The United Kingdom is and has been for quite a while, the biggest Forex trading country in the world. In fact, it surpasses everyone by quite a margin. There are about 280,000 Forex traders in the whole country, which is absolutely insane. To give you an idea, that would mean, that one in every 164 internet users in the UK would be a Forex trader, giving the UK the largest amount of Forex traders than any other European country. The numbers are truly impressive and show us how much dedication the UK government and the brokers themselves have shown.
If there are so many people from all sorts of backgrounds, types, and occupations getting into Forex, then logic would say that it’s really something of high quality, and something that a lot of people would think makes sense to do. Indeed, that is so. Over the years, the UK has essentially perfected its Forex market. Thanks to some of their biggest strengths like the high quality of brokers due to the existing regulations and the regulatory environment itself, UK has solidified itself as the “king of all Forex markets”.
Are you a UK citizen looking to start off your Forex journey, and making your research before you begin? Do you want to find out what you can expect in general from the market, who are the legal entities involved, and what you should trade on to reach success? If so, then you will love our guide! This guide was written in mind for the “average trader”, meaning that no matter what kind of goals you have, whether you want to earn big or small, or whether you want to earn via currency trading or something else like gold, you can be sure that you will be armed with the best knowledge on how to choose your broker to start trading with.
Our best UK Forex brokers list
If you want to get straight to the “good stuff”, we understand! Here is our list of what we have found to be the best Forex brokers for the UK market. As you already know, UK is the world’s biggest and most prestigious Forex market, so obviously there’s going to be tons of different brokers, and many of them are all going to look the same.
\For an average beginner, it’s not all that easy to determine which particular broker is going to be the best of them, as there are many things to take into account; things that may not be all that easy to understand for the beginners. That’s why we came up with this list, which was based on important details like your safety and security, and various benefits that you can get from each broker. We encourage you to take a look at all of the brokers listed below, and find the one that fits your needs the best!
FCA, CySEC, IFSC, ASIC, DFSA
MT4, MT5, WebTrader
ASIC, FSA, FSCA, FFAJ, FSRA, FSC
FCA, ASIC, CySEC, FSCA, FMA, MAS
WebTrader, Windows 10 Trader
CySEC, FCA, SFSA
NFA, CFTC, FCA, FSA, IIROC and CIMA
WebTrader, MT4, MT5
MT4, WebTrader, Copykat
Forex regulation in the UK
Now, having the world’s biggest and best Forex market in your care is not something that can be called easy. Not even close. To make sure that such a market remains well-functioning, profitable, and most importantly safe and secure, there is a need for very effective regulation. This is exactly why the UK happens to have one of the most, if not THE most, respected Forex regulation in the world.
Throughout the years, UK has shown the world what an effective Forex regulation looks like, the one that not only allows the brokers and traders to trade as much as possible, but the one that essentially guarantees the safety of traders, and provides the brokers with best possible conditions to conduct their business.
Financial Conduct Authority
The main regulatory body for the UK Forex market is FCA, short for Financial Conduct Authority. We say “main” regulatory body, and not the main “government” regulatory body, because FCA is actually not operated by the government, but is a completely separate entity operating on its own. FCA was formed only recently, back in 2013, but it was actually operating under a different name, as “Financial Services Authority”, which, in 2013, reformed into FCA that we have today.
As mentioned, FCA is one of the most highly-respected authorities in the world. Why? Because they have delivered real results while having the responsibility to regulate the biggest Forex market in the world.
The main responsibilities of FCA are actually quite big and diverse. Not only is their purpose to protect the traders and consumers as much as possible from all the financial frauds and scams, but their goal is to ensure a healthy, balanced, and fair competition between the brokers, and create as many conditions for the market to prosper as possible.
FCA’s respect comes from not only the fact that they have been so effective in their implementations and executions of their laws and regulations but also how consistent they’ve been in doing so. Ok, so we understand that FCA is great and all that, but how exactly? What specific results can we observe, and what are some of the examples of what they’ve been doing to take the safety, security, and effectiveness of the UK Forex market to the next level?
First and foremost, FCA demands that every broker offering financial services to the US traders should have a license from FCA. The license is only given to the brokers that FCA deems worthy. To obtain a license, the broker has to go through some requirements and satisfy certain standards. These standards can be various, and they are all aimed at ensuring that the broker is reliable and capable of providing the service on a sufficient level, to ensure the safety of the trader, as well as maintain the quality of the service. There are many types of requirements that the broker has to go through to be license-worthy, so let’s go ahead and discuss them separately.
Minimum capital requirements
To obtain a license, the broker has to have a certain amount of minimum capital, and the amount depends on what type of license the broker is looking for. Yes, there are several types of licenses that the brokers can apply for, and they all have specific requirements. Let’s quickly go over them now:
- Dealer license: This license can also be referred to as “market maker” by many, and is the most expensive one of the three. The minimum required capital for the obtainment of this license is €730,000.
- Intermediary license: This license is mainly for the STP (Straight Through Processing) brokers, and the required capital is €125,000.
- Restricted broker license: This particular license doesn’t allow the brokers to hold the clients’ funds. Rather, they can only market and sell them financial products. The minimum required capital for this license is €50,000.
All of these licenses have their own benefits and uses for their respective brokers. Depending on their goals and requirements, the broker can choose which license to go for. We won’t delve into too much detail as this is not all that relevant for you, the traders, but to get an idea, the difference between these licenses is what kind of additional functions and uses each one “unlocks” for the broker. As an example, the dealer and intermediate licenses allowed the brokers to let their clients invest in CFDs. Although it should be noted, that CFDs were actually banned since 2019 by the FCA.
Segregated bank accounts
As the FCA mandates, each and every broker is obligated to hold the funds of their clients in segregated bank accounts, separate from the ones where they have their own operating capital. This is one of the most effective strategies in ensuring the safety of traders and clients. Why? Because it prevents the brokers to misuse your funds or make them prone to danger in any way.
Additionally, if the broker goes bankrupt, or loses the money in some other way, your funds will not be in danger, as they will be in the segregated account. Although FCA was one of the first regulators to implement this rule, it’s not exclusive to the UK and is a common practice across many different Forex regulatory bodies. It’s just one of those things that give you a big extra layer of security and gives you peace of mind that is always much appreciated.
Reports and audits
One of the main ways in which FCA manages to keep a track of the brokers’ activity is by demanding mandatory audits and reports from the brokers. This is very common practice with all Forex regulators in the world, and one of the best ways to keep the activities of the broker transparent, to make sure that they’re conducting their business in a fair and reasonable way, maintaining the safety and security of the traders. These audits and reports can be of different nature. The brokers have to submit all sorts of information, as the more information the FCA has, the more improvements can be made.
As an example, all brokers are required to submit financial statements, disclosing their full financial activity throughout the month. This lets the regulators ensure, that the broker is not misusing any funds, is not running any money laundering schemes, and is not covering up any unfavorable states that it may be going through, which itself can negatively affect the financial condition of the traders.
Assurances of qualifications
FCA’s goal is to ensure that every broker that is allowed to offer financial services to the UK consumers is able to satisfy the minimum standards of quality that they deem necessary. These very requirements that we just discussed all play into that to a degree, but FCA also has a more direct approach towards this issue.
Firstly, for a broker to get a license, they have to provide a very detailed, extensively, and meticulously written business plan. This business plan should describe everything relevant in detail so that FCA can know where the would-be broker stands.
Additionally, FCA requires the licensees to provide all the relevant information about the directors, managers, and other important personnel that would be involved in managing the company and making important financial decisions. As you can see, all of these requirements are geared towards making the broker’s activity more risk-free and safe, thereby increasing the safety of the traders. What FCA is looking for here, is to ensure that the quality and standard of the company’s management is as high as possible, as this is in the best interest of the traders themselves.
Limits on leverage
While high leverage can sometimes be amazing for specific traders, and it’s what many people are looking for in their new brokers, in many cases, high leverage can be extremely detrimental. In most cases, actually, as there are not a whole lot of people who have the necessary know-how to make proper use of it.
It is because of this that FCA has put a limit on these unrealistically high leverages, which can be something like 1:1000, and in some cases, much higher.
Prioritizing clients’ well-being
FCA’s goal is to always look out for the best interests of the traders, and FCA itself is obligating the brokers to do so, and demanding that the brokers never look for improving their condition at the expense of the clients’ well-being. As an example, manipulative and malicious trading strategies like opening positions opposite to the clients are strictly prohibited, and subject to serious punishment.
Additionally, brokers are prohibited from making any unrealistic predictions and promises to their clients with the goal of enticing them to make risky decisions which they otherwise won’t have made. These were only a few examples, but you can probably get an idea. The point is, the brokers are carefully controlled and observed by the FCA, who is always making sure that these brokers are conducting their business in an ethical manner.
What options for trading do the UK based Forex brokers offer?
By now, it shouldn’t come as a surprise to you, that as the number one Forex country, UK has one of the best Forex trading environments in the world. Whether you are happy with the variety and diversity of options, or it is that feeling of safety and security that you are looking for, you can be sure that you won’t be left disappointed.
The UK Forex market is a particularly great environment is for currency trading. The GBP is among the top strongest currencies in the world, in the same league as the USD and EUR, and therefore, with the UK market being as strong as it is, the GBP trading is at its highest. This has been more magnified than ever after the UK left the European Union. Although initially falling down significantly, the GBP has since then recovered, and the currency trading in the UK has gone to new heights since then. Now there are more traders in the UK than the rest of Europe combined, with the actual number of online traders in the UK being close to 750,000.
The pound has always been a very strong currency, as it has the UK’s very strong economy behind it. The UK was never known for some gigantic bursts of economic growth, but it has always had a continuous and steady economic progress, which resulted in becoming a very attractive destination for international investments, as well as advancements in the key industries like banking, finance, pharmaceuticals, and more. It is because of these reasons that GBP is currently one of the strongest currencies in the world, is the fourth most traded currency, and the third most widely reserved currencies in the world.
Therefore, if you are looking to get started with trading in the UK, and want to get involved with this amazing and beautiful market, it would be a waste not to take advantage of the great currency trading opportunities in the UK. Here, you can trade on any combinations of USD/GBP/EUR, as well as a decent choice of other “exotic” currencies as well.
What other commodities are available?
If currency trading isn’t really your thing, and you want something more solid and dependable, then you can go ahead through a huge list of options of currencies to trade on.
Gold is one of the most popular and sought-out trading commodities in the world. Throughout the years, it has continuously managed to stay this popular and be one of the most attractive commodities in the world, and it has only been increasing in popularity with no end in sight. For many people, they don’t even view it as a commodity at this point, but as a currency.
In the UK, Gold trading is in a really strong spot right now. The country is the fifth-biggest gold exporter int he world, with yearly exports of around $15.6 billion. This is about 4.6% share of the world’s gold exports in 2019, which is quite impressive, considering the numbers weren’t this high in the past, and only increased within last year, which resulted in a lot of traders making a lot of money. Experts are still quite hopeful about the UK’s gold market, so if you want to get in on the profit, don’t waste your time and begin today!
Gold is hardly the only precious mineral that the Brits love to trade. Platinum is also very popular in the UK, and thousands of people trade on it every single day. The market conditions are really great for platinum, as the country holds second place among the largest platinum-exporting countries in the world, having a 20.1 market share.
These high numbers from the UK are especially impressive when you consider the fact that many historically strong platinum exporters like Switzerland and Belgium have seen a large decline in their platinum exports, while UK’s figures have not only stayed strong but have steadily increased.
Although not on the same level as the gulf countries, for example, the UK’s oil market is nothing to sneeze at. It’s currently the 15th biggest exporter of crude oil, which is about 2% of the world’s total oil export volume.
Despite representing a small share of the whole trading activity in the UK, if the oil is what you’re interested in, you can be sure that you will still have the best possible trading environment for oil in the UK, as a huge number of world’s top brokers are operating in the UK, and they have amazing trading opportunities for most commodities, and oil is top among them.
Which one should you go with?
This list is definitely not exhaustive, as there are tons of more commodities that are available for trading on the UK market. The great thing is that the brokers from our list are all very experienced, and have been offering some great diverse options to the market for a while now, so if you are looking for a particular type of commodity to trade on, then you can be sure that our brokers will be more than up to the task to provide these opportunities. Now, which one should you go for?
This is a very common question that we get, and frankly, there is no specific answer that we can give. The thing is, it all depends on what exactly you are looking to get out of your trading endeavors in the first place. Are you looking for high risk-high reward trading experience, where your commodity is highly volatile but can allow you to possibly earn more? Or is it more stable, slow and steady approach that you’re looking for? Once you decide on what exactly your goals are, then you will be much better-geared to make your choice.
All of these commodities are different in their own way, but what you may have noticed that almost all of them have in common, is that they have all shown a sizeable and a substantial amount of growth. This means, that you can definitely count on the UK market to perform well, at least from what the history has shown us. The truth is, the UK has a really strong market, and it’s all a combination of the many things that it’s able to perform at really well.
So, what can we say about the UK Forex market?
The UK has been the leading Forex country for many years now, and it seems that it will remain so for many more years to come. As you learned yourself in this guide, the reasons for UK’s massive success are a combination of many central things, such as a very effective regulatory environment, the strong economy of the country and subsequent strong currency, and availability of some of the best Forex brokers in the world.
With these things in place, it’s easy to see why the UK would be the best Forex country in the world. If you are a UK citizen looking to take advantage of the amazing opportunities that your country offers for the Forex trading, or if you’re simply a citizen from another country interested in checking what all the hype is about, you can rest assured that the hype is indeed real and that there are tons of opportunities waiting for you with the UK based Forex brokers!