If you are going to put a step into the foreign exchange market, you need to consider that you are stepping somewhere that accounts for $4 trillion in average trade value each day. It is the largest financial market in the world and as the forex market has no central marketplace, you need to select a forex broker for proceeding with these trading activities. There is a large number of top forex brokers UK available to you. Things can get a bit tricky for you if you are unaware of what to consider while choosing the best forex broker. Here, we are going to discuss some critical points.
Regulation of activities
Whenever you consider a good forex broker, you will need to consider the credibility. It is given to them in the UK by the FCA and PRA. The FCA is financial Conduct Authority and the PRA is Prudential Regulation Authority. When a broker is working on these badges, it is for sure that his trading activities are being carried under the careful supervision of regulatory authorities. It helps in the prevention of frauds and makes it hard for brokers to manipulate money in a wrong way and start abusive practicing.
Do not go on the outer appearance as the flashy and catchy look of the offices and websites. It does not suggest by any means that the broker is certified by regulatory authorities and is carrying the practice under their surveillance.
There are a number of things that a broker may offer to you. These include the leverage and margin which means that the traders get access to a diverse range of leverage amounts. It depends on the broker and the ratio can be 50:1 or 200:1. One can consider that leverage is a form of a loan that is extended to the people who are margin account holders. When you proceed with the leverage trade, it can give your account a boost in no time. For instance, you can get $50,000 on the trade of $1000. However, at the same time, the risk of losing trade is there and loss will also be magnified.
The account details also include commissions and spreads. It is where the brokers make money. They are likely to charge you a certain percentage of the spread. Certain brokers may advertise that they make money on the wider spread. It is really hard to rely on wider spread particularly when people are trading common pairs of currency that include Euro to USD or GBP to USD etc.
The next thing which you should consider in account details is the initial deposit. Most of the time, you can open the forex account with as low as a few pounds. When you combine it with leverage, you get a greater buying power. It is perhaps the biggest reason why forex trading is attracting new traders and investors to the market. Even brokers have started offering standard, mini and micro accounts to individuals depending on the money they initially deposit.
Last but not the least, you should have ease of deposits and withdrawals. With any forex broker, you should consider the withdrawal and funding policy. Most of the brokers will permit you to add value to your account through various ways. These include the bank transfer, online transfer, PayPal, etc. When it is about withdrawals, you may consider the wire transfer or check. Not all but certain brokers may charge you for these actions too.
Currency pair that brokers offer
There are a number of different currencies that are being used all over the globe. However, only a few of them grabs the attention and, therefore, most of the trade is carried in these currencies. They include the USD to JPY, EUR to USD, USD to CHF (Swiss Franc), GBP to USD, and vice versa. A broker may offer to trade in only a few pairs while others may allow you to deal with a number of currencies.
So, these are a few things that you should consider while choosing the top forex brokers UK. Other than that, you may like to take a glance at the customer service. As the forex trading goes throughout the day, support must be available 24 hours. Moreover, they should also provide a considerable trading platform to the individuals.