How to find the best Forex broker in the UK

Currency trading is an increasingly competitive market, and Forex is no longer only the domain of professional investors, but instead appeals to many hobby enthusiasts.

This is no longer only the domain of professional investors
This is no longer only the domain of professional investors

While there’s no guarantee you can make money – as with any trading deal, values can go up or down and your investment may be at risk – shrewd investors aim to clue themselves up on the best deals, and find the best brokers to fit their own requirements.

What is Forex trading?

Forex or FX is a global Foreign Exchange marketplace for trading currencies against one another, speculating on geopolitical events to try to predict which currencies will rise in value or fall. Time it right and you can buy when prices are low, then sell when they are trading higher.

How do you make money?

It’s all about spotting the trends, then predicting which way the markets will go. If successful, you could make a profit by buying cheap and selling when the value has risen. A new market for individual traders, rather than professional agencies, has emerged, though the process is not without financial risk* and anyone considering venturing into Forex trading needs to fully understand the proposition and work with a trusted broker.

How to pick a good broker

Just as you would choose a mortgage provider or car insurer with great care, it’s worth finding the best Forex broker in the UK that you can.

Make sure you investigate platform’s compatibility, to ensure it is something you can work with.

Choose one who is FCA regulated – this offers you a degree of regulation and scrutiny that may reassure a novice investor.

Ask what fees (or spreads) they charge. And do they offer any training for someone who is new to trading?

Spread betting vs CFD

In the UK investors can use two methods in Forex trading. CFD is the more conventional method, but spread betting does have some advantages, including potential tax advantages and more ways to make a profit compared to conventional CFD. Make sure you fully examine the differences between spread betting vs CFD, and if you opt for the former, choose the right spread betting broker for your own individual needs. A company like Pepperstone, for example, is good for experienced traders, but beginners might want to investigate

Trading CFDs for UK traders

A CFD (contract for difference) trade is a form of derivative trading, and involves the movement of an asset – for example a share – without owning the asset.

There are many forms of CFD trading, such as commodities, shares and Forex.

It’s a well-regulated area with many rules, and you need a CFD broker to invest in this field. A good trader will keep you within the law, but some of the main restrictions to be aware of include crypto currency trading and reduced leverage.

One of the easiest ways to choose a broker that offers CFD trading is to compare the spreads they offer. That way you can compare the best fixed rate offerings with the widest range, the best beginner broker or one experienced in institutional CFD brokerage, and choose what works for you.

Which platform should I choose?

Just like choosing between VHS and Betamax, or diesel, petrol or hybrid, there are many popular Forex platforms to be considered, rather than a one size fits all. All FCA regulated brokers in the UK need to use a suitable platform, and some of the most popular around are MetaTrader 4, MetaTrader 5, and cTrader. Rankings will be based on the spreads, commissions, and customer service each provides.

Do a decent amount of digging to find out which system your broker uses and whether it works for you … the critical infrastructure is more important than you might think. Who wants to miss out on a deal due to trading speeds? Does the platform you are considering use automation in trading, and is that a feature you would find useful, especially as you dip your toe into the markets and learn as you go?

Find out if they charge extra fees, work on all international markets or have limits on their ‘free’ services?

Compare Forex Brokers has more information.

*Before investing in the stockmarket or currency trading it is recommended you take independent financial advice. Be aware the values can go down as well as up, and a profit is not guaranteed.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 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