There are multiple forex brokers available in the UK. Not every best forex broker is ideal for the beginners. Check our unbiased opinion and list of best forex brokers for beginners.
If you have already decided to trade in the forex market, the first thing you need is a good forex broker. However, which forex broker is the best is a common query with vague answers over the internet. Each forex broker can have different features, and trading conditions, and is ideal for different types of traders.
In this guide, we have selected some of the best forex brokers that are ideal for beginners. We have also described the trading conditions with each broker along with their pros and cons in the UK.
We’ve detailed why these selected forex brokers are ideal for beginners. Their user-friendly platforms, educational resources, risk management tools, and responsive customer support make them a solid choice for newcomers to the forex market.
List of Best Forex Brokers for Beginners UK for 2023
These brokers are selected after a thorough analysis of more than 12 factors that are important for beginners in forex trading. Clients residing in the UK must only choose a broker according to their suitability after comparing the best forex brokers.
eToro is regulated by the Financial Conduct Authority of the UK with FRN number 583263. Clients residing in the UK are registered under FCA with the legal entity eToro (UK) Ltd. Clients in the UK are protected by up to £85,000 per client under the FCA regulation.
Apart from FCA, eToro also holds regulatory license from ASIC (491139), CySEC (109/10), and FSAS in other jurisdictions. eToro is a privately held firm founded in 2007 and is not publicly listed on any stock exchange.
eToro does not incur trading commissions for forex trading. The trading fees is built into spreads that start from 1 pip. The average spread for EUR/USD at eToro is 1 pip.
The overnight swap fee is decent while the inactivity fee is $10 for each month after 1 year of inactivity.
eToro incurs a fixed withdrawal fee of $5 regardless of the methods used. The deposits are free. Clients will also be incurred with a currency conversion fee if the deposit currency is different than USD.
eToro is a good choice for beginners due to its unique user-friendly platform. Their proprietary platform allows trading on 49 forex pairs, 2500+ stocks, 127 cryptocurrencies and several other instruments.
The copy trading feature is simple and free of any additional commission. There are no choices of account type with different fees or trading conditions. However, higher equity in the account will allow traders to take advantage of useful services. Depending on the account equity, eToro offers different customer support and additional services.
According to our analysis, eToro can be a great choice for beginners as the trading platform is user-friendly, fee is low, and the minimum deposit requirement is low ($10).
CMC Markets is regulated by the Financial Conduct Authority of the UK under FRN number 173730. Clients residing in the UK are protected under the FCA regulation.
Apart from FCA, CMC Markets is regulated by BaFin of Germany, IIROC of Canada, ASIC of Australia, FMA of New Zealand, MAS of Singapore, and DFSA of the United Arab Emirates. CMC Markets is a publicly listed company on London Stock Exchange (CMCX) and is very transparent with its financials.
CMC Markets can be considered safe for traders as there is a very low third-party risk.
The spreads at CMC Markets are lower than many other FCA-regulated CFD brokers in the UK. The average typical spread for EUR/USD is 0.7 pips at CMC markets with no additional trading commission.
There are no choices of account types with the different pricing structures. Hence, the trading fees are only built into spreads that are lower than many FCA-regulated forex brokers in the UK.
Trading stocks at CMC markets will incur a variable commission starting from $10 per trade. CMC Markets does not incur any deposit or withdrawal fee for all the available methods. The inactivity fee is GBP 10 per month after 12 months of inactivity.
Clients residing in the UK can open their trading accounts with GBP as the base currency. This means that no currency conversion fee will be applicable if deposits and withdrawals are done in GBP.
CMC markets do not have a minimum deposit requirement. This makes it ideal for beginners who wish to start with a low initial deposit.
Clients can trade through MetaTrader 4 trading platform at CMC markets and a mobile trading app that is also based on the MetaTrader platform. MT4 is considered an ideal choice for beginners and is also the most popular forex trading platform globally.
More than 10,000 financial instruments can be traded including 338 forex pairs. The number of instruments at CMC markets is the highest among all the FCA-regulated forex brokers in the UK.
Those who wish to trade on the MT4 trading platform with a wide range of trading instruments at low fees will find CMC markets ideal for themselves.
CMC Market Pros
CMC Market Cons
Capital Com (UK) Ltd is the legal entity that is regulated by the Financial Conduct Authority under license number 793714. Clients residing in the UK are protected under FCA regulation and Financial Services Compensation Scheme (FSCS).
Apart from this, Capital.com is also regulated by ASIC in Australia and CySEC in the European Union. The broker is not listed on any stock exchange but is fairly transparent with their statements and sheet.
The fees at Capital.com are lower compared to many other FCA-regulated forex brokers in the UK. There are no choices for account types with different pricing patterns. The trading fee is built into spreads as no commission is incurred from the traders.
The spreads start from 0.7 pips while the average typical spread for EUR/USD is 0.8 pips. The overnight rollover charges are also lower than many other brokers in the UK.
We didn’t find any trading or non-trading commission at Capital.com. There is no deposit/withdrawal fee, account opening, maintenance, or inactivity fee at Capital.com. This can be advantageous for beginners.
Capital.com supports the MetaTrader 4 and TradingView Trading Platforms for trading all the available instruments. They also provide mobile apps and webtrader for trading. A total of 140 forex pairs can be traded along with several other CFD instruments.
Capital.com offers multiple tools for research and education making it easier to learn forex trading for beginners. There are multiple guides and courses that can assist beginners in gaining knowledge and experience regarding forex trading.
Clients residing in the UK are registered under FCA regulation at City Index. StoneX Financial Ltd is the legal entity of City Index that is regulated by the Financial Conduct Authority under license number 446717.
Apart from FCA, City Index is also regulated by the ASIC in Australia, DFSA in UAE, and MAS in Singapore. City Index is a member of Stonex Group INC which is publicly traded on NASDAQ. The third-party risk of choosing City Index in the UK is very low as clients are protected under FSCS.
The spreads for major pairs at City Index start from 0.5 pips. However, the average typical spread for EUR/USD at City Index is 0.8 pips which are lower than many FCA regulated brokers in the UK.
Spread is the only component of the fee that is incurred from the retail traders. Overnight rollover charges are average and are only incurred when a position is kept open overnight.
The commission is only incurred while trading shares. Deposits and withdrawals through all the available methods are free. A currency conversion fee will be applicable if the deposit currency is different from the base account currency.
The inactivity fees for the GBP-based account are GBP 12 per month and $15 per month for the USD-based account. This will be incurred every month if no trades are executed for 12 consecutive months.
City Index support MetaTrader 4 trading platform for all the devices. They also have a mobile trading app and webtrader that are based on MetaTrader platforms.
Clients can trade more than 4500 financial instruments including 84 currency pairs. All instruments can only be traded via CFDs. The deposit and withdrawal through local banks are free and GBP can be chosen as the base currency of the account.
City Index offers excellent training tools that can greatly enhance the trading techniques and strategies of beginners in the UK.
City Index Pros
City Index Cons
Plus500UK Ltd is the legal entity regulated under FCA under which clients in the UK are registered and protected. Plus500 holds a regulatory license from FCA (509909) of the UK, CySEC of the European Union, ASIC of Australia, FSCA of South Africa, FMA of New Zealand, and MAS of Singapore.
Plus500 was launched in 2008 and is a publicly listed company on the London Stock Exchange (PLUS.L). It is an Israel-based financial services provider that is globally regulated by multiple top-tier financial regulatory authorities.
The pricing structure is the same at Plus500 for every retail client. The trading fee is built into spreads and overnight charges (if a leveraged trade order is kept open overnight). No commission is incurred for deposits, withdrawals, opening, or closing a position.
The average typical spread for EUR/USD at Plus500 is 0.8 pips. The overnight rollover fees at Plus500 are comparatively higher than other FCA-regulated CFD brokers in the UK.
Plus500 incurs an inactivity fee of $10 per month if no trades are executed for three months. The inactivity period at Plus500 is much shorter compared to other brokers in the UK.
Plus500 has its own proprietary trading platform that is simple and easy to use. The look and feel of the platform are more user-friendly. This makes it an ideal choice for beginners. No other trading platform can be chosen to trade at Plus500.
The platform allows trading on more than 2000 financial instruments including 67 currency pairs. The research and education tools are limited and lower than other brokers.
Pepperstone in the UK is regulated by the Financial Conduct Authority. Pepperstone Limited is the legal entity that is regulated by FCA under license number 684312. Clients residing in the UK are registered under FCA regulation and are protected under FSCS.
Apart from FCA, Pepperstone is also regulated by ASIC in Australia, BaFIN of Germany, and CySEC of the European Union. It was launched in 2008 and can be considered safe for clients residing in the UK.
Pepperstone offers two account types with different pricing structures. The Razor account type is a commission-based account with low spreads. The standard account is a spread-only pricing structure. The Standard account is ideal for beginners.
The average typical spread for EUR/USD currency pairs is 0.12 pips and 1.12 pips with the Razor and Standard accounts respectively.
The trading commission with the Razor account depends on the trading platform and account currency that has been chosen. For USD-based accounts, the trading commission is $7 for a round trade of a standard lot with MetaTrader platforms. The same with the GBP-based account is GBP 4.50.
The trading commission with the cTrader trading platform is $6 equivalent to a round trade of a standard lot. The overnight fees are slightly higher than some of the FCA-regulated brokers in the UK.
There is no deposit/withdrawal fee, inactivity fee, or any other non-trading fee at Pepperstone.
Clients can start trading at Pepperstone with a deposit of as low as $1. GBP can be chosen as the base currency apart from USD, EUR, and CHF.
Pepperstone supports all the 3 most chosen forex trading platforms in the world namely MT4, MT5, and cTrader. Any one of the three platforms can be chosen with any account configuration. MT4 is ideal for beginners.
Pepperstone offers trading on 1200+ instruments including 63 currency pairs. There is an average number of research and education tools that can assist beginners in forex trading.
AvaTrade is not regulated by FCA in the UK. However, it is regulated by ASIC in Australia, FSCA in South Africa, CySEC in the European Union, and several other financial regulatory authorities.
Clients residing in the UK are registered under the legal entity Ava Trade Markets Ltd under the regulation of the B.V.I Financial Services Commission.
Pepperstone was launched in 2007 and is not listed on any stock exchange. Clients in the UK are not protected under FCA or FSCS. The third-party risk of choosing Pepperstone in the UK is slightly high compared to FCA-regulated forex brokers in the UK.
AvaTrade offers a single account type where the trading fees are built into spreads and overnight charges. No trading commission is incurred for opening and closing any position.
The average typical spread for EUR/USD is 0.9 pips. This is average when compared with other brokers in the UK.
AvaTrade does not incur any non-trading commission apart from inactivity fees. An inactivity fine of $50 is incurred for three months of inactivity and $100 for a year of inactivity.
As AvaTrade is not regulated under FCA, the maximum leverage cap is higher than other brokers that are regulated under FCA. Clients can trade with max leverage of 1:400 instead of 1:30. However, high leverage is not good for beginners as it may lead to severe losses.
AvaTrade offers MT4 and MT5 trading platforms and a proprietary platform called AvaTradeGo. They also offer a separate platform for copy trading and automated trading named DupliTrade and ZuluTrade respectively.
AvaTrade allows trading on 65 currency pairs and several other financial instruments as CFDs.
Choosing the best forex broker for beginners can be a complex task as there are many things that need to be considered. Experienced traders know the features they want and conditions that suit their trading strategy. On the other hand, beginners in the forex market are not familiar with most of the features and strategies.
We have highlighted some of the most important aspects that must be considered before a newbie selects a forex broker.
The safety of the deposited amount should be the top priority. The safety depends on the regulation and reputation of the brokers.
Clients residing in the UK must always prefer a broker that is regulated by the FCA. If registered under FCA regulation, each client gets the protection of up to GBP 85,000 in case of an unsettled dispute between a broker and client.
Clients should also check for other regulatory licenses held by the broker in other jurisdictions. Multiple licenses from regulated financial regulations enhance the trust factor. This becomes more important if the broker is not regulated by the FCA. The FCA website can be accessed to cross-check the current details of the brokers.
The past records, user reviews, expert reviews, years in the industry, ownership, auditing, etc can also assist in measuring the safety of your funds with the concerned broker. If a broker is publicly listed on any stock exchange, it greatly enhances the trust and lowers the third-party risk.
Clients must understand every component of the fee to avoid inconvenience in the future. Some brokers incur low spreads but take commissions. Some have low trading fees but high non-trading fees.
Hence, all the components of fees should be thoroughly understood, checked, and compared before choosing a broker.
Beginners must ensure whether the trading platform supported by the chosen broker is ideal for them or not. A demo account can be used to get familiar with the trading platform.
Beginners in forex trading lack experience of the price movements in the forex market. There are several factors that must be considered by forex traders before they start trading with live accounts:
What is Moving the Price?
The forex market is active 24 hours a day 5 days a week. The majority of trading activities are done during active hours of the day but prices can move at any time of the day due to multiple reasons. Beginners in the forex market must identify the reason behind price movements in the past to predict the impact of any national and international event on the price movement and trends in the future.
What Currency are you Trading With?
There are more than 300 currency pairs in the forex market but most of the trading is done only on 7 major pairs. In the initial phase, it is better to trade on a pair with high liquidity. Beginners in the forex market must only trade with forex pairs that are familiar or whose price movements can be predicted. Trading with unknown pairs in the initial phase can be a huge risk.
The leverage allows traders to open bigger positions with smaller initial deposits. This sounds attractive to most beginners in trading but it also involves high leverage risk. Traders can lose the whole amount in their account if they have used high leverage. It is always recommended to use safe leverage of 1:10 or lower and make lower deposits in the initial phase of trading.
Risk to Reward
Risk to reward is the ratio that depicts the risk taken to generate unit profits. If you set the stop loss limit and take the profit limit, the ratio of profit to loss will denote the risk-to-reward ratio of the trade order. A risk-to-reward ratio of more than 1 is considered ideal to place a trade order.
Always go With a Plan
Trading in the forex market without a plan is similar to searching for treasure without a map. Forex trading should always be done according to a plan and suitable strategies. Traders must follow a preset strategy or create their own to get better results from forex trading.
Trading decisions based on emotions are very likely to fail as they lack fundamental reasoning. New traders often make wrong trading decisions during substantial price movements driven by emotions.
After choosing a broker, the forex trading account can be opened online through the official website and app of the broker. Following are the steps that need to be followed to open a forex trading account in the UK. However, each broker can have a different account opening process.
Step 1: Basic Details
The first step to open an account is the provide basic details to the broker on their account opening page. This includes name, email, phone number, etc. The details entered should be the same as that on the documents.
Step 2: Financial Details and Experience
Forex Brokers will need your financial information like annual income and trading experience to provide better services. Each broker may ask different questions to check the trading experience of the client.
Step 3: Document Verification
The details provided by the clients need to be cross-checked and verified by the broker. Clients need to upload a soft copy of their identity and address proofs. The executives at brokerage firms check them manually so the time in this step depends on the broker. Some brokers verify the documents within a few hours while others can take a day.
Step 4: Deposit
Once the account the verified, you will be notified by the broker. The next step is to deposit funds into the trading account. This can be done through available methods at the broker. Traders must check the deposit and withdrawal methods and the minimum amount before opening the account.
Once the deposits are made, traders can start trading forex and CFDs through trading platforms. Desktop trading platforms need to be downloaded while web trading platforms can be used on web browsers.
As a beginner, it is important to understand that the forex market is a very high-risk market. Taking precautionary measures can mitigate the risk factors up to some extent but there is always a risk of losing the deposited amount in forex trading. More than 70% of the traders face losses in forex trading.
The following are the major components of risk involved in forex trading:
Common mistakes made by beginners in forex trading include:
To avoid these mistakes, beginners should prioritize education, implement risk management strategies, trade with a plan, conduct market analysis, and exercise discipline in their trading decisions.
|Spread Betting Platform||Typical EUR/USD Spread||Minimum Deposit||Max. Leverage|
Each broker has different features and conditions and charges differently for it. The best brokers for beginners can be different for each trader. According to our analysis, eToro, CMC Markets, City Index, Capital.com, Plus500, Pepperstone, and AvaTrade are the best forex brokers for beginners in the UK.
No, forex trading involves high risk. It is not suitable for those who are not familiar with leveraged trading on CFDs. Beginners should spend time and effort learning about forex before starting.
Disciplined traders with decent experience of short-term trading in financial markets will find the forex market ideal for themselves.
According to our analysis and comparison, Pepperstone, CMC Markets, and Capital.com are the brokers with least spread without trading commission. These brokers are regulated by FCA in the UK and can be considered cheapest regulated brokers in the UK.
No, you cannot trade on forex and CFD instruments without opening an account with a broker. Demo accounts can be opened on trading platforms without a broker where traders can practice and learn through virtual currencies but live accounts cannot be opened without a broker.
Yes, gain earned through CFD trading in the UK are taxed at the standard prevailing capital gains tax in the UK. According to the 2022/2023 capital gain tax rates, gains up to £12,300 are taxed free and no tax is to be paid if the annual gain is less than £12,300. For gains more than £12,300 and below £50,270, 10% is deducted as capital gains tax and for more than £50,270 gained within a year, 20% will be deducted.
Beginners in the forex market must spend time and effort learning the basic terminologies, strategies, and price movements of currency pairs. Beginners must always start with low leverage and familiar instruments with small deposits. Beginners should not make trading decisions driven by emotions. It is always advisable for beginners to gain experience through demo accounts before trading with real money.
Beginners should look for a platform that is user-friendly, easy to learn and has good compatibility with their devices. eToro is one the best forex trading platforms for beginners in the UK but some traders also find MT4 to be more suitable for them.
Each broker is ideal for different types of traders. Most traders in the UK trade with eToro, Pepperstone, CMC Markets, City Index, and other FCA-regulated brokers in the UK.
Yes, forex trading involves significant financial risk and the majority of forex traders face losses. However, experienced traders tend to make consistent gains in forex trading as they do adequate research and analysis on price movements. Beginners must learn about the forex trading strategies and start with a demo account in forex.
Yes, $100 is enough to start forex trading as a beginner. Many brokers allow starting with an even lower amount but very low account equity can lead to a position close out due to leverage. However, as a beginner, it is always safe to start with a small amount.
Forex trading in the UK is regulated by the Financial Conduct Authority (FCA). Any broker that is regulated by FCA and registers clients residing in the UK under FCA regulation can be considered safe for trading forex and CFD in the UK.