Best UK Forex Brokers Compared for November 2024

List of the best forex brokers UK: FCA Regulated

Below is my authorised list of the best forex brokers for UK investors regulated by the FCA.

What is forex trading?

Forex trading is the largest and most liquid financial market in the world, involving the changing of one currency into another, often with the anticipation of making a profit in doing so.

The foreign exchange market, also known as the FX market or forex market, is the global market for the exchange of one currency for another. This can be conducted for commerce, trading, or tourism reasons, and forex is usually traded as exchange rate pairs. An example of an exchange rate pair or currency pair would be GBP/USD which is the pair for trading the Great British Pound against the U.S. dollar.

In contrast to a stock market, with forex trading, there is no central marketplace. Currency trading is conducted electronically over the counter (OTC) via computer networks among traders from across the globe. This means the market is open 24 hours a day for five and a half days a week, with price changes constantly moving. This allows for speculative opportunities for trading one currency against another for professional traders and retail investors.

How to trade forex

There are two ways to trade currencies. The first is to earn the interest rate differential between two currencies. This works by buying the currency with the higher interest rate and shorting the currency with the lower interest rate.

The other way to trade currencies is to profit from changes in the exchange rate.

These fluctuations in the price of a currency will depend on supply and demand from banks participating in the spot market. These large trade flows prevent rogue traders from having any influence on the price of any given currency, which in turn helps to provide some transparency for investors.

MetaTrader 4 (MT4)

MetaTrader 4 (MT4) is a trading platform commonly associated with forex trading, but it can also be used to trade a range of other markets via CFDs, including indices, cryptocurrencies, and commodities.

See my guide to the best MT4 brokers offering the MetaTrader 4 forex trading platform.

What influences price changes in the FX market?

The value of any particular currency is based on supply and demand; however, there are some currencies, such as the Chinese renminbi, that have a fixed exchange rate. Currencies without a fixed exchange rate are known as floating currencies, and this is the case for most advanced economies, including the UK pound.

Floating currencies are constantly moving up and down in value against other currencies. These are usually small changes in movement, as small as a fraction of a cent higher or lower at the end of a trading day. However, this can change dramatically at the hands of extreme economic or political news. In this instance, there can be wild swings in price, such as a 10% fall in value the day after the UK voted to leave the European Union. This encouraged traders to sell the pound quickly, decreasing its demand and thus its value.

Another example of a market influencer are economic developments such as data that reveals the economy is growing faster than predicted, which in turn could lead to the Bank of England increasing interest rates. Higher interest rates lead to a greater return on your money and therefore increase demand, boosting its value. This is how financial markets ebb and flow in line with economic, financial, and political news.

The best forex trading platforms will often include live news feeds in their suite of tools to enhance retail traders capacity for profit. This is also the reason why mobile trading is so important: traders can react instantly to changes that may affect the price of currencies.

Why is FX trading so popular?

Forex trading is arguably one of the most popular forms of investment, with a daily average trading volume of about $5 trillion.

The main reason for this demand among investors is that forex is one of the largest financial markets in the world. The high volume and number of different currencies being traded offer a decent amount of liquidity.

However, the downside to this amount of liquidity that potential investors should be aware of is that, while you may be able to generate a return by trading forex, there’s always the potential of losing value on your investment, too.

Indeed, most platforms will report that the majority of retail investment accounts lose money when trading CFDs and forex.

There are things you can do to mitigate this risk in your investment strategy. For example, building up your knowledge of the market can help you make informed investment decisions.

Additionally, the fact that the forex market is available for trading 24 hours a day for five and a half days of the week means individual investors can react quickly to market influences, such as political and economic news.

Unlike stocks and shares, where time in the market is typically more of an influence on your success than timing the market, these rapid price movements mean gains and losses are immediate.

The forex market also benefits from leveraged trading, whereby investors can open a position on a larger portion of the forex market.

This increased exposure can magnify your gains by this margin without you having to invest the same amount of money that would usually be needed for such a trade at the outset.

However, you should bear in mind that this also means that any losses you make will be magnified in the same way. Therefore, it is important to fully understand how leveraged trading works before you invest.

Remember: no investment is risk-free, and you may not get back as much as you invested, regardless of the strategy you use.

Please note: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Is FX trading legal in the UK?

Yes, FX trading is legal in the UK, although each platform will have its own level of regulation, and this is always worth checking. On the whole, forex brokers in the UK are regulated by the FCA (Financial Conduct Authority), which is responsible for ensuring that all UK forex brokers are licenced and are providing a trading environment that is in the best interests of the traders that use it. Regulation by the Financial Conduct Authority also provides protection for your funds under the Financial Services Compensation Scheme (FSCS), which aims to compensate traders for the loss of their trading funds in the event the broker runs into insolvency issues.

In addition to this, the FCA requires that a multi-asset trading platform keep its operating capital separate from that of its traders to ensure this is protected should the platform experience financial difficulty.

However, it may be the case that some forex brokers are regulated by a similar body outside of the UK. These regulators will be responsible for the same level of regulation as the FCA and can include:

• Securities and Exchange Commission (SEC) and the National Futures Association (NFA) in the USA
• Australian Securities and Markets Authority (ASIC) in Australia
• European Securities and Markets Authority (ESMA) in the European Union
• Autorité des Marchés Financiers (AMF) in France
• Comisión Nacional de Mercado de Valores (CNMV) in Spain
• The Financial Services Agency (FSA) in Japan
• The Securities and Futures Commission (SFC) in Hong Kong

This level of regulation should be considered the minimum when selecting a forex trading platform in order to ensure the correct levels of protection for you and your funds. This can be confirmed on the FCA’s own website, where they supply a register of all forex brokers in the UK who adhere to these standards.

Despite these regulations, it is crucial to understand that trading CFDs, FX, and cryptocurrencies comes with a high degree of risk, and providers are required to publish the percentage of retail investor accounts that lose money when trading CFDs on their trading platform.

How to choose the best trading platforms for forex

Trading forex has become accessible for all levels of experience, due in large part to the plethora of forex brokers and forex trading apps available. This is good news for retail investors who can take advantage of trading platforms in an increasingly competitive forex trading industry.

However, when considering any trading platform for forex and CFD trading, there are some key elements that you should take into consideration.

Regulation

As mentioned previously, the gold standard for regulation in the United Kingdom is the Financial Conduct Authority. It is always advisable to check that any of the forex trading platforms you are considering have this level of regulation. The best way to check this is via the FCA website, where there is a published list of FCA-regulated forex brokers.

Trading Costs:

Platform costs and trading costs can start to erode away at your gains, and it is therefore important that the UK forex broker you are considering is competitive in this respect. You will need to be aware of commissions and spreads.

Commissions are usually calculated as a percentage of the spread. The spread is the difference between the bid and ask prices of a forex pair. If the broker does not charge a commission, then it is worth checking the spread, as this is often where they will make their money.

Spreads are often depicted as a pip. A pip is the minimum unit of price change in forex. Look for a forex broker that has tight spreads.

Currency pairs offered

There are a vast number of currency pairs available, but not all UK forex brokers will offer all the pairs. The most common pairs trade with the greatest liquidity and include EUR/USD, GBP/USD, USD/JPY, and USD/CHF.

Trading platform

Check the reviews for CFD and forex trading platforms on sites such as Trustpilot to ensure the FX broker you are considering is reliable and trades can be executed with ease. Usability and layout are all important elements, as are tools such as automated trading options, strategy builders, and alerts.

A demo account offers an opportunity to get to grips with the platform before risking any of your own funds. Demo trading accounts will usually offer a sum of virtual money with which to trade.

Minimum deposit

Some forex trading accounts will support a low minimum deposit; however, other platforms will require a large minimum deposit. Due to leverage, the buying power is far greater than the minimum deposit, and therefore you should ensure you are aware of the minimum deposit and whether that is suitable for your trading requirements. This is especially true for beginner traders who may not wish to commit to a large investment amount.

Deposit and withdrawal times

It is wise to check the deposit and withdrawal policies on any given trading platform, as times and costs can vary significantly. Funding can often be done online using a credit card, ACH payment, PayPal, wire transfer, or bank cheque. Withdrawals are often done using cheque or bank transfer. Check the average withdrawal times as well as customer reviews to ensure the trading platform is operating within its published times.

Customer service

FX trading takes place 24 hours a day, five and a half days a week. Therefore, many brokers will offer 24-hour customer service so you can access help when you need it. However, this is not always the case and is therefore worth checking. Also check the method of contact the forex brokers are offering. These should include phone, email, and live chat.

Are forex brokers reliable?

There are many forex brokers on the market, and while some will be totally reliable, others are less so. This is why it is important to do your own research before selecting a broker to ensure you are dealing with a reputable company.

There are several factors to consider in order to ensure reliability, including:

• Regulation: Make sure the broker you are considering is regulated by a reputable financial authority. This will ensure that your funds are protected should the broker fail. The gold standard for regulation in the UK is the Financial Conduct Authority.
• Fees: Comparing fees charged can help prevent high fees from eating into your profits.
• Platform: Ensure the broker’s trading platform is user friendly and has all the tools to meet your trading needs.
• Customer service: Make sure you are supported with excellent customer service should you encounter any problems.

The brokers I have suggested above all meet these minimum requirements and have a good reputation.

How do I verify if a Forex broker is regulated in the UK?

Here are the steps on how to verify if a forex broker is regulated in the UK:

1. Go to the Financial Conduct Authority’s (FCA) website.
2. Click on the “Financial Services Register” tab.
3. In the search bar, enter the name of the forex broker or its FCA registration number.
4. If the broker is regulated by the FCA, it will appear in the search results.
5. The search results will also show the broker’s registration number, the date it was authorized by the FCA, and the type of permissions it has.

In addition, you should take the time to check the broker’s website: The broker should have a prominent statement that declares it is regulated. Regulation will also mean that risk warnings are clearly visible on the website.

Forex broker FAQs