from their clients. Spreads are typically the main source of revenue, but special fees can also factor into a cost comparison. Leverage will also magnify these cost impacts, as the spreads will be a percentage of your position in the market at both opening and closing.
The forex brokerage business is very competitive. Brokers must choose to compete on price or quality, which means that if you want a high degree of support, then the broker of your choice may cost more. Fees and spreads may also depend on your account classification. The lowest fee schedules are often hyped in marketing materials, but they may only apply to institutional clients or accounts with very large deposit balances.
Brokers that take pride in their low fees and spreads and value transparency will often display their prevailing rates on their homepage. The best guide is to review the figures for the ‘EUR/USD’ pairing, as it is the most popular and heavily traded pair in the forex universe. UK brokers comply with FCA and the European Securities and Markets Authority (ESMA) mandated rules with respect to leverage. At present, ‘30:1’ leverage is permitted for major pairs, while minors are limited to ‘20:1’.
Selecting a regulated forex broker in the UK may seem daunting, but it need not be so. The staff at Wecomparebrokers.com canvass the top UK forex brokers for you to review. When you have read our guide and narrowed your search to two or three trusted forex brokers, check out their demo trading platforms for free and use our comparison feature to help you make your final decision. If your chosen broker disappoints and you wish to change, then remember to consult our list of the best forex brokers to help you decide.
How to become a forex broker in the UK
All firms and individuals offering forex trading services in the UK must be authorised and licensed by the FCA. It can require up to six months and $100,000 to acquire these credentials for a firm, which will also need technology and banking partners in the background and a website to convert leads to actual trading clients. Individuals need to learn about the forex market and earn professional certification.
Is forex trading legit in the UK?
Yes, forex trading is legitimate in the UK, but only when dealing with a broker registered with and licensed by the FCA. Avoid scam brokers located in an offshore country where very little regulatory oversight exists.
Is forex taxed in the UK?
Check with your tax advisor on how you conduct trades as this can impact the taxability of gains. For beginner forex traders (i.e., not your full-time occupation), the first £1,000 of income is exempt, but the remainder is taxed as ordinary income. For full-time self-employed traders, your profits over your tax-free allowance are taxable. If you trade with a spread betting broker, your gains are tax-exempt. If you trade with CFDs, no Stamp Duty is required, but gains are taxed as Capital Gains.
