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If you are from Europe, the range of the brokers you can choose from is quite substantial. If you have been researching, you may have noticed that the majority of the licensed Forex brokers in Europe would either posses CySEC or FCA license. While Limassol remains the heart of forex in the EU, London has always been the global financial capital. This is why FCA forex brokers are generally more respected and trusted above other brokers. Even though the regulation is reasonably tough to obtain, many institutions managed to become the UK forex brokers. There are also a number of brokers that have lost their FCA license due to misconduct. To help you better navigate through the many FCA brokers, and see who among them are the best, we have compiled the reviews of the best FCA forex brokers.
FCA Forex Brokers Showcase
Every quarter we at TopForexBrokers take a look at the best FCA Forex Brokers, to check their offers, and select the best FCA forex brokers out there. As there are over 50 brokers with an FCA license, we are constantly updating this section and award the most outstanding brokerage with the Best FCA Forex broker title.
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Best FCA FX Brokers Comparison
Albeit FCA brokers are renowned for their quality, some differences are still present, and inexperienced traders may find it challenging to identify those differences. As with the best Forex brokers, we at TopForexBrokers search for the best FCA FX brokers, break them down into categories, choose the top ones, and provides the comparison to you, to give you a clear idea, of what each broker represents and which of them is best suited for you.
What is special about UK Forex Brokers?
The FCA regulated forex brokers are some of the most well renowned in the world, known for their exceptional services and near-perfect conduct, making them one of the most sought after brokerages to sign up with. We have listed the four main reasons, that make FCA brokers stand out from the rest.
Security: FCA Brokers treat clients fairly and won’t hide with your deposit.
Insurance: Your deposit is safe, even if the broker goes bankrupt.
Professionalism: FCA Staff has to pass tests and examinations to be employed.
Resolutions: Your complaints will be handled in a timely fashion and questions will be fully answered.
What is the FCA Regulation and What are FCA Regulated Brokers Forex?
Forex brokers can simply be defined as a gateway to the Forex market. In other words, the majority of Forex traders in the financial market gain access to it through a Forex brokerage. While the majority of Forex brokers out there are completely legitimate and safe to work with, some traders, beginners especially, mistakenly fall victims to scam brokers, signing up with them, allured by the unrealistic promises made by them. This why it is extremely important to pay attention to several key factors when selecting a Forex broker to work with. We shall go over some of the basics of what you need to be paying attention to when looking for a Forex broker to work with.
First of all, you need to check where the Forex broker that you are looking at is located, and under whose regulation it is. If you are looking for the details of a brokerage that is located in the United Kingdom, you can obtain the information from the Financial Conduct Authority, as all the brokers in the UK are regulated by it. You can simply visit the official website of FCA and look for the customer service history of a specific broker. If you find a number of complaints against it from traders, you should probably stay away from it.
The second thing that you as a trader should have, is a clear understanding of the regulations in place. FCA is a self-regulatory organization that is responsible for regulating the futures industry in the UK, along with Forex brokers. The main objective of FCA is to keep traders safe from abuse and fraud, which has become a common issue within the industry. They are also the ones who deal with drafting regulatory frameworks and handling dispute resolution. All the FX brokers who are registered with FCA are obligated to maintain net capital of at least $200,000 as a guarantee for customer positions. This will give the opportunity for all traders to trade with FCA registered Forex brokers without any doubt about the safety of their investments.
All the Forex brokers who are registered with FCA have to follow a set of rules in place. The most important tiles are associated with trading strategies, hedging, and leveraging. FIFO (First In First Out) rule holds the most prominent place among them. Here, all traders are requested to close their old trades first, once they have more than one position open on a specific currency pair. Brokers who are not complying with FIFO will get in trouble with a regulator.
Hedging is not allowed in the Forex trading industry in the United Kingdom. It is the responsibility of FCA registered brokers to prevent it from happening. Moreover, the regulator does not mandate the registered brokers to offer leverage of up to 50:1, which is why you can often get geared up to 500:1 with an FCA regulated broker. However, other brokers offer much higher leveraging than this and we can see some brokers offering leverage of as high as 2000:1. As you can see, it is always preferential to stick to a Forex broker that is registered with FCA, as you are guaranteed to be kept safe away from any unmandated risks.
In contrast to CySEC and other local EU regulators, FCA is usually perceived as the safest choice, which is also true due to the obligation to segregate clients’ funds. Alongside this, FCA guarantees that your deposits of up to £50,000 are secured from brokers’ bankruptcy.
FCA Spread Betting Brokers
In order to earn extra income, a smart approach is to do some investment, for which you need to be skilled enough to make professional forecasts. Before you start trading or investing your funds, you have to learn a few basic tricks to become successful in your spread trading and investments. Whether you are interested in the financial market of stocks, bonds, commodities, or forex, you can easily earn smart profit from spread betting. This, however, is only possible if you are wise enough and know the basic techniques of this type of betting. In spread betting, you should be aware of financial securities, the current value of the stock, and should keep in mind the tips and strategies to bet successfully, so that you always make a net income.
What is Forex Spread Betting?
The original concept was devised in the UK from sports spread betting, but when it was amalgamated with enormous potential profits offered by the financial markets, investors rapidly realized that this type of betting can prove to be a more beneficial strategy to earn a maximum turnover.
Similar to traditional buying of shares from the market and selling them for profit, spread trade relies on correct betting on the rises and falls of the current market prices. However, you do not own the assets on which you are trading. Instead, the profit and loss simply depend on the uplifts and declines in prices of underlying assets, relying on the current status of the marketplace. It is an easy way of guessing whether there will be an increase or collapse of prices. How much you will gain or lose entirely depends on the increase or the decrease of the market, similar to the traditional style of buying shares and selling it when the price increments.
This type of betting is not for everyone, but it does hold a wide demand due to its versatility and potential returns. It is necessary to research the product you are interested in well, and you should have at least a basic knowledge of how the process works.
You should be aware that when you make any capital investment, there are many advantages, but the risk involved are substantial as well.
What is the difference between Forex Trading and Spread Betting?
In general, the difference is minuscule. As spread betting is only applicable to the UK, the main idea of spread betting on Forex is how the tax office sees your activities. If you are trading Forex or on any other markets, you are expected to pay taxes, as the profits delivered from trading are in fact, capital gains. When you are making spread betting, this is seen by the tax authorities as gambling, hence you are not required to pay taxes on your earnings. In other words, Forex spread betting account is essentially the same Forex trading account, yet it comes with no tax expenditures.
Advantages of Spread Betting
- The investors can earn profits both from the rise and fall of prices in the market. You just have to make smart bets.
- No broker or dealing fees are incorporated in the trade.
- In most countries, this type of trading is exempt from tax and stamp duty.
- You can trade on margin, which means maximizing profits through power.
- You can access financial markets worldwide through a single account and currency.
Risk in Spread Betting
The major risk involved in this case of betting is the potential of exaggerated loss due to power or influence factor. For this, it is essential that you make sure that you are only investing money that you can really afford to lose. Having substantial knowledge of the INS and having out of the market help will prove decisive in your ability to make smart and sensible bets, ensuring that you will profit at the end of your trades.