Are you interested in starting a Forex trading career and have finally decided to learn the “little secrets of the great masters?” Are you exclusively interested in specific currency pairs? Do you want to know how to pick the best UK CFD broker currently on the market?
If this is your case, it is imperative that you have a complete idea of what a Forex broker actually represents and that you know crucial things about these currencies. As you may have learned, Forex is an acronym for foreign exchange. Forex broker refers to a financial service company that allows traders access to a platform for purchasing and selling foreign currencies.
This broker may also be known as a retail broker or currency broker. Clients of Forex brokers include extensive financial services that trade for investment banks and other customers. Also, in addition to that, they have retail traders speculating on the direction of currencies.
Why is it essential to find a relevant Forex broker in the UK?
Choosing a quality and relevant Forex broker in the UK is vital. This is because the internet is currently full of scam brokers who can harm traders in any way. Therefore, while looking for the best UK CFD broker for your trading business, make sure that your preferred broker is regulated by financial regulators, giving it credibility and relevance.
So, when you opt to trade with foreign exchange currency, it is crucial to keep your finances safe. The reason for this is that a significant number of people rush into it. In fact, one trader cannot know for sure whether the company is regulated or not. You may never get to see your funds again.
Therefore, it’s recommended that you, as a resident of the United Kingdom, visit the FCA website first. Make sure to check if the broker you find interesting enough. If all is well with your preferred company, you may feel free to open your trading account.
However, before we introduce you to the best CFD brokers in 2021, it’s essential to understand what CFD trading is in the first place.
CFD definition – find all the fundamental information
CFD is short for Contract for Difference. It represents a specific contract between buyers and sellers that determines that a buyer is responsible for paying the seller the difference between the present value of one asset and its value at contract time.
Contract for Difference provides investors and traders with an excellent opportunity to profit from price movements without the need to possess the underlying assets. In short, this financial contract pays the Difference in price settlement between opening and closing trades and is very popular in Forex products.
What you need to keep in mind
Keep in mind that CFD contract value doesn’t include the asset’s underlying value. It only consists of the price change between the entry and exit of the trade. It’sIt’s results through a contract between broker and client that doesn’t use any commodity, stock, forex, or futures exchange. CFD trading offers numerous advantages that increase the instrument’s huge popularity in the past ten years.
Where can you trade CFDs?
CFD contracts are prohibited in the United States of America. They’re allowed in listed, OTC (over-the-counter) markets in numerous big countries such as the UK, Spain, France, Germany, Switzerland, Italy, Norway, Sweden, Singapore, Africa, New Zealand, Canada, Hong Kong, Thailand, Denmark, Netherlands, and Belgium.
How does CFD work in the United Kingdom?
One of the main questions in this industry regarding where to find the best UK CFD broker in 2021 is how it actually works. In short, Contract for Differences trading in the UK is when brokerage firms and investors make a contract in order to exchange the difference in the value of an asset between the sell and buy price.
Traders can choose to open leveraged positions. That will multiply all the results of a single trade. Remember, no underlying asset gets exchanged in this case. In addition to this, CFD trading is legal in the UK, and in recent years, it has gained much popularity.
So, now that you’ve got the brief explanation of CFD, let’s move on to the best CFD brokers the UK has to offer, shall we?
Best CFD Brokers UK edition in 2021 – Get to know them all
It’s widely known that the role of a broker is to provide traders access to trading platforms. Therefore it’s crucial to learn what are the best UK CFD brokers at the moment. As you know, CFD trading in the United Kingdom has boomed in a recent couple of years with the increase of online retail trading.
What’s interesting is that the UK is credited for the invention of the Contract for Difference. Britains were the first people on the planet to trade on the London Stock Exchange market in the early 1990s.
To help you choose the best UK CFD broker in 2021 for your trading needs, we have made the CFD broker comparison in a way that we’ve compared spreads of UK CFD brokers, features, and trading platforms.
Remember, a great majority of these CFD brokers are FCA regulated. Here is the CFD brokers list of the best ones in the UK this year:
These brokers are considered the Best UK CFD broker companies in 2021 so far. This is according to their CFD trading UK reviews and positive comments across brokerage forums. However, before starting CFD trading, it’s important to note which beginner mistakes you should avoid.
CFD trading beginner’s mistakes to avoid
As a beginner CFD trader, it is essential to keep in mind that numerous scam companies use “clone names” to make them appear reliable. However, if you get a call out of nowhere with a company that claims that you checked out a long time ago, you are always able to check it at the official FCA page.
There is even a handbook on their official website that includes a set of rules one CFD broker in the United Kingdom needs to follow to become a registered company. It’sIt’s advisable to talk to financial advisors if you’re not an experienced CFD trader.
Is CFD trading legal or not?
For those of you who aren’t quite sure whether CFD trading is legal or not, it is crucial to understand that CFD is banned in the United States of America. Both, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) prohibit residents and citizens in the USA from opening CFD accounts on foreign and domestic platforms.
Therefore, in part, CFDs are considered to be partly illegal since they’re an OTC (over-the-counter) product. This means they do not pass through regulated exchanges.
Remember to dip your toe in the water and first understand how the stock market operates in the first place. Before deciding to open a trading account at the best UK CFD broker in your opinion, you find the best for your needs. Double-check it first, especially on the official FCA website. Good luck!