What is Forex?
Forex, also known as foreign exchange, refers to the process of exchanging one currency for another. This is done for a number of reasons. But, for the purposes of this piece, we’re going to look at forex trading. The forex market is a global exchange where people trade one currency against another. It’s a market that sees massive activity on a daily basis due to the scope of finance, trade, and international commerce. As such, these markets are highly liquid. In actual fact, the forex markets are seen as the most liquid asset markets in the world.
Forex pairs refer to two currencies that have been coupled together and can be traded against one another. Each currency will have an exchange rate attached to it which positions each currency and subsequent trade. You’ll come across major pairs, minor pairs, and exotic pairs. Major forex (currency) pairs are the most in-demand pairs and are traded on a wide scale. These currencies are extremely liquid and usually have the lowest spreads. Minor (or cross-currency) pairs don’t include the US dollar while exotic pairs include a major currency and a currency from a developing economy. Exotics, as the name suggests, are less frequently found and the spreads can be higher when trading them.
Forex Spread Betting
Forex spread betting allows traders to speculate on the price movements of forex pairs without actually engaging the foreign exchange market. Thus, there’s no need to transact within the market. Forex spread betting enables traders to utilise leverage without having to buy the underlying asset (currency) outright. There are three components that must be taken into account when engaging in forex spread betting: the spread, the direction of the trade, and the size of the bet. There are two prices which are quoted in a transaction such as this; bid and ask (known as the spread). Traders bet whether the currency pair will be lower than the bid price or higher than the ask price. It’s a simple concept that has garnered a lot of attention from traders.
How to Trade Forex Online
There are three different distinct markets where forex is traded. Namely, the spot market, and the forwards market, and future market. These are the three ways in which traders trade forex. Below, you’ll find that we’ve outlined the characteristics of each; providing you with the necessary knowledge and Forex strategy for the day you yourself engage in forex trading in UK.
With the growth of online trading and the emergence of powerhouse online brokers, the spot market has become the most popular market for forex trading. As such, the forex market as we know it usually refers to the spot market. In the spot market, currencies are bought and sold based on the current price of the currencies in question.
The price of the currency depends on a range of different factors such as the investor sentiment, internal economic performance, interest rates, to name but a few. Once a deal has been approved by both parties, the deal concludes and is known as a “spot deal”. One party receives a specific amount of one currency and delivers the specified amount of another currency to the opposing party.
Forwards and futures market
In these two markets, actual currencies are not traded. In these markets, contracts are dealt and traded that represent claims to a currency, at a certain price, on a specified date. Here, contracts are traded over-the-counter, where most parties agree to the terms themselves. As we are more concerned about the spot market that you’ll encounter on the forex trading platforms in question, we’ll leave it at that!
Forex Trading Brokers
When it comes to using online forex trading platforms, you’ll be astounded at the sheer number of available platforms in the UK. Not all of these brokers might hail from the UK per se, but there is certainly no shortage of spaces where you can engage in forex trading. You’ll also be able to open a brokerage account in no time. We have compiled a range of broker reviews that assess the strengths and weaknesses of these platforms in order to find out which platforms are best. In the next section, we’ve honed in on our approach to this so that you can better understand how we assess brokers and what you should look out for in the future.
How To Test Forex Trading Platforms
When it comes to analysing forex trading platforms, our team of experts have designed a testing tool that is able to uniformly assess each trading platform from an objective point of view. This gives you the chance to assess online brokers by way of direct comparison; giving you the best possible perspective of which trading platforms excel in the most important trading areas. These key areas of performance relate to overall service and platform viability and take the end user’s experience into account.
Platform usability and functionality
Our first port of call is assessing the platform’s usability and functionality. Our team of experts looks into the actual design and usability of the site. From the aesthetic appeal of the platform to the ease of navigation and layout. We’ll also test the site and platform in terms of response times and look into the availability of trading tools and innovative features which enhance the entire trading experience. You’ll be able to immediately determine which forex trading brokers have invested the necessary time and energy in creating a world-class platform.
License and regulation
We’ll be quick to find out which forex trading online brokers have the relevant licenses needed to provide financial trading services to the general public. You don’t want to get stuck with a platform that does not adhere to the regulations and expected trading practices put forth by UK policymakers. If this is the case, you are more prone to experiencing underhanded practices. The best forex trading platforms are licensed, transparent, and look after your interests as much as their own.
Overall site security
If you plan on trading with real money, it’s imperative that the platform you use is secure. We will bring your attention to any dubious trading platforms with a history of security breaches. Our featured forex trading online brokers have all implemented the necessary security protocols so as to ensure a safe trading experience.
Funding methods available
We’ll outline exactly which payment methods are available to you. Plus, we’ll test the processing times, respective fees, and security of the payment portal. You’ll be looking for an online broker that facilitates quick and easy payments; both when depositing and withdrawing.
Trading and account fees
You will be looking for a forex trading account that has competitive fees. You might incur non-activity fees and such. However, when it comes to trading, you’ll be looking for possible commission-free trading options, low margin fees, and low-to-none account opening fees. We’ll also look into the availability of market data tools and educational resources and outline what the associated fees might be. USe our guide to zero fee brokers if you’d like to limit your costs.
If you enjoy more than just forex trading online, then it’s important to find an established broker that offers you a diverse selection of markets. This includes multiple trading products and access to international and domestic exchanges. We’ll list the best online brokers when it comes to variety and the ability to trade in various financial instruments.
Diverse Forex trading pairs
If you are solely here for forex trading in UK, then you must identify which trading platforms offer a wide number of forex pairs. These include major, minor, and emerging pairs. You’ll also find reference to exotic forex pairs. We’ll highlight precisely which trading platforms have the best choice available to you.
Opening A Forex Trading Account
When it comes to opening a forex account, you’ll find that the process is much the same as opening a trading account at any online broker. However, certain brokers might have a specific forex trading account or trading platform. Depending on the platform that you choose, it’s wise to assess the available accounts and different platform capabilities. On the other hand, certain online trading platforms only have one account – enabling you to engage in forex trading in UK without having to decide on the best course of action regarding differing accounts. Ultimately, the process can be summed up as we have done so below.
- Make use of our broker reviews at Tradersbest.com Finance and find the best platform for you.
- Visit the official website and join by clicking on the button located top-right of your screen.
- You’ll be required to provide a valid email address, username, and password. You will then need to fill in all your particulars and ensure that you have verified your account.
- Once you have a valid forex trading account, it’s important to link your chosen payment method. You are then able to fund your account and start trading forex online.
The Best Forex Trading Platforms
You’ll find that there are a number of compelling forex trading in UK sites that you’ll have access to. However, which platform is best? Time and time again, we have found that this question is better answered from both of our perspectives; ours and yours. We enjoy putting forward a recommendation as to the best online trading platform. However, you might deem other factors to be more important when it comes to choosing the best forex trading platform. As such, we urge you to use our recommendation as a starting point. From there, you can use it as a comparison in order to select the best platform for you.
Plus500 is a great online forex trading platform for experienced traders. You’ll find over 60 different CFD forex pairs that you can trade in. The platform is highly-intuitive and easy to use. This online platform has implemented very competitive spreads and you can access leverage of up to 30:1.
For newcomers, eToro is a great social trading platform. With over 50 different major and minor currency pairs, you’ll have access to a great forex market on a usable and functional platform. Added to which, they have a great mobile trading app. Our broker ratings for this platform are sky high.
Tips For Forex Trading
Now that you know more about forex trading in UK and how to go about creating a forex trading account, we’ve highlighted several trading tips that will help you get started. These tips are aimed at beginner traders.
Understand the markets
When it comes to trading forex, you’ll need to understand how the markets work. You must also understand how currency pairs work and have the ability to identify key factors that might affect one or both currency options. If you fail to read market data and take the time to understand the broader picture, trading forex can be unforgiving.
Choose the right Forex trading platforms
As we always tend to harp on about, it’s vital that you choose the best online trading platform for your own needs. If you don’t, it becomes difficult to enjoy the online trading experience. Use a platform that caters to your trading interests; i.e. forex. If you are only concerned about forex trading, then you can find a platform that focuses on this. If you prefer a platform that has a strong reputation for customer satisfaction and the ability to resolve issues, then choose a platform that excels in this department.
Define your trading goals and strategy
You must approach online trading in forex with the foresight of where you want to end up. It’s important to tailor your trading strategy so that it meets your expectations and goals. If you don’t enjoy having an open trade come evening, then you might prefer engaging in day trading. If you like your trades to appreciate over time, then you need a strategy which takes into account the medium -to long-term as opposed to making gains in the short term.
Conclusion – Forex Trading In UK
We hope that you found our latest guide to online forex trading platforms to be useful. We are always eager to present you with in-depth and informative coverage of online trading in the UK. We urge you to continue reading up about all the trading topics that interest you. It’s never too late or early to learn something new.
Be sure to read our latest broker reviews to find the forex trading platforms that appeal to you. This will enable you to take one step closer to finding the best possible trading platform so that you can open a Forex trading account and engage in Forex trading in UK. We’ve compiled guides to CFD trading online and our latest crypto trading reviews, as well as our guide for stocks trading online.
Forex Trading UK FAQ
👉What is forex trading?
Forex trading is one of the main trading options that you’ll find when you visit an online broker. Forex trading involves trading in currencies. Knowing the currency market is vital if you wish to engage in forex trading. At Tradersbest.com, we have outlined exactly what forex trading in UK consists of and how best to get started. Use our in-depth guides for all your trading needs.
✅What are the best forex trading platforms?
There are a number of exciting forex trading platforms that will provide you with diverse currency pairs. Choosing the best platform consists of finding a platform that will engage you on a wider level and enable you to make the most of your trading options. We’ll outline the best forex trading platforms available to you. Read our latest trading guide to forex trading in UK to find out more about this topic and where to find the best trading platforms for forex.
📝How do I sign up to a forex trading account?
You can sign up to a forex trading account the same way you’d go about signing up to any online trading platform. Once you have figured out which trading platform you’d like to join, you can visit the official website. The best brokers will have a quick and efficient registration process. From here, you’ll need to complete the online application or registration process and you’ll be all but there.
📍Are all forex trading brokers reliable?
There are a large number of forex trading brokers in the UK. You’ll want to make sure that you make use of online forex trading platforms that are reliable. There’s no need to use an unreliable platform as there are plenty of top-notch brokers. The financial regulations in place in the UK mean that forex trading platforms must adhere to regulatory requirements and act in good faith. We’ll highlight the best forex brokers for you in our trading guides.
💸How do I fund my forex trading account?
You’ll be required to fund your trading account in order to start trading forex. It’s important that you make sure that you link your trading account to a payment method of your choosing – one that is secure. This will enable you to fund your account with ease and start trading forex as you see fit. In our latest guide to forex trading in the UK, we’ll be sure to walk you through the process.