Currency trading has existed for thousands of years. Forex, or foreign exchange trading, is the modern version, and in today’s market, over $7.5trn in foreign currency is traded across the world every day. That enormous volume means there is an incredible amount of money to be made.

The UK dominates trade in Forex, with over 38% of the world’s transactions passing through this country. By convention, the London market price is what is usually quoted as a currency’s current value no matter where traders are located in the world.

Is it Legal to Trade Forex in the UK?

Trading Forex in the UK is perfectly legal. The trade is monitored by the Financial Conduct Authority (FCA). Only registered and licensed brokers can legally offer Forex trading services to their clients.

Forex Regulation in the UK

The FCA is the body responsible for granting registration or authorisation to brokerage firms. FCA-regulated brokers give compensation rights to their retail customers to protect them from bankruptcy and insolvency of up to £85,000 per person through the Financial Services Compensation Scheme.

Forex trading is also taxable. Traders are responsible for paying capital gains tax on their trading profits. However, day traders who hold positions for less than a week are exempt from these taxes. Part-time traders who make occasional profits may also qualify for tax exemption.

How to Start Forex Trading in the UK

When you’re looking at starting out trading Forex, there’s a whole lot to learn, and it can be daunting. You can study terminology and the tools of the trade, get familiar with currency charts and how to read them and learn about strategies like scalping, hedging, and price action trading.

Due to the size of the market in the UK, it’s very easy to get started trading Forex with a broker. You have a wide range of brokers to choose from, both UK-based and international companies. No matter what, it’s essential to choose a regulated broker even if other firms offer you more enticing rates.

The best brokerage firms offer the opportunity to get into their systems and practice using their tools by setting up a demo account. These accounts let you use demo credit and make real-time trades through the broker’s system. You’re given access to graphs and charts for analysis. You also get to learn how to set stops and limits to control your trading and set your targets.

The Best Forex Brokers in the UK

How do you select the best Forex broker to trade with when there are so many in this market? Larger brokers can offer lower transaction costs since so much trade volume runs through the UK. Top brokers are also registered with and authorised by the FCA in the UK and other regulatory bodies worldwide. You need to look at the platforms you can use to trade with a broker. A great platform is easy to use, efficient, and includes all the educational tools and customer support you need to trade.

With that in mind, we’ve selected a list of the top Forex brokers in the UK:

Broker Features Regulator Platforms Next Step
Number One Broker logo74% of clients lose money. Capital at risk. Founded: 1999

- Trusted Global Market Leader
- Online FX & CFD Trading
- 180+  Global Markets, 84 FX pairs, 65 shares, 17 popular indices and more
- Forex, Indices, Commodities, Equities & Bitcoin
- Available to US traders

CFTC, CIMA, FCA, FSA, IIRO, NFA FOREXTrader & MT4 for PC, MAC, iPhone, iPad and Android, WebTrader
Oanda Logo77% of retail CFD accounts lose money Founded: 1996
Your capital is...
  • Choose from four high-quality platforms.
  • Good trading conditions with fast execution speeds
  • Excellent research and analysis
  • Strong client protection
  • Winner of Most Popular Broker award for three consecutive years.
  • Fees and commissions are inline rather than market-leading.
  • Satisfactory rather than impressive range of instruments.
eToro LogoYour capital is at risk Founded: 2019

- Trade 15 cryptocurrencies
- Beginner friendly

- eToro

    Choosing a broker is as important as any type of financial investment. For this reason, all traders should take time to look into different brokers and decide which is the best Forex broker in the UK for their needs. It’s wise to consult our list of the best brokers for 2023. Once you have your broker of choice, you can start trading Forex with the confidence of knowing you’re in good hands.