The United Kingdom has always enjoyed a stable, independent, and well-developed economy, one of the main catalysts for the industrial revolution. The London Stock Exchange is home to the Footsie (Financial Times Stock Exchange 100 Index), which comprises around 100 of the UK's largest companies. Considering the UK's long-standing financial security, it is understandable it has one of the largest foreign exchange markets in the world, making up 43.1% of foreign exchange transactions that take place in the UK.

Forex Trading in the UK
Forex Trading in the UK Pixabay

Safely Trade Forex in the UK

The UK's forex traders benefit from a strictly regulated trading market with a wide range of locally licensed brokerage firms. The country's brokers are known for the quality of their trading products, transparency, and reputation. All market participants must comply with the uncompromising rules and regulations. In the UK, the Financial Conduct Authority regulates the forex trading industry under the Financial Services Act 2012. This Act effectively created a new regulatory framework that governs all financial services. Forex brokers wishing to operate in the UK must obtain the necessary license from the local regulator. Brokers authorized in the UK are also required to participate in the Financial Services Compensation Scheme (FSCS), which makes provisions for customers in the event that their brokers go bust. Firms and brokers are prohibited from using manipulative practices to attract clients. In addition, they cannot take positions against their clients or provide them with financial advice, especially regarding high-risk trading decisions.

Trading with a regulated broker, such as BlackBull Markets will limit the potential for fraud and malpractice. It is recommended that traders check for regulation and verify it with the regulator by checking the provided license with their database. So, does Blackbull Markets accept UK clients? Although BlackBull Markets is a New Zealand-based forex broker and FinTech company, it is available to UK forex clients. Traders in the UK have access to customer support 24/6 via live chat. The best brokers in the local market also facilitate fast and secure deposits by credit and debit card, which is the second most used payment method in the UK.

When registering with a UK broker, traders are advised to choose the local pound as the base currency for their accounts. This will save traders from paying extra fees for the currency conversion process. Fortunately, all good UK brokers support GBP as the base currency and the other standard options, USD and EUR.

Forex Strategies

Successful forex traders have a well-thought-out strategy and pre-set processes, including a set of rules to operate. In order to protect yourself from making breaking your own rules, it is essential to take your emotions out of your forex trading. Trading can also become stressful, but sticking to a strategy will massively reduce potential stress, helping you be objective about your decisions and mistakes. Developing a systematic trading method that includes risk management is vital, especially for beginner forex traders. As the foreign exchange market is highly volatile, it is important to have entry and exit points in your trading strategy.

Traders can choose between major currency pairs like USD/GBP or exotic pairs like EUR/HUF, then speculate on either rising or falling forex pairs. In order to choose your forex trading pairs, traders carry out both a fundamental and technical analysis.

Many traders use day trading for stocks, but this trading style can also be used in all foreign exchange markets. As day traders place many orders daily, they must choose markets that offer competitive spreads and low commissions. There are several time scales used in intraday trading, and of course, it is best to select a time that suits your availability to become as familiar as possible with how it works. You will have a multitude of trading indicators at your disposal. Concentrate on one or at most two indicators that you are thoroughly familiar with. Trading with risk management systems is fundamental. Although forex trading can be challenging, with commitment, it is possible to learn trading techniques and implement a strategy.

Considerations When Trading Forex

Forex is not a get-rich scheme, contrary to what you might see on YouTube or other online forums. However, it does not mean that trading forex is not a good idea, and many currency traders make a very good living. The difference is that they have slowly and progressively learned to build up their capital so that they can now generate a viable income.

As with many aspects of life, practice is better than theory when it comes to trading and investing. You need to know your trading tools well before you start investing in the markets from your own account. Thankfully there are now many demo accounts available in real-time. Lastly, remember there are no guarantees in trading. Even the best traders do not make 100% of their positions in profit. You should know that you can lose capital due to the volatility of the forex market. Try to find a realistic and risk-free return, and don't believe everything you read on social media and blogs that boast about making astronomical amounts of money.

Conclusion

Trading in the forex in the UK has become increasingly accessible in recent years, primarily thanks to the widespread availability of applications for mobile devices such as smartphones and tablets. These apps are particularly valuable in today's interconnected world, where the forex market plays a crucial role in day-to-day interaction.