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    Home»Business»How Do I Choose the Best Forex Broker in the UK?
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    How Do I Choose the Best Forex Broker in the UK?

    Editorial TeamBy Editorial TeamJune 19, 2023No Comments6 Mins Read Business
    Forex Broker
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    The United Kingdom is the 5th largest economy in the world and the global financial hub for providing financial services to the rest of the globe.

    The UK’s many reasons for becoming one of the biggest financial hubs include its central location, comparatively relaxed regulations, convenient time zones, and generous tax laws.

    The UK policies and regulations present a robust, business-friendly environment and a reliable place to expand trade and investment.

    In addition, the country has the most stable legal environment and well-established diplomacy and influence, built on the UK’s political, business, and cultural strength.

    As a result, the UK is an excellent option to start a business or consider trading at the international level.

    The Forex (foreign exchange) market is a massive market conducting colossal volumes of trade every day, turning over 5 trillion dollars (USD) per day to be accurate.

    The Forex market is the world’s largest business place offering 24-hour trading options, five days a week, and very popular due to its easy accessibility.

    Despite its massive size, there is no central exchange platform to conduct their transactions in a forex trade. Forex trading is done only through forex brokers who are in thousands of numbers all over the country. Choosing the right forex broker is a real challenge as the broker should meet your trading needs.

    Before diving into the topic of the best forex brokers in the UK, let me give you a brief introduction to simple and less risky trading strategies for newcomers.

    Table of Contents

    • Forex trading strategies for beginners:
    • The three best forex trading strategies for amateurs are as follows:
    • Proper regulations and approvals:
    • Trading platform and software functionality:
    • Trader’s commission and spread prices:
    • Forex broker’s business model:
    • Conclusion:

    Forex trading strategies for beginners:

    The Forex industry is no stranger to fraud, scams, and loss, but certain risk factors are considered and taken in this business to make profits.

    There are hundreds of trading strategies in the forex market, and choosing the simple and right ones can help you build the necessary traits to master the forex trading platforms.

    Forex Broker

    The three best forex trading strategies for amateurs are as follows:

    • The Breakout trading strategy: The objective is to enter the forex market when the trading comes out of the preceding range. The prices may seem to rise or fall more than the resistance level before, and the trader accordingly buys or sells, hoping for his expected outcome.
    • The Carry Trade strategy: This strategy aims to take advantage of the interest rate differential that emerges between any two country’s currencies. The trader can make a little extra profit by selling that country’s currency having a lower interest rate and buying the country’s currency that has a higher interest rate.
    • The Position Trading strategy: The concept involved in this strategy focuses on long-term positions that take weeks or even years to get returns. The trader plays it relatively low and concentrates on the bigger price movements to gain some profits that last longer periods.

    The primary vital factors to consider while choosing the best forex broker in the UK are:

    Proper regulations and approvals:

    The first thing to focus on while choosing a forex broker is whether a genuine regulatory agency or body approved him. Only with the regulatory confirmation can we clearly know that the broker has met all the regulator body’s operating standards set in the country.

    Moreover, the regulations will be the only lifesaver when the trading body dissolves as they will provide fund protection to safeguard the client’s funds.

    Trading platform and software functionality:

    Trading platforms are the only visual confirmation of the forex market, and the platform should be a reliable one, unlike many fake and insecure applications circulating in the market. The broker offers a list of trading platforms to choose from, has their own platform, or provides a third-party application.

    The safest trading platform is the one in which the trader has proprietary rights, as they are designed specifically for the broker’s client base. Some of the forex trading platforms include IG Markets, eToro, CMC Markets, FXTM, Plus500, Forex.com, and AvaTrade. The eToro platform is the best forex trading app in the UK due to its stable features and easy-to-use software.

    Trader’s commission and spread prices:

    Brokers in any business field will keep a substantial gain for themselves and then only allow forex trading to their clients. People get fooled by brokers when they advertise no commission fee because this financial industry operates on spreads rather than commissions.

    The three types of trading costs charged by the broker are as follows:

    • Fixed spread: The spread fee will be known to the client before the trade itself, and there will be no change after the transaction is complete.
    • Floating spread: The spread charge is variable and subjected to market volatility. So, the user cannot know the exact amount before trading.
    • Commission fee: The commission fee is calculated as a part of the broker’s spread (in percentage). The client should be aware of the amount before trading on the platform.

    The trader can choose the right forex broker that meets all his trading needs and preferred trading choices (small or large spread).

    Forex broker’s business model:

    The trader may come across terms like NDD, STP, and ECN in the broker’s trading documents. These terms indicate the broker’s business model and how he will operate the forex strategies and transactions.

    The two major methods by which the brokers operate are:

    • Dealing Desk: The forex dealer will process their client’s trading instructions through a dealing desk employed in the company. The dealing desk broker makes the initial trading transaction when you open a position like the EUR/USD, and then only you are exposed to that trade. 
    • Non-Dealing Desk: The broker processes the client’s transactions through a third party known as the Non-Dealing Desk (NDD) method. The first method of the process occurs when you press the buy option on the platform.
    • Then the order will be processed through the Electronic Communications Network (ECN) without the need for a dealing desk.
    • The second method of the process occurs with another party rather than the ECN with a dealing desk, known as a Straight Through Processing (STP) broker.

    Conclusion:

    The beginner or experienced trader must consider various factors before choosing the right forex broker for all his forex transactions. The above information may help you decide to choose the right broker that meets your trading needs.

    Even if you are so capable or experienced in the trading industry, without the cooperation and support of the broker, you cannot always see profitable opportunities in the forex market.

    Without a platform to trade or the tools to make proper market analyses, the trader will find himself in a fix if he decides to do it in the absence of a broker.

    So, select the perfect broker meeting all your trading goals and needs to gain a profitable transaction most of the time.

    Forex Broker Forex trading forex trading app in UK
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