The Ultimate Guide to Forex Trading UK
Contents
- Forex Trading UK for Beginners
- Forex Trading Hours in The UK
- What Is The Optimal Time for Forex Trading?
- Forex Trading UK Tax
- What Is The Best Day for Forex Trading?
- How Can You Learn Forex Trading in The UK?
- Who Should Take a Forex Trading Course in The UK?
- Selecting A Forex Broker in The UK
- How To Open A Forex Trading Account in The UK
- What Forex Trading Platform Should You Use?
- Some Useful Tips To Know Before Embarking on Forex Trading
- Conclusion
Forex Trading UK for Beginners
What is Forex Trading? Forex Trading UK involves the buying and selling of various currencies. You get your profit from the price difference, from when you buy and when you sell it.
Forex Trading for beginners applies some of the basic principles of stock trading. The difference though is that while stock trading involves trading stocks, Forex trading involves currencies.
What does it mean to trade currencies? Let's see a practical example. Forex Trading happens to occur in currency pairs. So if at a certain time you ascertain that the USD is cheap, you can sell the Euro and buy the USD. Having made a profit from selling the Euro, you would hope to sell the USD at a time when the price is high.
So what are the merits of trading in Forex? Why are several of your friends trying to get you to take up Forex Trading? The reasons are not farfetched actually. They include:
• Low criteria for entry: We have seen that money and disparities in income can be a determining factor in embarking on a business venture. But that is not the case with Forex Trading. Several brokers permit you to start your trading journey with as low as $100! See? Very accessible for many.
• Low-risk potential: despite popular beliefs, money is not easily lost in Forex Trading_ if you work smart anyway. Not only this, you have the option of trading only micro-lots. This greatly reduces your propensity for risk. As simple as trade little, lose only a little. The Forex market is not riddled with gaps like the stock market. Therefore, you'll find that you can't lose greater than expected.
• Enter and exit positions with no harm: Did I mention that the Forex market is the largest in the world? Yes, it is! A purported amount quoted in trillions is traded every day. The advantage of this is that you can enter and exit trades as many times as you care, with no damage to your positions.
• Low processing fee: several brokers in forex trading do not charge you any amount for a transaction. This is unlike stock trading where brokers charge fees for any transaction.
• Unrestricted Trading hours: you could trade round the clock in Forex Trading. This of course includes weekends too. Whereas in stock trading, you're not afforded this advantage.
Forex Trading Hours in The UK
As I said earlier, the Forex market is open 24-hours in a day. However, it is divided into different trading sessions. We have the North-American, European, and Asian trading sessions. They are also popularly called the New York, London, and Tokyo sessions respectively, representing the biggest financial centers in these regions.
The European session begins immediately with the closure of the Asian session. London takes the lead among other potential financial markets in the region, even to date.
Business hours in London starts from 7 am to 3:30 pm. To accommodate other capital markets in the region, it has been adjusted to 7 am to 4 pm.
Let's see the duration of each of these sessions in UK time.
European Trading sessions
• London Session: 7 am to 4 pm
• Asian Session: 11 pm to 8 am
• North American Session: 12 pm to 8 pm
What Is The Optimal Time for Forex Trading?
If you're a long-term trader I have wonderful news for you. There's no best time to trade Forex. You can trade at any time. This is because your trades can remain valid for several weeks or days.
On the other hand, an intraday trader would best trade at certain hours of the day. This is during the London session. Why? Because during this period, trade moves faster, and for an intraday trader that gives you several avenues to trade.
Forex Trading UK Tax
Starting as a new trader, you would want to know if Forex Trading in the UK is taxed. Truth is it is not taxed in the UK. Under the tax law in the UK, Forex Trading is categorized as spread betting. It is seen that since Forex Trading involves taking positions on whether the market will rise or fall, it is gambling. Therefore, it is a fleeting environment and should be left tax-free.
What Is The Best Day for Forex Trading?
The best day to trade on Forex is typically the day the market moves the most. This is because the faster it moves, the more trading chances you get. So far, the best days to trade are Tuesday, Wednesday, and Thursday ass you can see from the picture below.
How Can You Learn Forex Trading in The UK?
There are two ways to begin this journey.
1. Learn Forex Trading online.
2. Start a Forex Trading UK course
Honestly, in this time and age, the best way to learn Forex Trading is online. Let's see some of the reasons why:
1. The internet is free
Starting as an amateur who is keen on learning, it is best you use a medium where your resources are endless. Learning Forex Trading online also helps you taste the waters without investing anything in this venture. You can get a glimpse of what you're about to embark on and determine if Forex Trading is your forte or not. If you determine that it's not for you, you can exit graciously, having not spent a dime on trading courses.
2. Not Everyone Can Do Forex Trading
Imagine spending about £4,999 on a trading course only to realize Forex is not something you want to do_ very painful! That's why your best bet remains to learn to trade Forex online.
Forex Trading is generally a risky adventure. But should your risk-taking skills be tested from simply learning? I think not. Let's reserve that emotional rollercoaster for later.
Having said all these, let's see a summary of some of the reasons why online Forex learning beats a Trading course.
• You're the master of yourself, therefore you can study at your discretion.
• Unlike trading courses, you can be refunded your money in online courses.
• The trading courses online are way cheaper than live trading courses.
• Online trading courses give you continuous updates.
• Because their teaching materials are online you can review them at any time you please. You have access to them 24hours in a day.
There are many benefits to learning how to trade Forex online. However, this is not convenient for everyone. So for those who do not find this convenient, your only other option is to take a Trading course.
Who Should Take a Forex Trading Course in The UK?
• If you learn better in a physical classroom.
• If you want to find and connect with other traders and possibly make new friendships.
• If you have the means and wherewithal to fund your learning course comfortably.
• If you're keen on getting answers to questions immediately.
• If you require a tutor to guide and direct you every step of the way.
Looking at the above reasons, if you would respond in the affirmative to any of these reasons then you should start a Forex Trading UK training. I also recommend you follow Forex Trading UK Reddit. They have very inciting conversations there.
Selecting A Forex Broker in The UK
You must select a good Forex broker because a lot would depend on them. Here are some things you should consider before selecting a stockbroker.
1. Check if they offer good customer services and support.
2. Check if they offer the market you're interested in.
3. Find out if they are sanctioned in some strict countries like Australia.
4. Find out if you can withdraw your money quickly.
5. Check if they provide the trading platform you're interested in.
6. Determine if the broker is regulated by the Financial Conduct Authority which censors Forex Trading in the UK.
How To Open A Forex Trading Account in The UK
1. Go to the Forex broker's website and fill their registration form.
2. Then, confirm your account on your mobile phone.
3. Verify your identity based on the broker's security requirements.
4. Then log in to your account on the broker's website.
What Forex Trading Platform Should You Use?
First of all, what is a Trading platform? A Forex Trading platform is a software application that enables you to draw lines, plot indicators, and view charts, and so on.
The two most prominent trading platforms so far are MT4 and Trading View.
Let's start with Trading View.
Trading View is the latest Forex Trading platform available now. It is a cloud-based application.
Pros
• It has numerous trading tools and indicators.
• It comes free of charge and you can upgrade to get new features.
• Many descriptive charts and layouts
• It features, Forex, cryptocurrencies, CFDs, and stocks.
cons
• It can only insert three indicators at a time.
• There are plenty of ads in the free version.
• It doesn't execute trades for many Forex brokers. It mostly only charts them.
MT4
MT4 has been around for a long while. Unlike Trading View, it is a desktop application.
Pros
• It is fast
• It is free
• You have the opportunity to execute trades on MT4 directly.
Cons
• There are some bugs contained in it such as the “flying” trendline.
• It has no support
• There are a few trading indicators. You often have to code them or get them from the internet.
In Conclusion
If you hope to execute your trades on the same platform then you should opt for MT4. If you're looking for additional features like indicators, then go for Trading View.
What Are The Best Forex Trading apps in The UK?
It would interest you to know that all of the best forex trading UK app is free! They include:
2. eToro Social Trading App
3. Pepperstone Trading App
4. Plus500 Trading App
5. OctaFX Trading App
6. FXTM Trading App
7. easyMarkets Trading App
8. XTB Trading App
9. Markets.com Trading App
Some Useful Tips To Know Before Embarking on Forex Trading
1. You Won't Get Rich Quick in Forex Trading
Well, technically you could but that's a very dangerous mentality. I advise amateurs to unlearn that mentality. This is because quite frankly, trading Forex takes a lot of patience and practice.
Do not fall for any scam scheme that promises you millions quickly when you trade in Forex.
2. Take The Conservative Route.
I'd like to explain with an example.
So imagine there are two traders. Michael and John.
John is a conservative trader and he risks 2% of his account every day.
Whereas, Michael is an aggressive trader. He risks 25% on his account every day.
So it happens that they both use a trading strategy that wins 50% of the time. This is accompanied by an average 1:2 risk to reward.
Here is the result of their individual next 8 trades.
Because the outcome was, Lose-lose-lose-lose-win-win-win-win.
So For John, it is
– 2% – 2% – 2% – 2% + 4% + 4% + 4% + 4% = +8%
For Michael it is
– 25% – 25% – 25% – 25% = BLOW UP
Do you see why the conservative route is always best? No matter how good your trading system is, you should strive for good risk management.
3. Have A Good Trading Strategy
Like all business ventures, Forex Trading should have a plan and the strategy you wish to execute these plans. A lot of amateur Forex traders get stuck because they never sat down to plot their trading strategy.
A well-detailed plan should include some of the following.
• The market you decide to trade in
• How to exit a trade when you're at a losing position
• The number of units you want to buy
• How to exit a trade when you're right
• The amount you're willing to risk in each trade.
• Determine your entry trigger
4. Find Out What You Want To Achieve And Work Towards It
People set out as Forex Traders with different goals at the forefront or back of their minds. Each of these goals requires different strategies, that is why you must ascertain your goal and then streamline your efforts towards it.
For people who want to trade for an income, an intraday trading approach is your best bet.
If you want to trade aggressively with a lot of adrenaline rush and all, then systems Trading is the way to go. You can trade with 100 times leverage just before NFP.
If you're looking to multiply your wealth, then swing trading is the way for you.
You can see that good knowledge of the route you want to take is paramount before you start trading.
Conclusion
Forex Trading UK is an art. You wouldn't become a pro in a matter of days. It takes constant practice to become proficient.
The Forex Trading environment in the UK is a very lively one and the most active in the world. A lot of information to guide your learning is available here. Open your mind and be willing to put in the work required to become proficient in trading.
