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Best Forex Brokers: Top 3

Choosing the right forex broker is essential for successful trading. Forex brokers, which cater to traders looking to speculate on currency movements, are evaluated based on several critical factors. When selecting a forex broker, consider the following aspects:

Service:

Excellent customer service is vital in forex trading. The best brokers provide dedicated account managers who can offer personalised advice and support. Building a relationship with your broker can enhance your trading experience and strategy development.

Trading Costs:

Competitive spreads and low commissions are crucial. Look for brokers that offer transparent pricing and minimal hidden fees. This can significantly impact your profitability, especially if you trade frequently or with large volumes.

Platform and Tools:

A robust trading platform with advanced tools and features is essential. Ensure the broker provides a platform that suits your trading style, whether it’s MetaTrader, cTrader, or a proprietary system. Look for features like charting tools, automated trading capabilities, and mobile access.

Research and Education:

Quality research and educational resources can help you make informed trading decisions. The best brokers offer comprehensive market analysis, webinars, tutorials, and up-to-date news to keep you informed about market movements and trading strategies.

Regulation and Security:

Ensure your broker is regulated by reputable financial authorities such as the FCA, ASIC, or CySEC. Regulation provides a level of security for your funds and ensures the broker adheres to industry standards. This is crucial for protecting your investments from fraud and ensuring the broker’s financial stability.

Reputation:

Research the broker’s reputation within the trading community. Look for reviews and ratings from other traders to gauge their reliability and performance. A broker with a strong track record and positive feedback is more likely to provide a trustworthy service.

UK’s Best Forex Broker List

We have listed the top 3 brokers based on our industry knowledge and our own due diligence. Please note the link to eToro is a partner referral link that grants us a referral fee. This is how we make money and we only feature vetted brokers who have passed our tests.

eToro – Leading Social Trading Platform

eToro is widely recognised as the top choice for social trading. Founded in 2007, eToro allows traders to copy the trades of experienced investors, making it an excellent platform for both beginners and seasoned traders. The platform supports a diverse range of assets including forex, stocks, and cryptocurrencies, and provides a user-friendly interface along with robust mobile apps.

eToro’s standout feature is its CopyTrader system, which enables users to replicate the trades of top-performing traders. Additionally, the platform offers educational resources, market analysis, and community support to help traders improve their strategies.

IG – Comprehensive Trading Experience

IG, established in 1974, is one of the most reputable forex brokers globally. The broker offers an extensive range of trading instruments, including forex, commodities, indices, and more. IG is known for its excellent trading platforms, including the proprietary IG platform, MetaTrader 4, and L2 Dealer for advanced traders.

IG excels in providing quality research, educational resources, and a variety of trading tools. The broker is regulated by multiple top-tier authorities, ensuring a high level of security and trustworthiness for traders worldwide.

Pepperstone – Best for Low-Cost Trading

Pepperstone, founded in 2010, has quickly become a favourite among traders for its low-cost trading environment and fast execution speeds. The broker offers a variety of platforms including MetaTrader 4, MetaTrader 5, and cTrader, catering to different trading styles and preferences.

Pepperstone provides competitive spreads, low commissions, and a range of tools for automated and social trading. The broker is regulated by the FCA and ASIC, ensuring a secure trading environment for its clients.

Why stick to ECN/ STP Brokerages

CN/STP brokerages, are also known as No-Dealing Desk brokerages. These brokerages simply act as agents for their clients either passing trades straight through to their liquidity providers (known as Straight-Through-Processing) or are matched up with other traders using the brokerages ECN (Electronic Communication Network.ECN/STP brokerages are preferred by many traders, as this execution model allows a brokerage to make a profit regardless of whether a trader is profitable or not. This is due to the fact that the brokerage never takes the other side of a client’s trade and simply passes the risk onto a liquidity provider or trading using the firm’s Electronic-Communication-Network (ECN) – this is known as ‘A-booking’ a client’s trade.

Market Makers or Dealing Desk brokerages in contrast do not pass all trades onto liquidity providers or other traders, but on occasion take the other side of trader’s position (this is known as ‘B-booking’ a client). This can often mean that the brokerage’s profits are equal to the trader’s losses. This is thought to introduce an unpalatable conflict of interest, which many traders believe could lead to brokerages using manipulative tactics to remain profitable. There is no such conflict of interest with genuine STP/ECN brokerages, with the brokerage making profit by marking up the spread or charging commission. In fact, ECN/STP brokerages want traders to profit, with traders continued business allowing the brokerage to continue to profit from the spread mark-up/commission charged.

ECN/STP brokerages are also favoured by traders, as these firms often able to offer more competitive spreads. Market Makers typically offer wider spreads as this is one way in which they can manage risk, though this is not true of all Market Makers.  ECN/STP brokers pass many trades onto liquidity providers who are able to offer very tight spreads due to the huge volumes they are dealing in, meaning under standard market conditions spreads tend to be much tighter.

Brokerages that operate an ECN can often go a step further and allow traders to benefit from Spreads starting at 0 pips, with the brokerage matching up traders who want to take opposite positions in a particular instrument. These brokerages then profit by charging the traders involved commission for taking advantage of the brokerages Electronic-Communication-Network (ECN).

More Good Brokers

While I think it’s best to use one of our top three brokers, there are more recommended options for traders in the UK.

Saxo Bank – Advanced Trading Platform

Saxo Bank, founded in 1992, offers a comprehensive range of trading instruments including forex, stocks, commodities, and more. It is particularly well-suited for advanced traders due to its powerful SaxoTraderGO and SaxoTraderPRO platforms. Saxo Bank provides competitive spreads and extensive market research, along with robust risk management tools. The broker is regulated by top-tier authorities such as the FCA, ensuring a secure trading environment.

CMC Markets – Extensive Range of Offerings

CMC Markets, established in 1989, is a well-regarded forex broker known for its extensive range of trading instruments and strong emphasis on education and customer service. The broker offers a user-friendly platform with advanced charting tools and competitive pricing. CMC Markets is regulated by the FCA and is publicly traded on the London Stock Exchange, providing an added layer of credibility and security.

XTB Online Trading – Best for Low Costs

XTB Online Trading is recognised for its low-cost trading environment and robust platform offerings, including xStation 5 and MetaTrader 4. The broker provides a wide range of educational resources and market analysis, making it an excellent choice for traders of all levels. XTB is regulated by the FCA and other top-tier authorities, ensuring a high level of security for its clients.

London Capital Group – Ideal for Beginners

London Capital Group (LCG), established in 1996, is an excellent choice for beginner traders due to its user-friendly platform and comprehensive educational resources. The broker offers a broad selection of CFDs and spread betting instruments across various asset classes. LCG is regulated by the FCA, providing a secure and trustworthy trading environment for its clients.

Only Regulated Brokers, Please.

I’d definitely recommend sticking to FCA recommended brokers!

FX trading is MURKY WATERS (more on that below).

For starters I’ve compiled a simple a list of brokers to choose from:

FX BrokerRegulated by FCAFCA Authorisation Number
Pepperstone684312
OANDA542574
eToro583263
Plus500509909
IG Group114059
CMC Markets173730
Saxo Markets551422
City Index113942
XTB522157
FXCM217689
AvaTrade504072
Tickmill717270
Exness730729
Admiral Markets595450
SpreadEx190941
FxPro509956
Interactive Brokers208159
Forex.com113942
Eightcap750337
ThinkMarkets629628
ATC Brokers494067
Blackwell Global688474
Equiti528328
Vantage FX590299
Infinox501057
Capital Index709693
HYCM186171
LCG182110
Alpari448002
Markets.com523821
ActivTrades434413
ETX Capital124721
FP Markets747755
AxiTrader509746
Pepperstone UK684312
Darwinex586466
IC Markets827481
OctaFX909958
TeleTrade760923
XM705428
ATFX760555
Trade Nation629628
FBS771683
Windsor Brokers616041
GKFX501320
IronFX585561
Orbex553071
LegacyFX763707
ROInvesting725246

Should I consider using a non-regulated FX broker?

Regulation is seen by many as adding to a brokers credibility, and this is reflected in the fact that many Forex brokers are keen to point out their regulatory pedigree. Despite this many brokerages choose to operate without being regulated, opting to establish themselves in an offshore jurisdiction where the provision of FX trading services is not regulated.

One of the main reasons that a number of FX brokerages choose to operate without being regulated is that doing so can significantly decrease the brokerages total operating costs. Gaining and maintaining a regulatory licence can be very costly and it has been estimated that the costs of maintaining a FCA licence can run into the millions. Capital requirements set out by regulatory frameworks such a MiFID (For European Forex Traders), can constitute a significant barrier to entry for new brokerages who are simply unable to raise the required capital. In fact there have been a number of instances where new brokerages have operated as unregulated entities for a year or two, until the firm was able to face the costs of regulation. Additionally, as the majority of unregulated brokerages base themselves in offshore tax havens they are able to reduce their tax burden significantly which is another prime reason brokerage opt to continue as an unregulated entity.

Another reason why brokerages choose to operate without regulatory oversight is that this allows firms to offer a different product range or to cater to customers they wouldn’t be otherwise able to serve. A good example from circa 2012 would be FXCM, who once launched an unregulated subsidiary FXCM Markets. This has allowed FXCM Markets to offer up to 400:1 leverage and interest paying accounts to their clients, which are unavailable at the firms regulated subsidiaries. It should be noted that FXCM Markets doesn’t exist anymore.

The biggest issue is that not all unregulated brokerages choose to operate unregulated for legitimate business reasons, with some firms opting to operate from offshore locations in order to take advantage of their clientèle. There have been a number of instances where unregulated brokerages most often based offshore have engaged in fraudulent behaviour or rogue practices which have ended up costing there customers significantly. For example fx broker 4XP who closed up shop without returning client funds. The fact that 4XP was unregulated has left customers with little recourse and has left a number of traders having to accept significant losses.

Scalping and relevant brokerages

When Forex traders talk about scalping or scalping strategies they tend to be referring to trading strategies which see traders enter into positions for only a short period of time. It is for this reason that scalping is sometimes also referred to as quick trading. Most scalpers do not keep positions open for any more than a few minutes, there is however no formal definition of what constitutes scalping.

Scalping as a trading strategy is particularly popular among spot FX traders who are able to use the ample amounts of leverage on offer to potentially make impressive returns from even small movements in the price of a currency pairing. Supposing a trader opens a one Lot position in the EUR/USD could make a $50 profit from just a 5 pip move in their favour. Of course if the market moved the other way a trader would be out of pocket for same amount.

Occasionally, the term scalping is used to refer to other things than quick trading. Scalping can be used to describe certain types of arbitrage trading and can also be used to describe certain forms of market manipulation. However, scalping is most commonly used to describe any type of trading which seeks to profit from quick momentum trades.

Not all brokerages take a favourable view of scalping, with some brokerages looking to limit or ban traders from using scalping strategies. Brokerages which place limitations on scalping, tend to be operating using a Market Making model and may not be able to adequately hedge the risk posed by traders who are engaging in scalping. Though again there are a number of brokerages who operate as Market Makers who are more than happy to accept the trading activity of scalpers with no limitations. There be a number of other reasons why a brokerage may take a dim of view of scalping-

Why Do Brokerages Ban Scalping?

Brokerages that ban scalping will more than likely operate using some kind of Market Maker model. While STP/ECN brokerages place all of their customer’s trades with a liquidity provider or with another trader or institution, market Makers do not necessarily place customer’s trades in the underlying market. Instead these brokerages will either take on the risk themselves acting as a counterparty or alternatively hedge using a particular risk management model. Not all Market Makers ban scalping in fact there are a number of Market Makers that provide their clients with a high level of service.

Bucket shops are like market makers in the sense that they don’t necessarily place client trades in the underlying market. But unlike legitimate market makers, bucket shops will rarely if ever engage in any form hedging or risk management. In order to be profitable the customers of a bucket shop must lose more money overall. Banning or placing limits on the use of scalping strategies is just one way in which these brokerages can ensure they remain profitable. Rather than outright banning all scalping activity these brokerages place rules which make very difficult to profit from the use of scalping strategies. Forcing traders to keep positions open for a set period of time is one classic move which prevents a trader from closing a position if the market moves against them. Brokerages which place such limits should be avoided.

Brokerages that have a delayed or lagging price feed will often prevent traders from using scalping strategies. A delay of even a second could open the brokerage up to significant arbitrage opportunities.  Traders could monitor a more up to date price feed and when an instrument moves significantly in one direction place a trade with a brokerage before their price feed had caught up, locking in guaranteed profits. Brokerages in such a position have no choice but to ban scalping as they could be taken to the cleaners. This is not to say that these brokerages should be excused in the day and age of fibre optic broadband there is no excuse for a brokerage to have a significantly delayed price feed.

Importance of Tight Spreads

While it is always important to look around for competitive spreads, scalpers should be particularly interested in the spreads on offer at the brokerages they are considering. With scalpers often only looking to take advantage of 5-10 pip movement, significant spreads can seriously eat into profits/increase the extent of a traders losses. While Spreads are one important factor for traders to consider, traders should also take a number of other factors into account.

Execution/Slippage & Liquidity

The quality of execution is also vitally important for those looking to scalp the FX markets. Slippage can seriously damage the performance of a scalping strategy and while some slippage is to be expected, it is vitally important that the brokerage can execute and close your orders with little slippage. Often the quality of execution will be dependent on the pool of liquidity that the brokerage has access to, which means its worth doing some research to find out what other traders think of the quality of the brokerages execution.

Risks involved

Many are attracted to scalping strategies, as the idea that you can get in and out of trades taking a small profit sounds both plausible and attractive. It should be noted that scalping can be risky, as it can only take one wrong decision to wipe out all the gains you made from successful scalps. Many scalpers don’t have a clear idea of why they are entering into a particular trade and fail to set stop losses. It is often said that scalping is one of the riskiest trading strategies to adopt, and this is in part down to traders use of excessive leverage which can really work against traders if risk isn’t managed correctly.