Online Forex Brokers
Here is a list of the best online UK forex brokers. They are all licensed and legal and offer a high level of trading platform, service and reliability.
How to Choose the Best Online Brokers
Ask any avid forex trader what is the most important decision he made in his trading career and he will most likely say: choosing a broker. Choosing the right broker can impact the cost of your trading, but also your success in this world. As a result of the large number of new services popping up online every day, many new traders are finding it difficult to recognize the right platform to trade with. In order to help you identify the best forex broker for you, we have put together a simple guide to help you in your selection process. So when looking at the various forex trading platforms available to you, start by checking the following issues.
To start off, you will need to know if the broker in question is regulated or not. If it is regulated, you need to verify the relevancy of the regulating body. Some brokers may claim that they are regulated or authorized, but it may turn out that the regulating body in question is regulating them for an entirely different matter, such as the incorporation of the company. US based fx brokers, must be registered with the National Futures Association (NFA) or Commodity Futures Trading Commission (CFTC). For Europe, the service must be registered with a financial regulatory body such as the Cyprus Securities Exchange Commission (CySEC) or the U.K’s Financial Conduct Authority (FCA). If the broker that you are reviewing is not registered with any relevant regulatory body, then you should think twice before opening a trading account with them. Regulation gives you a level of protection. Primarily it means you are protected under the Investor Compensation Fund for up to 20,000GBP should the broker become insolvent. It also means that it has proved a level of capitalization and is following the regulators often stringent guidelines.
Another important issue to consider is the minimum deposit. If you are just getting started and don’t want to risk too much capital, try to go for a broker that allows you to start off with a relatively low deposit. £100-200 is considered a relatively low deposit, but you can find even lower minimum deposits available.
Assets and Instruments
Before you make a choice you must check if the trading platform offers the currency pairs that you are interested in. If you are looking to trade with the EUR/USD currency pair then chances are that most brokers will have this pair on offer. However if you’re looking to trade with a less popular pair, you will probably have to look harder to find a platform that has the pair on offer.
Another important issue is the instruments. Online brokers offer various instruments to facilitate the forex trading activity. CFD, binary options, vanilla options and forward contracts are just some of the instruments on offer. Each instrument has its own characteristics and fits different types of trading and traders.
The trading cost or spreads which a trader has to pay can easily accumulate into a substantial sum over a period of time. As such, it should be a major consideration when you choose a broker to work with. Lower spreads will lower the cost of your trading activity. However, you should also consider the spreads type. There are 2 types of spreads. They can either be fixed or variable. Fixed spreads will remain constant throughout trading while variable spreads will fluctuate within a range depending on the prevailing market conditions. While variable spreads are generally lower, the predictability of fixed spreads allows you to plan your decisions better.
Depending on your trading style, you might also want to see how much leverage a broker is willing to offer you when you open a trading account with them. While the more leverage you have, the more you can extend your limited trading capital, you should also bear in mind that your losses can also be multiplied by the amount of leverage utilized by you.
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