UK Methodology for Broker Reviews
Being a UK trader, you have a lot of trading considerations to make when choosing the right broker. While this is no small task, the expert research team at Compareforexbrokers has its finger on the pulse, testing and reviewing all the top brokers in the industry. Major factors we have considered include:
- Trading Accounts (retail investor accounts)
- Trading Costs (spreads + other fees)
- ECNs (commission-based) vs Market Makers (no commissions)
- Trading Platforms
- Social/Copy/Algorithmic trading tools
- Financial Instruments
- Customer Support
These are the primary factors that we know are most important to you as a trader. There are also many secondary factors including risk management features and educational materials. Risk management could refer to order types that help prevent negative slippage such as a guaranteed stop loss order (GSLO). It could also refer to features such as Negative Balance Protection, which some brokers offer to prevent your account balance from going into negative territory. The educational materials a broker may offer can help improve your knowledge as a trader with insightful market research, educational videos or interesting articles.
These pages are all UK-focused, so we have focused on brokers that regulated by the FCA (Financial Conduct Authority), the main UK regulator. However, a lot of these brokers have multiple regulators, meaning they offer trading services in multiple countries or regions. Other regulators a UK broker may have subsidiaries in include ASIC in Australia, CySEC in Cyprus and FSCA in South Africa.
As UK trader, we recommend choosing a broker regulated by the FCA. However, there are many popular brokers that are not. Some top brokers that aren’t regulated by the FCA include FP Markets, Saxo Bank and VT Markets.
While we focus largely on FX trading, we also cover CFD trading. As a forex trader, we know this doesn’t exclude you from trading CFDs too. We also try to pick the best broker in that particular category, even if it may not be the best at everything. There could be a particular currency pair, trading platform or copy trading tool that the broker specialises in.
When writing our UK broker reviews, we are always honest in our information, highlighting both the pros and cons of that broker. Having said this, please be aware that all information is general in nature and not to be treated as trading advice. We recommend you do your own research before making a final decision when choosing a broker.
Understanding the Risks of Forex Trading
Foreign exchange and CFD trading involve a lot of risks. This is especially true when trading on margin, and particularly using leverage. The higher leverage you use, the more market exposure you have and the more you can lose. For beginner traders, it’s especially important you manage your exposure so you don’t risk losing more than you can afford.
The maximum retail leverage in the UK is up to 30:1 for foreign exchange. For minor currency pairs, it’s 20:1. While you can gain more exposure and potentially boost your profits, it also opens up your downside risk if the market goes against you. As such, before you start trading, it’s important to educate yourself about leverage and gain some trading experience first. Implementing risk management tools, such as a stop-loss order, will also help prevent big losses. The forex market can be highly volatile and it’s important to trade forex responsibly.
Additionally, given how popular online CFD and FX trading are today, there are plenty of sharks out there waiting to take advantage of inexperienced and naïve traders. This makes it all the more important to choose a trustworthy broker, particularly one that is regulated in the UK. That way, you will avoid scams from unethical brokers who may pose as legitimate advisors offering their services to profit illegally. So before you sign up and trade forex with a potential broker, make sure it is regulated by the FCA in the UK.
Our Methodology For United Kingdom Broker Reviews
Navigating the volatility and risk inherent in financial markets is hard enough as it is. CompareForexBrokers.com is here to make it easy for you. The CFB team has writers with years of experience with a keen sense of detail. Key features we analyse when considering the best brokers include:
- Trading Accounts
- Trading Costs (including spreads + commissions)
- Trading Platforms (proprietary and third-party)
- Social and Copy Trading tools
- Trading Products
- Minimum Deposit and Funding Methods
Then there are additional considerations such as risk management tools and execution types. Risk management tools include order types such as guaranteed stop losses that prevent a trader from losing too much on a trade due to slippage. Or even Negative Balance Protection, which protects a trader’s account from going into negative territory. Trading execution types are whether a broker offers no dealing desk (NDD), STP or ECN trading or whether they are a market maker. This will affect the spreads a broker can offer due to access to liquidity pools and the speed of execution.
These pages are all UK focused, so we have only chosen brokers regulated by the FCA. However, some of these brokers are multi-regulated, meaning they offer services to traders in different countries. Common subsidiaries that brokers we have reviewed are regulated by may include ASIC in Australia, CySEC in Cyprus and FCA in the UK. Also, forex prop trading doesn’t require regulation
In every Forex broker review for traders based in the UK, we are honest in our information, with the pros and cons of each broker. One thing we don’t do, however, is give trading advice so please note that all information is general in nature.
Understanding the Risks of Forex Trading
Forex and CFD trading is inherently a high-risk venture. This is particularly true when trading on margin, and especially using leverage. The more leverage you expose yourself to, the more you can lose. For inexperienced traders, it’s doubly important to manage your exposure so you don’t risk losing more than you can afford.
The maximum leverage on offer for United Kindom forex brokers is up to 30:1 for retail traders. While this provides more flexibility when trading, it also opens up your downside risk should a trade go against you. As such, when opening an account, it’s vital to look carefully at the leverage on offer and also uses the online broker resources to better educate yourself.
Additionally, with the increasing popularity of CFD and forex trading, it’s essential to only trade with a trusted and reputable broker in the UK This is to avoid scams from unethical companies that may pose as legitimate advisors offering their services to profit illegally. So before you sign up with a potential broker, make sure it is regulated by the FCA in the United Kingdom.