Which is the Best Broker in the UK?
The best broker in the UK is Pepperstone. It is the lowest cost ECN broker, with spreads that average at 0.84 pips on the EUR/USD on its Standard commission-free account, and spreads as low as 0 pips (EUR/USD) on its Razor Account in exchange for a commission of 7 USD. Trades at Pepperstone are executed in less than 30 ms on 4 different trading platforms, including MT4, MT5, cTrader, and TradingView. This is alongside a wide range of trading tools, excellent education, and world-class market research materials. Negative balance protection is provided to all clients, and all funds are kept in segregated accounts.
Which Forex Broker has the Best Platform?
XTB offers xStation5, one of the best trading platforms in the industry. It is user-friendly, intuitive, powerful, and fast, and has many advanced features found in popular third-party platforms, like MT4. It offers a range of customisable charts, risk management tools, multiple order types, price alerts, and real-time performance statistics to evaluate your trading activity and identify areas for improvement. xStation5 also displays sentiment data on its dashboard so traders can view the percentage of traders who bought or sold particular instruments. Overall, traders will find that trading on xStation5 is a great experience.
Is Forex Trading Legal in the UK?
Forex trading in the UK is legal and regulated by the Financial Conduct Authority (FCA). The FCA requires all Forex brokers operating in the country to hold a valid license and adhere to strict standards, including:
- The provision of segregated trading accounts, which protects client funds from broker mismanagement or default.
- The provision of negative balance protection to ensure that client losses can not exceed the amount in the trading account.
- Client fund protection which includes higher margin close-out percentages designed to limit client losses.
- Effective fraud investigation processes and frequently published investment scam reports.
As well as the FCA, other top-tier global regulators include ASIC and CySEC. Whether you decide to use a broker regulated by the FCA or not, it’s important to remember that choosing a regulated broker is the best way to ensure your protection as a Forex trader.
Why is Regulation Important?
Regulation is essential for protecting your money and ensuring a fair and transparent trading experience.
When trading Forex, you want to be confident that your broker is operating legally and ethically and that your funds are being handled safely. Regulated Forex brokers must adhere to strict standards set by regulatory bodies, which include requirements for capital adequacy, segregation of client funds, and ongoing reporting and compliance. This means that your funds are protected, and your trading experience is fair.
Unregulated brokers are not forced to hold to the same standards. This can lead to a higher risk of fraud or unethical practices, which can result in financial losses for traders. Choosing a regulated Forex broker gives you peace of mind and security, knowing that your investments are protected and your trading experience is fair.
How are Forex Brokers Regulated in the UK?
In the UK, Forex brokers must be regulated by the Financial Conduct Authority (FCA), the regulatory body for non-banking financial services in the country.
Regulators supervise Forex brokers and other financial services companies to make sure they’re behaving ethically and within the law. Tier 1 regulators, like the FCA, have the best legal structure and enforcement mechanisms in the world, ensuring a clean market and the protection of participants.
The FCA has the power to take action against any Forex broker that is found to be in violation of its regulations, including revoking their license to operate. It has a register of firms that allows you to check that you are indeed using an FCA-regulated broker. The Authority warns that if a broker is not listed on its register, “it’s probably a scam”. The FCA also maintains a warning list of firms to avoid.
Scam Brokers and Reporting Regulatory Violations
If you are unsure about the reliability of your Forex broker, you can check our list of brokers to avoid. If you believe you have been scammed by your broker, the first thing to do is contact the FCA. You can contact the FCA’s complaints department here, and they can advise you on the next steps to take. We also have a report a scam broker form which we use to gather information so that we get the word out. Your personal details will not be shared externally.
Do I Need a Broker to Trade Forex?
Yes, you will need a broker to trade Forex. Connecting traders to the Forex market is an expensive and technically complex business. Most Forex brokers form a bridge between the global Forex market and Forex traders; these are called market makers. Market makers buy up large trading positions from the Forex market, which they sell to traders in smaller trade sizes.
Other brokers act as a go-between, taking orders from traders and sending them straight to the global Forex market. These are called ECN brokers or DMA brokers. Both types of Forex brokers require a lot of money to set up and need teams of highly qualified technicians to maintain their trading platforms.
How do Forex Brokers Make Money?
Market markers only make money from the spread – the difference between the buying and selling price of the currency pair. These brokers will be the counterparty to any trade, so they make money when clients lose trades.
ECNs have tight spreads but make money from commissions, which are charged whenever a trade is opened or closed. This type of broker makes money whether a client wins or loses.
Which Forex Brokers are Best for Beginner Traders?
The best brokers for beginners are well-regulated and have no minimum deposit requirement, ensuring security and a low cost of entry. Also important are low fees and negative balance protection, as these both help to lower risk. Responsive and knowledgeable customer support is essential. Customer service should be available 24/5 via email, live chat, and telephone, though 24/7 is better. Last but not least, beginners should look for a broker with a high-quality education section; this should feature articles, video tutorials, frequent webinars, advanced trading strategies, and chart analysis.
For more detail and to see which brokers we recommend for new traders, check out our dedicated page on the best brokers for beginners.
Which Forex Brokers have the Best Demo Accounts?
The brokers with the best demo accounts understand that beginners should not be forced into trading real money and that experienced traders should be able to test strategies as long as they want to. So the best demo accounts are not time-limited and replicate real market conditions as closely as possible. Beginners looking for a demo account will want a broker with good education, so they can learn about Forex trading as they practice.
For more detail and to see which brokers we recommend for demo trading, check out our dedicated page on the best demo accounts.
Which Trading Platforms do the Best Forex Brokers Offer?
The best Forex brokers generally offer Metatrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. These are third-party trading platforms which you can install on your computer. They are fully customisable and have advanced charting tools, research tools, and options for automated trading or copy trading. Some brokers also have their own trading platforms, which are usually accessed via a browser or on your mobile phone. For more details on trading platforms and how they work, check out our guide on trading platforms.
Forex Risk Disclaimer
Trading Forex and CFDs is unsuitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. Forex and CFD transactions involve high risk due to the following factors: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. Regardless of how much research you have done or how confident you are in your trade, there is always a substantial risk of loss. (Learn more about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).
Our Rating & Review Methodology
Our State of the Market Report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers.
Editorial Team
Chris Cammack
Head of Content
Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.
Alison Heyerdahl
Senior Financial Writer
Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.
4.49
Accepts UK Clients. Average spread EUR/USD 0.90 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA. 76% of traders lose money with this provider.
