Best Scalping Forex Brokers UK

Scalping allows traders to make profits out of small price movements. We have listed the best forex brokers in the UK that can be chosen for scalping in the forex market.

Scalping is a trading strategy in which traders venture into capital markets to make profits from small price movements. It is a common trading strategy in the forex market followed by many experienced and new forex traders.

To make the most out of slight price movement, traders need a trading account with a narrow spread. Commission-based pricing structures with very little spread are better suited for scalping.

We have listed the best forex brokers in the UK that are good for scalping. If you wish to trade forex predominantly through scalping, these brokers can be an ideal choice.

It must be noted that this is an honest and unbiased opinion to assist the traders in the UK. We do not promote any broker particularly. These brokers have been selected after a thorough comparison based on 12+ factors.

#1 CMC Markets – Best Low Spread Scalping Broker

CMC Markets can be a good choice for beginners in scalping as they do not charge a trading commission while the spreads are also lower than many forex brokers. The average typical spread for EUR/USD at CMC Markets is 0.7 pips.

They allow trading on the MT4 trading platform along with a proprietary platform named NextGeneration. Both the platforms are ideal for scalping however, the charting and trading tools at the NextGen platform are better suited for scalping.

They do not have a lower cap on deposit amounts and accept multiple methods for transactions including local bank transfers. Most scalping-friendly trading instruments are available at CMC Markets.

#2 Pepperstone – Best Scalping Broker with Multiple Trading Platform

Traders can choose between the pricing structure of spread only and spread plus commission with two account types namely standard and Razor respectively. For scalping, the Razor account is an ideal choice as the spreads with this account type are as low as 0.1 pips.

Another advantage of choosing Pepperstone is that it allows traders to choose a suitable trading platform. They support MT4, MT5, and cTrader trading platforms. Traders can choose the platform that suits them the most with the preferred pricing structure.

Traders can start scalping at Pepperstone with any amount but the max leverage is capped at 1:30. It is a good choice for multiple types of traders due to different variations in account configuration.

#3 IC Markets – Scalping Forex Broker with High Leverage

The only reason we have placed IC Markets on our list is that they can offer high leverage of up to 1:500. All the FCA-regulated forex brokers are restricted to offer a maximum leverage of 1:30.

IC Markets is ideal for scalpers who wish to scalp with a small deposit and are ready to take the high risk. They offer 2 different types of trading accounts with different pricing structures. The spread-only account is ideal for small volume traders while most scalpers prefer commission-based accounts with negligible spreads.

IC Markets allow trading on MT4, MT5, and cTrader with a minimum deposit of $200. It must be noted that trading with IC Markets is risky but it is one of the best brokers that is not regulated by FCA.

Traders must only choose IC Markets if they are certain of taking the high third-party risk and high leverage risk for scalping.

#4 AvaTrade – Scalping Forex Broker Not Regulated by FCA

Avatrade allows trading on various financial instruments through MT4 and MT5 trading platforms. They offer a maximum leverage of up to 1:400 as they do not comply with FCA guidelines.

They do not offer commission-based trading as the trading fee is built into spreads starting from 0.8 pips. The average typical spread for EUR/USD at AvaTrade is 0.9 pips. They offer a rich variety of research and education tools and a good copy trading platform.

Traders and scalpers who wish to open their trading account with Avatrade can do so for the high leverage but it will involve high risk. AvaTrade is safe but it is riskier than any other FCA-regulated broker in the UK.

#5 Exness – Best Low-cost Scalping Broker Regulated by FCA

Exness (UK) Ltd is authorised and regulated by the Financial Conduct Authority (FCA) under registration number 730729. Exness is also regulated by the FSCA of South Africa, CySEC of the European Union, and the FSA of Seychelles. Hence can be considered safe for trading in the UK.

Exness offers multiple account types with different pricing structures. The standard accounts can be opened with a minimum deposit as low as $10. The average spread with the standard account for EUR/USD is 1 pip with no commission.

There are three professional accounts at Exness namely Raw Spread, Zero, and Pro. All these accounts require a minimum deposit of $500. The Raw spread accounts for a very low spread with a $7 commission for a round-turn trade of a standard lot. The Zero Spread account has a fixed spread starting from 0 with the variable commission. The Pro account does not involve any commission and the spreads are very low.

Exness allows trading through MT4 and MT5 trading platforms on various instruments. GBP can be chosen as the base currency of the account. Deposits and withdrawals are free through local bank transfers and various other methods.

What is Scalping?

Scalping is a trading strategy in which the trader takes advantage of small price movements. A scalper aims to make a profit in a small duration of time in liquid capital markets.

The profit amount in scalping is small but trading positions are opened and closed multiple times during a trading session to take advantage of small oscillations in price. Scalping is ideal for traders who have high account equity and trade on bigger volumes.

Scalping is an advanced trading technique that requires several hours of analysis and study of graphs. Traders need to be comfortable with technical analysis with sound knowledge of resistance, support, and trends to make better outcomes from scalping.

Pros and Cons of Scalping

How to Choose a Broker for Scalping?

To start scalping on forex pairs in the UK, traders need to open an account with a forex broker that allows a convenient scalping strategy on financial instruments. The following are the significant aspects that traders must look out for while choosing a broker for scalping.

1) Regulation

Regulation of the broker and the safety of the traders is the most important factor while dealing in capital markets online. The Financial Conduct Authority (FCA) is the financial authority that regulates financial service providers in the UK.

Traders must always check the authenticity of the FCA license along with the license number before checking anything of a broker. The details can be cross-checked through the online financial register at the official FCA website.

2) Low Spreads

Scalping involves making profits out of small price movements and it will be very difficult to make money if the spreads are high. The best-suggested pricing structure for scalpers is a low or negligible spread with a trading commission.

Trading fees built only into the spread are not suitable for scalping as the price needs to move more than the spread to generate profits. However, scalping can be done with spread-based pricing. Traders need to seek a broker with scalping-friendly pricing and compare it with other brokers before opening their accounts.

3) Leverage

Scalping becomes easier with high leverage but high leverage also increases the risk factor. Trading positions with a small volume will generate very small profit while scalping. To make decent profits in each position, the volume needs to be high.

Bigger positions can be opened with the help of leverage or by making a higher deposit. Those who can take higher risks use high leverage while more conservative and experienced scalpers make higher deposits to book decent profits.

The maximum leverage ratio in forex trading as per the regulatory compliance of the Financial Conduct Authority (FCA) is 1:30 for major pairs and 1:20 for minor pairs. Brokers not regulated under FCA can offer a much higher leverage ratio to scalpers but it is not recommended as traders will be exposed to high leverage risk and third-party risk.

4) Fast and User-Friendly Platform

In scalping, trading positions need to be opened and closed rapidly to make the most out of price oscillations. The trading platform supported by the broker needs to be fast and user-friendly which allows quick execution of trade with easy availability and accessibility of all features.

5) Indicators and Patterns

Scalpers need to have a good command of technical analysis and must be comfortable with indicators and patterns. Trend analysis plays an important role in scalping out the small oscillations in price.

Make sure your broker offers adequate tools for technical analysis and education tools to enhance the knowledge and trading skills of the traders.

6) Financial Instruments with High Liquidity

Not all instruments are ideal for scalping trading strategy. Financial instruments that have low liquidity in the market tend to have less frequent and small price movements. This is because they are exchanged less compared to liquid instruments. EUR/USD is the most liquid currency pair and is the best-suited forex pair for scalping.

Tips and Tricks for Scalping

Apart from choosing the right broker, their are certain tips that a scalper must consider before scalping in capital markets.

Prioritize Liquid Pairs: Stick to major currency pairs like EUR/USD or USD/JPY due to their high liquidity and trading volumes. These pairs often have tighter spreads, making them favorable for scalping.

Short Timeframes: Scalpers typically operate on 1-minute, 5-minute, or 15-minute charts. These short timeframes provide numerous trading opportunities, but demand quick decision-making skills.

Master Technical Analysis: Develop a deep understanding of technical analysis, including patterns, indicators, and candlestick formations. These tools aid in identifying optimal entry and exit points.

Define Entry and Exit Rules: Establish well-defined criteria for entering and exiting trades. Discipline is key; avoid deviating from your strategy based on emotions.

Tight Stop-Loss Orders: Due to the small profit targets, set tight stop-loss orders to safeguard your capital if a trade goes against you.

Swift Profit Taking: Scalpers aim for quick profits. Once your target is met, execute the trade promptly to secure gains without hesitation.

Effective Risk Management: Implement a sound risk management strategy, limiting each trade to a small percentage of your total capital. This shields you from substantial losses.

Maintain Composure: Scalping can be intense. Stay composed, avoid impulsivity, and resist the urge to overtrade.

Stay Informed: Monitor economic calendars and stay updated on significant news releases that could influence the market. Refrain from trading during high-impact events.

Demo Practice: Hone your skills on a demo account before engaging in live scalping. This allows you to refine your strategy and build confidence.

Mind Market News: Keep abreast of market trends, global events, and economic data releases that might impact your trades.

Prudent Leverage Use: While leverage amplifies potential gains, it heightens risk as well. Use leverage judiciously to avoid excessive exposure.

Minimize Distractions: Scalping necessitates focus. Trade in a distraction-free environment to make accurate decisions.

Review and Learn: Regularly assess your trading performance, analyzing both successful and unsuccessful trades. Continuous learning and improvement are fundamental.

Common Mistakes that Scalpers Make

Scalpers, who aim to make small profits from frequent trades, need to be cautious of common mistakes. Here are key errors to avoid:

Inadequate risk management: Properly managing risk is crucial for scalpers to avoid significant losses. Setting appropriate stop-loss orders and not risking too much on individual trades is essential.

Overtrading: Taking too many trades can lead to reduced focus, impulsive decisions, and increased transaction costs. Waiting for high-probability setups is important to avoid overtrading.

Chasing trades: Entering positions late after significant price moves can result in poor trade entries and increased risk. It’s important to avoid chasing trades and maintain discipline.

Lack of preparation and research: Proper research of market conditions, news events, and technical indicators is necessary for making informed trade decisions.

Lack of discipline: Deviating from the trading plan, exiting trades prematurely, or holding onto losing positions can negatively impact profitability. Sticking to the strategy is crucial.

Poor trade execution: Timely execution is vital in scalping. Using a reliable and fast trading platform is important to avoid execution delays or slippage.

Overreliance on indicators: Relying solely on indicators without considering other market factors can lead to false signals. Considering multiple factors alongside indicators is recommended.

Inability to adapt: Scalping strategies may not work in all market conditions. Being adaptable and adjusting strategies based on changing market dynamics is important.

Neglecting transaction costs: Frequent trading can accumulate significant transaction costs. Considering these costs in the overall trading strategy is essential.

Not learning from mistakes: Analyzing past trades, maintaining a trading journal, and learning from mistakes is crucial for improvement and refining the scalping approach.

Risk Involved in Scalping

Risks in Scalping Simplified:

1. Costs Add Up: Frequent trading means paying fees for each trade, eating into profits.
2. Confusing Market: In short timeframes, prices can jump around randomly, making it hard to tell real trends from noise.
3. Stressful: Scalping needs quick decisions and actions, which can be stressful and lead to emotional errors.
4. Tech Problems: Reliance on internet and platform can lead to losses if there are technical issues or crashes.
5. Overtrading Risk: Scalping can make you trade too much, increasing risk and potential losses.
6. Need Lots of Money: Scalping often requires trading with a lot of money, and losses can be substantial.
7. No Time for Research: Scalpers don’t have time for research and rely on quick patterns and indicators.
8. Spreads Hurt Profits: The gap between buying and selling prices can eat into profits when making small trades.
9. Market Not Busy: In slow markets or during news events, it’s hard to find buyers or sellers at desired prices.
10. Pressure on You: Scalping is fast and can be stressful, affecting your decisions.
11. Regulations Matter: Rules and limits might apply to scalping in different places.
12. Success is Tricky: Scalping needs lots of wins because each win gives small profits; not winning enough can lead to losses.

Comparison of Best Scalping Forex Brokers UK

 

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