Familiarize yourself with forex trading in the UK, including basic terminologies, guides to enter the market, and the ideal strategies.

Forex is by far the largest financial market in the world with a daily global turnover of $6 trillion. According to the Bank of International Settlements (BIS), the UK accounts for 43% of the turnover with more than $2 trillion of trading volumes each day. Without further ado, let's dive into the world of forex trading in the UK.

Is forex trading legal in the UK? Yes, forex trading in the UK is legal. It is regulated by the Financial Conduct Authority (FCA) who issues licenses for forex brokers to operate their business in the country. The FCA is one of the most reputable forex regulatory bodies across the world as its rules and laws are very strict. It is no brainer that the FCA license is the first thing you should look up when choosing a broker; this license leaves very little room for scammers as well as protects your funds if your broker goes bust.

Forex trading in the UK can be tax-free, but it depends on what type of trader you are. The HMRC, the tax department of the UK, classifies forex traders into two: Speculators and investors. Speculators are traders whose main source of income comes from non-Forex activities; thus, this type of trader is not liable to pay tax under the UK tax law unless forex profits hit the tax allowance of £12,500 for the 2020-2021 periods. Investors are traders who treat forex trading as a business from which the main source of income derives. Therefore, any forex profit has to be taxed on a capital gains basis.

If you have a hard time figuring out whether your forex income is subject to tax, don't hesitate to contact your tax advisor. A professional will help you set this matter straight. Of course, you can also help yourself by keeping a record of your trading activities in case your forex income is or becomes taxable.

 

 

Forex Trading in the UK: The Basics

  • Trading Hours

The forex market is decentralized unlike most other financial markets; therefore, forex trading is active 24 hours a day, 5 days a week (Monday to Friday). Opening and closing hours vary across the world due to the use of local time zones. For forex traders in the UK, the market opens at 08:00 AM and closes at 04:00 PM GMT.

  • The Brokers

Forex brokers are parties; companies, institutions, agents, or individuals that act as intermediaries between traders and the interbank system for buying and selling foreign currencies. As an individual trader, you will most likely not be able to directly make transactions with the interbank system. You'll need a middleman (a forex broker) to forward your transaction to bigger brokers or banks. As mentioned earlier, the most reliable forex brokers in the UK are those who obtained licenses from the FCA.

  • Trading Platform

A trading platform is a software where you conduct your trading activities. There are various useful indicators, tools, market analysis, and educational content available on a platform, which is free to use when you register an account. For forex brokers in the UK, it is a standard practice to create their own proprietary platforms to appeal to potential clients, but if you are new to the game, you might want to start with MetaTrader 4 (MT4) platform. The MT4 is a robust platform known for its simplicity as well as an abundance of indicators and features, making it very popular among beginners and seasoned traders alike. Besides the MT4, other platforms widely regarded as the best are MetaTrader 5 (MT5), Trading Station, xStation, and cTrader.

  • Mobile Apps

With mobile apps, you can easily execute trades anywhere you go. More and more traders these days choose mobile apps thanks to the rapid development of mobile devices technology. The top forex brokers in the UK provide mobile apps that can compete with desktop versions in terms of functionality, such as market analysis, technical indicators, trading community, educational content, and many more.

  • Spread

Forex brokers receive their income through spread which is the difference between the buy price (ask) and the selling price (bid). This is how traders pay their broker in forex trading. For instance, if the GBP/USD pair has an ask price of 1.0902 and a bid price of 1.09000, the spread is 0.0002 (1.0902 - 1.0900).

  • Leverage

Leverage is the ratio of capital borrowed from a broker to the traders' deposit (also called the margin). Most forex brokers in the UK offer leverage to traders as a means to trade with the bigger sizes. You can utilize leverage to magnify profits, but at the same time, it also amplifies potential losses.

  • Pip

Pip, an abbreviation of "percentage in point" or "price interest point", is a standard unit of measurement in forex trading, which pertains to the smallest change in the value of a currency pair. Most currency pairs are quoted to 4 decimal places, meaning a price movement of 0.0001 represents 1 pip.

  • Lot

Lot, also a standard unit of measurement, pertains to the size of currency units required to open a trade. The standard lot size is 100,000, representing 100,000 base currency units ($100,000 if you trade on USD). There are also mini lot (10,000), micro-lot (1,000), and nano lot (100).

  • Order

An order, in its simplest definition, is an instruction sent out to the broker to enter or exit a trade. Nowadays, automated and algorithmic trading systems are increasingly utilized by traders to execute orders, though you can still do it manually through the trading platform.

 

Start Forex Trading in the UK

If you are new to forex trading, these simple steps will help you to enter the market.

 

1. Choose a Forex Broker

Multiple forex brokers in the UK are available for your choosing, but first, make sure that the brokers are licensed by the FCA. You can shortlist the brokers based on your needs and experts' reviews, but your choice should be made only after you test all the shortlisted brokers by opening demo accounts.

See Also: How to Choose the Best Forex Broker

 

2. Open an Account

Follow the instruction of your forex broker to set up your account. In this step, your broker will verify your identity and give you options for money transfer. Although minimum deposits differ between forex brokers in the UK, the majority offer a minimum deposit as low as £100. Again, it is highly recommended that you open a forex demo account before investing your hard-earned money.

 

3. Fund the Account

If you have prepared yourself for the risk, it's time to deposit real money into your account. Funding an account is made easier these days with various methods provided by most brokers, either from credit cards, debit cards, or bank accounts. Brokers have different offers (such as leverage or margin)for different types of accounts, depending on the amount of your deposit.

 

4. Download a Platform

Your broker offers either their own proprietary platform or a third-party platform such as MetaTrader. Sometimes, your option also depends on the type of your account. Your platform should be able to run smoothly, so you can minimize technical errors.

 

5. Choose a Currency Pair

The number of currency pairs to trade varies among brokers. However, most brokers offer major currency pairs (pairs that include USD such as EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD) as these pairs are the most popular among traders; thus, this guarantees enough liquidity for trading almost all the time. Major currency pairs are offered by most brokers at the lowest spreads.

Minor currency pairs, on the other hand, do not include USD. Pairs that include GBP, EUR, and JPY are among the most-traded. The last are exotic currency pairs which include a major currency and a currency from a developing country, such as USD/BRL (Brazilian Real) or USD/THY (Turkish Lira). These pairs are traded at low volumes, resulting in higher spreads than those of the aforementioned two.

 

6. Buy or Sell

This step is the very essence of Forex trading. You buy a currency when you are confident that the price will rise, and on the opposite, you sell if you think the price will drop. Use technical indicators on your platform and pay attention to market analysis before you make your choice.

 

7. Set Stop Loss and Take Profit

Stop and Limit Orders are tools offered by your broker to help minimize trading risks. To limit your losses, a stop-loss order is designed to automatically exit a trade when losses reach a price that you've set beforehand. Likewise, a take profit order exits a trade when your profits reach a predetermined price.

 

8. Monitor and Exit Trades

Monitor your opened position on the platform or get notifications when your trade hits a certain target. Exit the trade by simply "close" and the platform will show you profits or losses generated from the trade.

 

Forex Trading Example in the UK

Suppose you are trading EUR/GBP and you want to buy €10,000 with a current price of 0.89030. The broker offers a leverage of 1:50, or in other words the margin percentage is 2%. Your margin requirement will be £178.06 (10,000 x 0.89030 x 2%).

After a while, the price moves up to 0.89350 or a change of 32 pips. Your profit then will be £32, calculated by subtracting the buying price from the selling price and multiplying the difference by the lot size ((0.89350 - 0.89020) x €10,000).

 

Trading Strategies for Forex Traders in the UK

The forex trading volumes in the UK might be gigantic, but that doesn't guarantee instant success for any newcomers who want to try their luck. The following strategies can help you approach forex trading the right way.

 

Trading with Momentum

A momentum indicator shows the strength of price movement in a particular direction. It is a type of lagging indicator which signals a market trend when it is already in progress. Traders usually pair momentum indicator (blue line on the chart below) with moving average indicator (cyan line) to smooth out the chart. When the blue line crosses the cyan line from below, it is a signal to buy. When the crossing happens from above, it is a signal to sell.

Momentum Trading

 

Breakout Trading

A breakout takes place when the price moves far and beyond previous price ranges (support or resistance level). The idea of a breakout strategy is to enter the market shortly after the price makes a breakout in the hope that the movement gains traction.

Breakout Trading

 

Mean Reversion

Mean reversion is the theory that the price of a currency pair will eventually return to its average levels despite the price fluctuation. The average price is calculated by using either the simple moving average (SMA) or the exponential moving average (EMA), preferably the EMA which puts more weight on the latest closing price. You can implement this strategy if you observe the price moves in a certain range. Enter a trade when the price is moving away from the mean.

Mean Reversion

 

Retracement and Reversal

Oftentimes, the price moves against the trend (pullback). If the movement is temporary, it is called a retracement. For example, a temporary drop can be followed by uptrend continuation where the price rides on the overall uptrend. Take advantage of this situation by opening a trade when the price action is falling. You should, however, be careful because if the pullback continues, then it is a signal of reversal where there is a change of direction in the market trend. Confirm reversal with momentum indicators and charting patterns such as double bottom or head and shoulders pattern as exemplified below.

Double Bottom

Head and Shoulders

 

Carry Trade

This is an alternative strategy that you might want to try. A carry trade involves buying a low-interest-rate currency and converting it to a high-interest rate one. The profit is generated from the difference in the interest rates between the currency pair. The Japanese Yen is the most popular currency in carry trades due to its low-interest rate.

Carry Trade

 

Pivot Point

The pivot point is the average of the high, low, and closing prices from the previous day. This strategy is utilized alongside support and resistance levels which are calculated by using the pivot point itself. Since many traders use pivot points to determine the area where prices are expected to change direction, they often become self-fulfilling. Typically, the technical indicators will include two support and two resistance levels. Buy a currency pair if the price is nearing the support level and sell if it is nearing the resistance level.

Pivot Point

 

Make Profit with Forex Trading in the UK

The forex market in the UK is extremely attractive and filled with a lot of opportunities. Various kinds of profiting from the UK's forex market are as follows:

  • Short Selling Currency: You sell a currency pair at a low price and buy it back at a higher price, as opposed to the popular method of buying a current at a low price.
  • Contract for Differences: With CFDs, you don't actually own currencies. The advantage of CFD is the availability of various tradable instruments, not just forex. You trade with leverage and gain profit from the difference between the entry and exit price.
  • Currency Option: The basis of this method is to speculate on the price movement. It is a contract that gives the buyer the right (but not the obligation) to buy (call option) or sell (put option) a currency pair at a pre-agreed price on or before the expiration date.
  • Binary Option: Brokers allow you to buy a contract at a fixed price within a defined period of time for a fixed return; thus it is called a fixed-return option. Keep in mind that if the speculated price is not reached, you will lose 100% of your investment. On a positive note, however, your loss is limited.

Implementing techniques aside, every now and then you need to expand your trading knowledge through education. A vast ion of resources is within your reach, such as YouTube videos, books, webinars, online forums, articles, and even experts' social media accounts. For more advanced learning experiences, you can learn from the Trading Basics section where you can equip yourself with some knowledge about building a career as a trader.

 

Forex Brokers for UK Traders

The forex market is getting increasingly competitive among brokers. To help you pick your choice, here is a ion of forex brokers for UK traders. Click on the available buttons for in-depth reviews and when you want to start trading.

 

1. HYCM

🌐 Website
www.hycm.com
Leverage
1:325
💼 Regulation
CIMA CySEC DFSAFCA FSA
💲 Min Deposit
$100
Year Established
1977

Islamic accounts available
Bitcoin
Neteller
Skrill
WebMoney
Wire transfer

Formerly known as HY Markets, HYCM is a forex broker headquartered in London, UK. First established in 1977, this broker now has been regulated by the FCA (Financial Conduct Authority), the UK's trustworthy and reputable regulatory agency for more than 20 years. Besides, HYCM has also been regulated by other reputable agencies like CIMA (Cayman Islands Monetary Authority), CySEC (Cyprus Securities and Exchange Commission), and DFSA (Dubai Financial Services Authority).

Regulated by world-renowned financial regulators as well as having representations in the United Kingdom, Hong Kong, Cyprus, and Dubai, clients who open an account in HYCM can rest assured they are trading with a solid and secure company that excels in delivering one of the best trading solutions.

As a part of Henyep Group, HYCM opts to provide wide access to various trading markets including currencies, stocks, and commodities. Besides, HYCM has accumulated a large collection of awards since its inception, including World Finance’s Best Mobile Trading Platform (2017) and Global Banking & Finance Review's Best Forex Broker, UAE (2017).

Its recognition as an industry leader has helped HYCM to be known as the best broker across the globe. With a long track record of its ability in providing an outstanding and trustworthy trading experience, HYCM offers clients everything they need to make well-informed trading decisions.

HYCM offers some excellent trading conditions for their clients, including great liquidity and low spreads, as well as delivering a super-efficient service. Those services are in line with their commitment to focus on fast execution and low-cost trading. Any trading conditions offered by HYCM is differed by the instruments being traded:

Forex

  • Spread: starts from 0.2 pips
  • Maximum Leverage: 1:30

Stocks

  • Spread: starts from 18 pips
  • Maximum Leverage: 1:5

Indices

  • Spread: starts from 2.0 pips
  • Maximum Leverage: 1:20

Commodities

  • Spread: starts from 3.0 pips
  • Maximum Leverage: 1:20

Since HYCM is intended to be a broker of the most updated technology, they strive to stay ahead of industry trends by adopting the latest technologies to fulfill their clients' evolving needs. HYCM provides both MetaTrader 4 (MT4) and MetaTrader5 (MT5) trading platforms, to assist traders from all skill levels, together with advanced technical analysis, flexible trading systems, and Expert Advisors, as well as mobile trading applications.

For those who are newbies to the forex field, HYCM has helped much by preparing lots of educational resources and comprehensive product offerings. There are some forex tutorials, trading strategies, forex ebooks, and beginners' courses. Trading in HYCM also provides some useful tools, including calculators, economic calendar, news, and market outlook. Those overall services are a good choice for investors of all kinds, from beginners to professionals.

Last but not least, HYCM also offers various convenient deposit and withdrawal methods through bank transfer, credit card, and e-payment (Neteller, Skrill). Although bank transfers can take up to 5 days to appear in the trading account, all other methods are instantly processed for immediate trading. Numerous currencies are accepted as base currency including US Dollar and Euro, as well as KWD (Kuwaiti Dinar), AED (United Arab Emirates Dirham), RMB (Chinese Yuan), and SAR (Saudi Riyal).

If you are looking for a reputable and trustworthy broker with whom to begin trading and invest your funds, HYCM is a good choice. As they are fully licensed and regulated, investors are guaranteed the security of their financial and personal details. The choice of user-friendly trading platforms makes HYCM a sensible selection for both novices and experienced traders.

 

2. Forex.com

🌐 Website
forex.com
Leverage
1:200
💼 Regulation
CFTC/NFA FCA FSAIIROC
💲 Min Deposit
$250
Year Established
1999

Free education
US traders are welcome
Wire transfer

FOREX, also known as FOREX.com, is one of the global market leaders in the financial industry. Established in 2001, FOREX is a part of Gain Capital Holdings specifically meant for FX & CFD trading on powerful trading platforms and the popular MetaTrader 4.

Similar to its parent company, FOREX has been licensed by various financial watchdogs, including the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) from the US, the Financial Conduct Authority (FCA) from the UK, the Investment Industry Regulatory Organisation from Canada, as well as the Financial Services Agency from Japan.

For traders in South East Asia and the Middle East area, FOREX has been operating under the regulation of the Cayman Islands Monetary Authority.

Quality execution on every trade, transparency, and competitive pricing are some of the most optimized services in FOREX.com. As per Q3 2019, the broker's total assets reached $1.288 billion and the total customer equity amounted up to $849.8 million.

FOREX presents its clients with the best freedom to trade in 300+ global markets including 80+ FX pairs, 220+ shares, indices, commodities, and cryptocurrencies. Spreads on each asset are displayed live on FOREX.com's official website, with EUR/USD having a spread as low as 0.8 pips.

For the trading platform, FOREX provides two major options: its in-house platform and MetaTrader 4. Both types are available on various devices and can be accessed as a web-based platform and mobile app. Furthermore, FOREX's proprietary platform is furnished with advanced charting tools like 70+ technical indicators, a host of time intervals, multiple chart types, 50+ drawing tools, and customization features.

Trading in FOREX.com is provided with various trading conditions that accommodate the needs of multiple types of traders. Apart from the services, FOREX also provides guidance and supports in the forms of real-time trade signals and analysis tools from Autochartist and Recognia. There are also trained market strategists to work with on developing a trading plan, as well as market analysis to keep clients Stay informed with real-time market insights and actionable trade ideas from FOREX's research team.

Account funding and withdrawal are enabled via bank transfer. However, there are no further details on the minimum amount of each process. FOREX also does not seem to present other options for payment methods like credit cards or even e-payment.

Generally, FOREX is a reliable FX and CFD broker based on its regulations and long-standing history since 2001. Clients can trade in either FOREX's platform or MetaTrader 4 with competitive spread and pricing. Still, FOREX is one of the top-tiers in the brokerage industry that adheres to strict regulations of prestigious financial regulators.

Some of its trading conditions may not suitable for retail traders with barely enough experience or small capitals. Despite it all, FOREX.com hosts one of the most accomplished material packages when it comes to financial trading.

 

3. eToro

🌐 Website
www.etoro.com
Leverage
1:400
💼 Regulation
ASIC CySEC FCA Financial Services Regulatory AuthorityFINRA
💲 Min Deposit
$200
Year Established
2007

Trading contests
Free education
Personal manager
Segregated accounts
Affiliate program
Islamic accounts available
US traders are welcome
Neteller
PayPal
Skrill
WebMoney
Wire transfer

eToro established in early 2007, with a mission to make trading accessible to anyone, anywhere, and reduce dependency on traditional financial institutions. The company has head offices in the United Kingdom, Cyprus, USA, and Australia.

eToro (Europe) Ltd operates as a Financial Services Company authorized and regulated by the Cyprus Securities Exchange Commission (CySEC) under license no. #109/10. Meanwhile, eToro (UK) Ltd is authorized and regulated by the Financial Conduct Authority (FCA) under the license FRN 583263.

As for eToro AUS Capital Pty Ltd, the legal standing is acknowledged by the Australian Securities and Investments Commission (ASIC) to provide financial services under Australian Financial Services License 491139.

A broker that belongs to the 4-digit type, eToro offers both short-term options for day traders and long-term options for investors, such as their innovative CopyPortfoliosTM, a fully managed thematic portfolio.

Since 2007, eToro has been at the forefront of the Fintech revolution. The most recent was launched in 2017, which is CopyPortfolios powered by Machine learning Al. Beyond developing CopyPortfolios, the company integrated Microsoft's machine learning technology into Momentum DD.

The new CopyPortfolio investment strategy uses artificial intelligence to find the steadiest traders who are most likely to generate a double-digit return and bundle traders into one fully-managed portfolio. eToro has hundreds of financial assets for trading across several categories including stocks, commodities, crypto assets, currencies, indices, and ETFs. Each asset class has characteristics and can be traded using a variety of investment strategies.

Some positions on eToro involve ownership of underlying assets, such as non-leveraged positions on stocks and cryptos. Employing CFDs will enable a variety of options, such as leveraged trades, short (sell) positions, fractional ownership, and more. For example, traders can invest as little as USD100 in gold, even if a single unit of gold cost USD1,000. Some of eToro's most popular CFD commodities include gold, oil, natural gas, silver, and platinum.

Currencies are traded on eToro only as CFDs. Also, CFDs enable Sell (short) positions and leveraged trade, even for assets that don't offer the option in traditional trading. Some of the popular currencies include EUR/USD, GBP/USD, AUD/USD, USD/JPY, and USD/CAD.

Furthermore, An Exchange-Traded Fund (ETF) is a financial instrument comprising several assets grouped to serve as one tradable fund. After opening an account in eToro, traders can invest as little as USD250 in an ETF that costs USD500. Some of the popular ETFs on eToro include SPY, VXXB, TLT, and HMMJ.

However, eToro also offers additional functions using CFD trading. All leveraged ETF positions in the UK are under FCA regulations. Meanwhile, all CFD positions executed by eToro Australia are under ASIC regulations.

The company has other advantages. In all financial assets that can be traded, eToro does not charge any deposit or trading frees other than spreads.

eToro charges a USD25 fee for withdrawals and the minimum withdrawal amount is USD50. Long (Buy), non-leveraged crypto, stock, and ETF positions are not executed as CFDs and do not incur any fees. eToro does charge overnight or weekend fees for CFDs positions, such as leveraged positions and short (sell) orders.

Fee updates always apply to open positions. Fees are subject to change at any given time and could change daily, without prior notice, depending on market conditions.

As a beginner, trader can use CopyTrading eToro. Different from the features of other brokers, traders can copy the strategies of professional traders without fee or profit-sharing. Therefore, 100% profit is fully owned by traders. For example, while trader A who is copied by trader B, produces a profit of 10% this month, then trader B also gets a profit of 10%.

The company is the world's leading social trading network. Since eToro operates in complete transparency, each trader has valuable information on their eToro profiles, so other traders that are interested to copy their trades can have assistance in creating their best portfolios.

Another feature that is unique to eToro is the personalized, social News Feed. Just like on any social media, traders can post their updates on feed, comment on other's posts, and gradually create a feed that is tailor-fitted to trader's trading and investing interests. On eToro social trading platform, traders will also get notifications when a trader writes a new post and many other important updates.

 

4. AvaTrade

🌐 Website
www.avatrade.com
Leverage
1:400
💼 Regulation
ASIC Financial Futures AssociationFinancial Services Regulatory AuthorityFSAFSCFSCAISA
💲 Min Deposit
$100
Year Established
2006

Bonus offers
Trading contests
Free education
Personal manager
PAMM accounts
Segregated accounts
Managed accounts
Islamic accounts available
Requires sending documents via postal mail
Neteller
Skrill
WebMoney
Wire transfer

Avatrade can be called one of the most well-rounded brokers that support almost all trading styles. Not only allowing hedging, scalping, and expert advisor (EA), Avatrade also completes their service with One-cancels-the-other order (OCO) and AutoTrading in many variants of automated trading systems.

AvaTrade was founded in 2006, with the primary mission to empower people to trade with confidence. If traders are still confused about what is the best broker for supporting trader's trading, AvaTrade perchance option of traders, because it has been evaluated and honored for some of the industry's most remarkable financial and technological achievements that it provided to clients.

In 2019, the Dublin-based broker got achievement from Daytrading.com as The Best Forex Broker 2019. Besides, the company is honored as Best Forex Broker, Best Bitcoin CFD Trading Provider of the year, and Best Affiliation Programme in the European area.

Furthermore, for traders who have high mobility, AvaTrade provides many platforms that allow traders to trade using laptops and mobile phones. The availability of the free Autochartist tool in the platforms is the best support for both novice and experienced traders because it makes it easier for them to find trading opportunities without the need to glance at charts all day.

The Autochartist free signal is provided in Gold Account, Platinum Account, and AVA Select. By opening an account in AvaTrade, traders don't have to pay for getting a full Autochartist service. Autochartist itself is a market scanner tool that can detect trading signals from various technical perspectives.

Traders can access AvaTrade in many variants of platforms, such as AvaTradeGO, MetaTrader 4, MetaTrader 5, Automated Trading, Mac Trading, Web Trading, Mobile Trading, and AvaOptions.

In terms of regulation, AvaTrade is regarded as a superior broker because it has a lot of credible licenses. That way, even with deposits of up to ten thousand dollars, security can be guaranteed. Applying the Segregated Account system, AvaTrade is regulated by the Central Bank of Ireland (No.C53877), ASIC Australia (No.406684), JFSA Japan (No.1662), and South Africa (FSP 45984).

Can traders lose more than their deposit abruptly in the event of high volatility? AvaTrade explicitly answers no, as traders have negative balance protection.

With a minimum deposit of USD100, AvaTrade offers various leverage depending on the trading instruments; whether it is forex (starts from 30:1), indices (starts from 20:1), commodities (starts from 5:1), ETFs (starts from 5:1), or cryptocurrencies (starts from 2:1).

AvaTrade has committed to a set of values in relation to customers. Therefore, the company provides the best trading experience, offering multilingual customer service and the most sophisticated and user-friendly trading platform.

New traders can also learn forex trading in the Education tab on AvaTrade's official website. Traders will find a wide collection of articles, video tutorials, and more tools that will assist them every step of the way. It is an important requirement as the forex market might be a bit overwhelming and even scary at times, so traders need to make sure that they are fully prepared to begin trading in the real account.

There are many types of account types provided by AvaTrade. There is also an Islamic Trading Account, which is uniquely provided for Muslim Traders. Islamic account type is similar to a regular one with one key difference; it is not subject to any special fees or interests (swap-free), which sits well with the finance principles of Sharia Law.

If traders have felt confident for forex trading, traders can choose AvaTrade as an ideal choice. The minimum deposit and various platforms offered to make it a suitable destination for even beginners who would like to try forex trading for the first time.

 

5. Pepperstone

🌐 Website
pepperstone.com
Leverage
1:500
💼 Regulation
ASIC BaFin Capital Markets Authority of Kenya CySEC DFSAFCA SCB
💲 Min Deposit
$200
Year Established
2010

Free education
Trading by telephone
PAMM accounts
MAM accounts
Segregated accounts
Affiliate program
Islamic accounts available
PayPal
Wire transfer

Pepperstone was founded in 2010 by a team of experienced traders with a shared commitment to improve the world of online trading. Based in Melbourne, Australia, they grew to become one of the largest forex brokers in the world. If traders want to find a broker that provides low spreads, fast execution, and award-winning support, then the answer is Pepperstone.

Pepperstone has a strong legality guarantee because it has been licensed by the Australian regulator ASIC and FCA. Traders' funds can be deposited in segregated accounts at top Australian banks, one of which is the National Australia Bank (NAB). Therefore, the safety of funds is not a concern if a trader chooses to open an account in Pepperstone .

They succeeded in collaborating with 23 top banks to bring Bid to investors instantly via optical fiber. This allows all orders to be executed 100 percent automatically with low latency up to 0.05 milliseconds, without dealing desk intervention and requotes, as well as with super low trading costs.

Trusted by over 73,000 traders around the world, Pepperstone processes an average of USD12.55 billion of trading volumes every day. Because of that, they have many awards such as:

  • The Best Global Forex ECN Broker 2019 and Best Forex Trading Support-Europe
  • Best Australian Broker and Best Trading Platform 2018 by Compareforexbrokers.com
  • Best Forex ECN Broker, Best Forex Trading Support, and Best Forex Trading Conditions by UK Forex Awards 2018

With the many rewards gained, Pepperstone hopes to attract more and more traders from all over the world. The rising performance of Pepperstone is not only due to the super-tight spreads and fast execution that it provides, but also because many traders are interested in trading with deposits in currencies other than US Dollars.

For this reason, Pepperstone is one of the most market-responsive brokers because it is willing to accept deposits in 10 currencies, which include AUD, USD, EUR, CAD, GBP, CHF, JPY, NZD, SGD, and HKD.

Trading in Pepperstone would allow traders to choose between 11 trading platforms: MT4 for desktop, MT4 Mac, MT4 iPhone, MT4 Android, MT4 iPad/Tablet, MT5, WebTrader, cTrader WebTrader, cTrader cAlgo, and cTrader Mobile. The choice of trading platforms may seem confusing to novice traders, but actually, it is very useful because it has fast execution.

When trading forex, traders can enjoy raw spreads from 0.0 pips on Razor accounts, over 61 currency pairs, and commission-free account funding on a wide range of deposit options. In addition to currency pairs, Pepperstone provides many types of trading instruments, including CFDs for indices and shares, commodities, and cryptocurrencies.

Instruments in commodity trading are pretty much diversified. Not only metal, gold, and silver, but traders can also trade with soft commodities such as cotton, sugar, coffee, cocoa, and orange juice. Pepperstone also provides trading on energy (oil and gas).

There are two types of accounts provided by Pepperstone, namely Razor accounts, and Standard accounts. If you area beginner, it is recommended to choose a Standard account with an average EUR/USD spread of 1.0-1.3 pips and free commission.

Those with particular trading styles such as scalpers and algorithmic traders may enjoy the lower cost setup traditionally seen in a Razor account, with a commission from AUD7 round turn of 100k traded. The initial deposit starts at USD200 with a minimum lot of 0.01 (micro) and 1:500 leverage.

As a Pepperstone client, a trader can fund and withdraw with alternative methods including Visa, Mastercard, POLi internet banking, bank transfer, BPay, PayPal, Neteller, Skrill, and Union Pay.

If you are new to trading or looking to practice your trading strategies in a risk-free environment, you can create Demo Account in Pepperstone. But if you are an experienced trader or prefer to learn by doing, Pepperstone provides a Live Account that allows you to trade with live executions and pricing.

Traders can also follow and copy strategies from popular traders using third-party services while learning how to improve their trading abilities. Pepperstone has partnered with a range of social trading platforms that traders can choose from, such as Myfxbook, ZuluTrade, Mirror Trader, MetaTrader signals, and Duplitrade.

 

6. Plus500

🌐 Website
www.xm.com
Leverage
1:888
💼 Regulation
ASIC BaFin CNMV CONSOBCySEC FCA FSPIFSCESMA
💲 Min Deposit
$5
Year Established
2009

Interest rate on funds
Bonus offers
Free education
Personal manager
Trading by telephone
Segregated accounts
Affiliate program
Islamic accounts available
Requires sending documents via postal mail
CashU
FasaPay
Neteller
QIWI
Skrill
WebMoney
Wire transfer

Established in 2009, XM is a member of an online brokerage company called Trading Point of Financial Instruments Ltd. In providing clients on a global scale, the company has branched into XM Australia and XM Global, and XM Cyprus. Each member has different headquarters and licenses, with XM Australia registered under the Australian Securities and Investment Commission (reference number: 443670), XM Global under the IFSC (60/354/TS/19), and XM Cyprus under the Cyprus Securities and Exchange Commission (reference number: 120/10).

XM is one of the more experienced brokers in the world of online forex trading today. Since its founding, the broker has experienced a lot of changes, including the addition of the Ultra-Low Account and Webinar feature that is accommodated in 19 different languages with 35 native instructors for each language.

In terms of trading instruments, XM is a well-known diverse class assets provider, varying from Forex, Commodities, Equity Indices in CFDs, Precious Metals, Energies, to Shares. XM prides itself to be the ideal broker in trading execution, offering a stat of 99.35% orders to be executed in less than 1 second. Trading in XM would be also provided with a strict no requotes policy, no virtual dealer plug-in, no rejection of orders, real-time market execution, and the choice for traders to place orders online or by phone.

Spreads on all majors can reach as low as 0.6 pips in Ultra-Low Account, while spreads on other accounts usually start from 1 pip. Instead of providing maximum leverage on the scale of 1:500 or 1:1000 (round numbers), XM chooses to limit their leverage on a 1:888 scale, a unique number that is now widely recognized as XM's trademark.

To protect the client's fund in the event of extreme volatility, XM presents each account type with Negative Balance Protection. The deposit starts from $5 in Micro and Standard Account, while Ultra-Low Account requires a minimum deposit of $50. Traders who open accounts in XM are enabled a condition similar to a Cent Account environment in the Micro Account, in which the Contract Size for every lot is only 1,000 units. If it is applied with the smallest lot size in the MetaTrader platform which amounts to 0.01, it means that traders can go as small as 10 units per trade.

For the deposit, XM applies zero-fee deposits in most of its available payment methods. Traders can choose to fund or withdraw their accounts via wire transfer, credit card, as well as the most favorable e-payment choices like Skrill, Neteller, and FasaPay.

XM also provides an Islamic Account for Muslim Traders obligated to Sharia Law that prohibits the use of interest generated by overnight swaps for each currency pairs. To give their clients the best experiment in trading, XM has given access to both MT4 and MT5 platforms, each is available for more than 6 display formats (PC, Mac, Multiterminal, WebTrader, iPad, iPhone, Android, and Android Tablet).

All in all, there is no doubt that XM has gone global with its deep commitment to providing trading services in more than 15 languages around the world. Aside from easing traders' experience with mainstream trading platforms and high-quality trading execution, XM is open to various types of traders, from small capital traders to the more experienced ones with big deposits at the ready. Traders are even provided with a Cent Trading environment should they choose to register under Micro Account.

For their global approach, XM has ensured that traders from various countries could access their service easily. This results in the provision of different domains specified for traders in certain jurisdictions. For example, traders from Indonesia could access XM via this link.

 

7. IG

🌐 Website
www.ig.com
Leverage
1:50
💼 Regulation
CFTC/NFA FCA
💲 Min Deposit
$1
Year Established
1974

Free education
US traders are welcome
Wire transfer

IG Markets is an online trading provider with decades of experience in the financial market. Founded in 1974, the world-leading company has gathered more than 178,000 clients worldwide with over 16,000 markets reached as of 2019. IG Markets is authorized and regulated by the Australian Securities and Investment Commission (ASIC). It is also important to note that being established in 1974 makes IG Markets one of the forefront online CFD brokers. Their service has expanded to 15 countries across five continents.

Aside from famous for its reliable experience, IG Markets is also known for its truly broad range of trading instruments. In fact, the broker has long been regarded as one of the most accomplished companies in offering the most trading assets to clients. The wide choice of instruments includes forex pairs, 26 indices, over 12,000 shares, hard and soft commodities, cryptocurrencies, as well as other markets such as bonds, rates, and options.

Forex trading in IG Markets is provided in two ways: CFD and DMA (Direct). Here are the conditions for each type of trading:

Forex CFD

  • Minimum spread: 0.6 pips
  • Commission: None
  • Platforms: Web, mobile apps, MT4, ProRealTime, L2 Dealer, terminals and APIs
  • Trading size: Contracts
  • Demo account: Yes

Forex DMA

  • Minimum spread: No details
  • Commission: from $10 per $1 million traded
  • Platforms: Web, mobiles apps, L2 Dealer, terminals, and APIs
  • Trading size: Lots
  • Demo account: No

Both ways of trading are available for all clients. However, DMA does not enable trading in MetaTrader 4. Clients are also not allowed to trade in a demo account for virtual trading. It is essentially a type of trading reserved for experienced traders with high necessity for the best pricing in the market, as DMA offers market depth from a range of exchanges (including full market depth from the LSE).

Trading platforms in IG Markets are accessible via web, mobile app, and desktop. They are offered with 2 main varieties: Core Platforms and Specialist Platforms. The core platform is meant for all types of trading with the add-ons of DMA, ProRealTime access, and Forex Direct. Meanwhile, Specialist Platforms consist of L2 Dealer, ProRealTime, and MetaTrader 4.

The first two platforms charge fees that include minimum $2000 balance and monthly fees for shares data and level 2 prices (for L2 Dealer), as well as platform fees amounting to $40 per month and monthly fee for shares data (for ProRealTime).

IG Markets does not require a minimum balance to open an account. It also provides a swap-free account that frees clients for any interest, rollover, or swap charges on overnight positions. Yet, All costs and charges are built into the spread. This account suits well with long-term traders who need to keep their positions open for days or even weeks.

For beginners, IG Markets builds an IG Academy that gives interactive education and online trading courses. This way, clients can get a grip on the financial markets with the essentials of trading provided in infographics, video explainers, and end-of-course quizzes. Even better, the IG Academy is already integrated into its mobile app so clients can always learn about financial markets in much more efficient ways.

In conclusion, IG Markets is a client-friendly broker with more than 40 years of experience to back up its credibility. Their efforts and commitments to provide the best varieties of trading platforms are proven in the unique Core and Specialist Platforms.

Traders with little experience can apply to Forex CFD account in either Core Platforms or MetaTrader 4, while professionals can achieve the best experience in the financial market with IG Market's DMA trading and L2 Dealer or ProRealTime platforms.

 

Conclusion

With a large market and reputable regulation, forex trading in the UK is an attractive place for traders to invest their money in. What's more, it is easily accessible as registering for an account can be done with a few simple steps. After you started, it is important to keep learning and honing your trading skills. The very last thing you want is to lose money in the world's largest market.