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Forex brokers let you speculate on the difference between different foreign currencies through spot, CFDs, or financial spread betting. We have ranked, compared and reviewed some of the best forex trading platforms and brokers in the UK that are regulated by the FCA

CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Best Forex Brokers 2022

We have ranked and reviewed the best forex platforms based on:

  • over 7,000 votes in our annual awards
  • our own experiences testing the forex brokers with real money
  • an in-depth comparison of the features that make them stand out compared to alternatives.
  • interviews with the brokers CEO and senior management
  1. City Index: 4.7/5
  2. IG: 4.7/5
  3. Interactive Brokers: 4.6/5
  4. CMC Markets: 4.6/5
  5. Saxo Markets: 4.6/5
  6. Spreadex: 4.3/5
  7. Pepperstone: 4.1/5
  8. eToro: 3.9/5
  9. XTB: 3.8/5
  10. Markets.com 3.8/5

City Index

City Index: Best overall forex broker 2022

City Index won “best forex broker” in our 2022 awards as they offer a huge amount for forex pairs (182) different accounts types including, spread betting and CFDs as well as Forex trading signals (SMART Signals) and post-trade analytics from Performance Analytics.

Pros:

  • Forex trading signals
  • Post-trade success analytics
  • FX news, research & analysis

Cons:

  • No futures
  • Options only as a CFD or spread bet

74% of retail investor accounts lose money when trading CFDs with this provider

Interactive Brokers: Best for on-exchange forex trading

Interactive Brokers is by far the most advanced forex broker we feature, if you need it to be. Interactive Brokers is one of the best forex trading platforms for advanced and experienced traders, but is also simple enough to be used by beginners who want to stick with one brokerage as they progress.

Pros:

  • Lots of FX pairs
  • Excellent platform
  • Low commissions

Cons:

  • US-based
  • No spread betting

60% of retail investor accounts lose money when trading CFDs with this provider

CMC Markets

CMC Markets: Best forex trading sentiment indicators

CMC Markets is suitable for forex traders who want tight pricing with robust technology, but also the options to trade peripheral markets should opportunities occur. CMC Markets won three awards in 2020 for its FX product, including our own Good Money Guide Best Forex Broker award, and it remains one of the best services out there.

Pros:

  • Tech heavy FX trading platform
  • Wide range of FX pairs
  • Good sentiment indicators

Cons:

  • No DMA for retail clients
  • Limited FX options

76% of retail investor accounts lose money when trading CFDs with this provider

Pepperstone

Pepperstone: Best for trading forex on MT4 & MT5

Pepperstone offers some of the tightest forex trading spreads in major FX pairs and minor and exotic crosses are are also available which you can either spread bet or trade CFDs on forex. Liquidity, pricing, and execution time on Pepperstone’s platform are good given its access to multiple Tier 1 banks.

Pros:

  • Good MT4/MT5 indicator package
  • Automated FX trading
  • Tight pricing

Cons:

  • No futures or options
  • Limited market range

74% of retail investor accounts lose money when trading CFDs with this provider

IG: Best for forex liquidity and trading tools

Due to its size IG offers some of the best liquidity for forex trading, meaning that smaller clients get tight pricing and high volume forex traders won’t find it hard to execute larger orders. IG’s forex trading offering is one of the best around with a  wide-ranging and competitive margin FX service across several dealing platforms which will comfortably meet most retail traders’ needs.

Pros:

  • Excellent market range
  • Good news, analysis & signals
  • Deep FX liquidity

Cons:

  • No futures
  • Options only as a spread bet or CFD

73% of retail investor accounts lose money when trading CFDs with this provider

Saxo Markets: Best for DMA forex trading

Saxo Markets is an excellent forex broker suitable for experienced traders who want a robust forex trading platform with an institutional pedigree. The ability to trade on exchange forex futures, or on exchange FX options gives Saxo Markets the edge over most forex brokers who just offer CFDs or spot FX

Pros:

  • DMA FX
  • Lots of FX options
  • Good forex analysis

Cons:

  • No tax-free spread betting
  • Platform a little complex for beginners

70% of retail investor accounts lose money when trading CFDs with this provider

Markets.com

Markets.com: Good range of forex pairs

Markets.com is a good choice for forex trading on a simple-to-use trading platform with access to the major FX and some exotic pairs, most suitable to new traders who just want a click and trade platform that is well laid out and easy to use.

Pros:

  • Easy-to-use platform
  • Good pricing on major FX pairs

Cons:

  • Exotic FX pairs expensive
  • Limited market range

77% of retail investor accounts lose money when trading CFDs with this provider

Spreadex Financials

Spreadex: Best for customer service

As with Spreadex’s other product offerings the FX proposition is competitive when viewed against their peers and the availability of contracts based on FX futures is a string to their bow that even many specialist FX brokers don’t offer.

Pros:

  • Excellent service
  • Good range of FX pairs

Cons:

  • No DMA
  • Limited FX options

69% of retail investor accounts lose money when trading CFDs with this provider

XTB

XTB: Good for low-cost forex trading

Overall, as a Forex broker XTB provides good access to the currency markets, with tight pricing, and is most suitable for smaller traders who want to trade forex as part of an overall offering. 

Pros:

  • Intuitive forex trading platform
  • Good educational material

Cons:

  • Limited FX pairs to trade

 

77% of retail investor accounts lose money when trading CFDs with this provider

FXTM

FXTM: Good for forex-only traders

FXTM is an online forex broker and CFD trading platform founded in 2011. FXTM has over 2 million registered users trading, which can trade 200 financial markets, (including 61 forex pairs) via the MT4 (Metatrader 4) of the FXTM mobile trading app.

Pros:

  • Focuss on forex trading

Cons:

  • Hardly any other markets

77% of retail investor accounts lose money when trading CFDs with this provider

eToro

eToro: Best for forex traders who want to copy others

There are two aspects to eToro’s forex trading offering that makes it stand out. Social trading where you can copy other traders trades and the ability to set your own leverage. This enables clients to take more or less risk when trading relative to their account size.

Pros:

  • Social and copy FX trading
  • Easy to use platform
  • Set your own leverage

Cons:

  • Accounts in USD only
  • Spreads can be wide
  • Expensive overnight financing

77% of retail investor accounts lose money when trading CFDs with this provider

Best forex broker for beginners

City Index is one of the best forex brokers for beginners as it has a wealth of educational videos, analysis and trading signals as well as offers forex CFDs and spread betting.

Established names like IG Group score well as a broker for those that are new to trading or have a small deposit. However, there are alternatives to consider as well. Both CMC Markets and Spreadex can accommodate smaller deposits and new forex traders. Both of these businesses have straightforward intuitive trading platforms.

Trading with smaller deposits is popular among new traders who are reluctant or unable to commit a large amount of capital to FX trading. Over time, they may increase their trading deposit as they become more familiar with the way FX trading works and more confident in their ability to make a return on their trading capital.

Best forex broker for experienced traders

IG Group was voted the winner in the Best Professional Trading Account category in our 2020 awards, whilst Saxo Markets won Best DMA Broker for those that would like to trade on exchange FX futures.

For high net worth individuals who are likely to have deposits over the £85,000 FSCS limit, it’s important to look for a provider with a decent balance sheet and a good track record. For example, IG Group has a market cap of £2.79 billion and has been in business for more than 40 years. Fineco is a fully-fledged and listed Italian bank with a market cap of €9.0 billion. Whilst privately held Saxo Bank Group had a total balance sheet equity of DKK 7.082 billion in 2019 and is 50% owned by Chinese conglomerate Geely Holdings.

Professional traders need to meet strict criteria around experience, knowledge of volumes traded and financial wherewithal. If you do qualify as a professional trader, you will enjoy higher rates of leverage and access to a wider range of products than retail traders. Professional traders are the most profitable group for FX brokers and they tend to offer those clients additional perks as well.

Best forex broker for spread betting

As an alternative to trading CFDs on forex , individuals and UK taxpayers can spread bet on foreign exchange.

Spread betting, as the name suggests, are wagers on the performance of an instrument or market rather than a trade, and though the methodology and pricing of these two types of transactions can look very similar, the tax treatment of any profits made in them is very different.

Profits made from trading are subject to UK capital gains tax, whilst under current legislation, profits generated through spread betting are tax-free. By the same token, losses made in trading can be offset against capital gains made elsewhere, whilst spread betting losses cannot.

For more information forex trading tax, read our Q&A: Do you have to pay tax on forex trading?

The tax treatment is the principal difference between the two forms of speculation, however, some spread bets may be priced in a similar way to futures contracts; that is with the cost of carry or financing included in the quote at the outset, rather than being charged daily, as is the case in forex trade. Spread bets are also likely to have a fixed expiry, whether that’s daily, weekly or quarterly. While FX trades, which are effectively CFD trades, have no fixed expiry unless you are trading a currency future or option, rather than the rolling spot contract.

The mechanics of spread betting on FX are very similar to those of trading FX. Of course, you will need to open a spread betting account to spread bet, rather than a trading account. You will also want to familiarise yourself with the bets that spread betting providers offer and the contract lifetimes, and the way that they are priced that could be very different for say a rolling daily bet, a weekly bet or indeed a monthly or quarterly bet.

One obvious thing to try to do is to match the contract you are going to be betting on with your time horizons, and style of speculation daily bets won’t be much use to you if you have a two- or three-week-time horizon. Equally, a quarterly contract may not be your best choice if you are an intraday bettor.

Best forex broker for options

Saxo Markets is the best broker for trading forex options as they offer them as CFDs or on exchange contracts and have a intuitive and robust currency options chain on their SaxoTraderGo platform.

Forex options are exchange-traded and listed currency options on the CME, which offers 24 different contracts. Options are a form of derivative that confers the right but not the obligation on a buyer of the contract, to be able to buy or sell a predetermined amount of the underlying instrument that the options contract is over.

Sellers or writers of options contracts are obligated, however, and must buy or sell the specified amount of the underlying instrument if they are called upon to do so during the lifetime of the contract.

Options trading allows a trader to speculate on a potential outcome over a fixed time with a small stake. Options contracts are traded in series, for example, on a monthly rotation, and options are offered over a range of levels above and below the current price, which are known as strike prices.

Options also come in two different flavours: Call options, which confer the right to buy, and Put options, which confer the right to sell.

So if we have a rotation or series of 12 monthly contracts with 20 strike prices in each month, and both puts and calls available, we have 12*20*2 potential trade combinations. That’s 480 opportunities, and that is just what’s available for one instrument. That compares very favourably with the binary choice of buying or selling in a standard FX trade.

Options have a finite life and to some extent, the valuation or price of an option over its lifetime is predictable in advance. Largely because the time value of options decays at a known rate and with a particular profile. The time value component of an option erodes more quickly the closer we get to the expiry date, and once the time value of the option has been eroded, the option contact only has an intrinsic value if it is in the money.

That is, the strike price of the option is advantageous compared to the current price of the instrument that the option is over. Such that you can buy the underlying more cheaply than the current offer price, via the option, in the case of a call. Or sell the underlying at a higher price than the current bid in the case of a put option. The more in the money an option is, then the higher its value.

Option prices are driven by other factors, including interest rates, volatility, or the propensity for rapid price change in the underlying instruments, and they are sensitive to changes in key ratios used in pricing models. Those sensitivities are known as the Greeks, as they are named after letters in the Greek alphabet.

As well as exchange-traded options or CFDs over the same, there are OTC options on FX and among those are exotic options. Options are considered complex products and exotic options even more so, and as such, these are not products for inexperienced traders. Only those with a clear understanding of the pricing mechanisms and risk-reward profiles of options should consider trading them.

Best forex broker for futures

Interactive Brokers offer one of the best solutions for trading on exchange forex futures as they are one of the cheapest and biggest brokers globally.

Most FX futures are denominated in USD and traded through exchanges like the CME. You can see more info on the CME FX Futures here.

FX futures are set in lot sizes and deliverable at a certain date in the future. So the price will be slightly different from the underlying mid-market because the futures price is based on the cost of carry (determined by the prevailing currency interest rates).

When trading on exchange you can see the order book (in lots) and work bids and offers inside the market prices, just like trading stocks on the stock market.

When trading on exchange FX, you can also trade FX options – to do so you need a futures broker (not a CFD broker).

Best DMA forex brokers

For spot FX there is no central market – foreign exchange prices are determined through various liquidity providers.

Platforms like Currenex offer a form of DMA, whereby the platform aggregates orders from multiple brokers showing liquidity depth. Although this is still an OTC market.

You can work orders inside the price, but it’s not as functional as an established exchange.

Also, when trading SPOT FX, your positions are rolled T+1, rather than settling at a set date in the future.

Things to consider when trading FX DMA:

  • With DMA FX trading there will be commission added to the trades.
  • With CFD FX brokers and spread betting commission is generally built into the price making it easier to calculate P&L.
  • It may not be worth trading DMA FX if you only have a small account.
  • DMA brokers tend to only offer accounts with competitive pricing to large private and institutional accounts.

Best forex broker for EURUSD

Pepperstone is the best forex broker for trading EURUSD with spreads starting from 0.13 pips.

For this ranking of the best forex trading platforms to trade EURUSD we have ranked by which forex broker has the cheapest trading costs. For a more in-depth comparison of forex brokers that offer EURUSD trading view our EURUSD forex trading platform comparison,

Best forex broker for GBPUSD

Pepperstone is the best broker for trading GBPUSD based on their spreads of 0.44

For this ranking of the best forex trading platforms to trade GBPUSD we have ranked by which forex broker has the cheapest trading costs. For a more in-depth comparison of forex brokers that offer GBPUSD trading view our GBPUSD forex trading platform comparison,

Best forex broker for USDJPY

Pepperstone is the best broker for trading USDJPY based on their spreads of 0.25 pips.

For this ranking of the best forex trading platforms to trade USDJPY we have ranked by which forex broker has the cheapest trading costs. For a more in-depth comparison of forex brokers that offer USDJPY trading view our USDJPY forex trading platform comparison,

Which is the cheapest forex broker?

Pepperstone is generally one of the cheapest brokers for forex trading

Forex brokers charge clients by either widening the spread or charging commission after you trade.

The benefits of using a broker that widens the spread are that you always know exactly what your entry and exit points are and don’t have to factor commission into your P&L. When brokers widen the spread they are including their commission in the bid/offer price that you trade at, so for example if a brokers commission is equivalent to 1 pip and the interbank buy price EURUSD is trading at 1.05123 you will be able to buy it at 1.05124 a 1 pip mark up. The disadvantage of using a broker that charges by widening the spread is that you have to trade at their prices and cannot work bids or offers in the market. City Index is an example of a broker that includes commission in the spread, and average spreads for EURUSD are 0.5, GBPUSD is 0.9 and USDJPY is 0.9 pips.

In our comparison table of forex speads we averaged out the top ten traded forex pairs and to see which forex trading platform was the cheapest. Pepperstone came out as having the overall cheapest spreads for forex trading with an average spread of 0.323 followed by XTB (0.446) and then Spreadex (0.451).

The other way forex trading platforms charge is to add a commission after you trade. When this happens the bid/offer price you can trade at will be better, but you will be charged a commission from your account. This could be for example 1 pip per trade, with a minimum commission fee. This type of trading is more suited to higher volume or larger traders who scalp the market for short-term profits, or work large orders over the available volume on the order book. Interactive Brokers for example caters to sophisticated forex traders and charges a commission of 0.0008% on forex trades.

Which forex broker offers the most currency pairs?

CMC Markets offers the most currency pairs with 338 currency crosses to trade.

There are as many potential FX trading combinations as there are currencies in the world, however, not every single currency is tradable or liquid, and in developing markets in particular, exchange controls are often in operation, which limits the availability of that currency.

On the face of it, that shouldn’t affect the cash-settled, non-deliverable contracts traded in rolling spot FX and spread betting. However, in practice, it does because these contracts are priced based on the underlying deliverable markets.

Alongside the FX majors, we have what are referred to as crosses. Crosses are FX rates that don’t include either the US dollar or the euro. So, for example, GBPCHF, the British pound versus the Swiss franc, is a pair that’s composed of two currency majors, but not the dollar or the European single currency.

In the table below, we have set out some examples of tradable pairs and crosses but there are many more combinations available. However, margin FX brokers do not make prices in all FX pairs and crosses largely due to liquidity constraints and the cost of dealing, or the width spreads in the less liquid offerings.

The most you should expect to see on offer are between 50 or 60 combinations, although many brokers may have a more restrictive list than this. It is also worth noting that leverage ratios can be tighter in less liquid FX rates as well.

Whilst it is important to note that having a wide range of forex pairs to trade is helpful if you scanning the entire market for price patterns (for example with City Index’s SMART Signals), the more exotic (or less common) a currency pair the harder it will be to trade.  Exotic currency pairs are generally harder to trade because there is less liquidity, meaning fewer buyers and sells, which results in wider prices (bid/offers) which means the market has to move more before you can lock in a profit on a trade.  There is also less news flow than on vanilla (more common) currency pairs, which is one of the major factors that move currency prices.

Which currency broker offers the most leverage?

All retail forex brokers regulated by the FCA offer the same margin of 3.33%

Being able to trade forex on margin means that you can leverage your risk capital (money) to get more exposure to the market.

The main advantage is that you only need to put down a small deposit to open forex positions, for retail traders the FCA has stated that you need to put down a minimum of 3.33% of the value of a trade. So with brokers like City Index or IG, if you want to trade £100,000 you only need to put down £3,330 as margin (this is called initial margin). You will of course need to put down more if the trade more if the market moves against you to cover your losses (this is called variation margin).

The obvious disadvantage is that it is possible to lose money quickly and losses are multiplied significantly. If you are putting down a margin of 3.33% it means you are trading with 30 times leverage so if you have a position using £1,000 in margin on a £30,000 position and the market moves against you by 1% that means that you lose, £300, which is nearly 30% of your initial margin (deposit).

It is possible to lower your margin rates with a forex trading platform like eToro who let you set your own leverage if you want to reduce your exposure. It is also quite common for brokers like City Index to let you trade via an amount rather than on a per pip basis. It is possible to get higher leverage if you are trading through a professional trading account, but that is only for sophisticated and very experienced high net worth traders.

Which forex broker offers the most added value, research & analysis

City Index offers the most trading signals (though Smart Signals and Tradign Central) and constantly updated analysis and fx news flow.

In our forex platform reviews, we always highlight what a platform does to help traders perform. For example, IG has trading signals from Autochartist, City Index has SMART Signals and CMC Markets provides information on what their profitable clients are trading so you can see where the “smart money” is going.

FX trading and the terminology involved can seem quite daunting to new traders, so it’s important that you feel comfortable with a broker’s offering, and that things that you don’t understand are explained clearly to you. Whether that’s through a website Q&A section or suite videos on YouTube or a help desk. If you find that the broker isn’t able to explain things to you clearly and concisely, then maybe they are not right for you.

In my view, the better the quality for education and added value the better the trading platform. This is because forex brokers that want to form long-term relationships with their clients want them to be profitable traders and to do that traders need to be educated, guided and helped. Forex platforms are not allowed to provide direct advice to clients (see should you use an advisory broker) but they are able to provide educational material to help you become a better trader. After all, the more you trade the more the broker makes from you as a customer.

What forex brokers allow scalping?

IG, City Index, Saxo Markets and Pepperstone allow scalping on forex markets.

Scalping the forex markets is a very popular form of trading as it involves trading in and out of positions very quicky trading to make short-term profits on very small price movements.

Scalping is a well-established FX trading strategy. However, these days, it’s becoming increasingly automated and time-sensitive. So, whilst retail traders can pursue a scalping strategy, they will probably want to find a decent and reliable trading bot or expert advisor to help them with both spotting opportunities and trade execution.

To be effective, scalpers need to have low network latency and maximum platform uptime, and they may wish to consider using a VPS service, which creates a virtual trading platform on a server that is co-located in the same data centre with the broker’s own servers. That service will usually come at a cost, or with minimum volume requirements attached.

Some forex platforms ban scalpers because they find it difficult to hedge smaller positions and some traders take advantage

The most effective way to scale the forex markets is by using an ECN or STP broker, however, you will want to ensure that you know exactly what your cost per trade is because one of the most important facets of scalping is being able to cut or scratch non-performing trades for the lowest possible costs, and of course to make profits on those trades that you don’t cut. But to book a net profit, your trading P&L will need to exceed your trading costs.

Compare Forex Brokers

When choosing a forex broker, there are several key points to look out for, but most importantly, you need to choose a broker that’s the right fit for you. One that matches your trading knowledge, abilities and finances, and other requirements. For example, new traders are unlikely to benefit from opening an account with a broker that’s aimed at experienced algorithmic traders, and those traders won’t thrive in an environment designed for beginners.

The main things to consider when choosing a forex broker are:

  • Market access – how many forex pairs do they offer?
  • Spreads & fees – how much does it cost to trade and how wide are the spreads
  • Minimum deposit – are you able to start trading with a small amount?
  • Account types – does the forex broker offer spread betting, spot, CFD and DMA trading?

What is a forex broker?

A forex broker connects traders to the foreign exchange market so they can speculate on the price of currencies. Forex (foreign exchange) provide trading platforms, back office management, order routing and margin facilities to individuals, professionals and banks for forex trading.

Different ways to trade forex:

These are the main different types of forex trading:

  • Spot – where you buy and sell physical currency in full or on margin
  • CFDs – “contracts for difference” is when you technically enter into a contract based on the opening and closing price of a trade. However, in reality it is similar to Spot
  • Spread Betting – is placing a bet for an amount per pip a currency pair moves
  • Futures – on exchange futures contracts are for set amounts and for certain dates in the futures, usually for more experienced traders
  • Options – you can either trade on exchange or OTC currency options, through a options trading platform

How do online forex trading platforms work?

In this interview, we cover what forex trading is, why and if you should trade forex, what forex pairs to trade, types of forex orders, what are the main risks of forex trading, trading forex around economic figures, technical analysis versus fundamental analysis as well as managing fx risk.

Forex broker FAQ:

Yes, it’s possible to make money trading forex. As with any financial market if you call the market right you can close profitable positions. However, speculating on the currency markets is very high risk and many traders do not make money.

All forex trading platforms in the UK must be regulated by the FCA

Forex trading is a highly regulated industry, for the benefit of traders and brokers. The UK regulator, the FCA (Financial Conduct Authority) ensures that forex brokers are adequately capitalised (have enough money) to provide forex trading services, that they treat their customers fairly and adhere to strict standards of compliance and anti-money laundering.

Never trade with a broker that is not FCA regulated.  You will see many adverts for offshore brokers offering forex trading online, as it is possible for offshore brokers to offer forex trading to UK residents. Being regulated in Cyprus also means that a broker can show that they are regulated in the UK and show up on the FCA register. So if you check the FCA website to make sure a broker is legit, they will show up. But, if they are not fully authorised and regulated by the FCA then client funds are not protected under the FSCS. The FSCS basically protects a certain amount of clients funds should a broker go into administration, see their website for more information here. If your broker is only based offshore you’ll have little hope of getting any money back.

On the Good Money Guide, we only feature forex trading platforms that are regulated by the FCA.

The phrase Day Trading refers to a style of trading that carries no overnight positions; rather, day traders enter and exit a trade within the same business day. This serves two purposes: firstly, it eliminates overnight risk – that’s price changes and news flow that can happen while you are asleep – and secondly, it means that traders don’t incur any overnight financing charges or rollover swaps because their business is traded intraday.

The most popular currency pairs for forex trading are the G10 forex crosses as they are the most liquid with the most news flow.  Of those the top three traded forex pairs are, EURUSD, GBPUSD and USDJPY. For more information read our guide to the top ten forex pairs for trading

Day trading is a very popular trading style but of course, it does limit a trader’s time horizons and tends to push them towards short-term swing and trend following trading strategies.

An FX day trader based in Europe might start their day by looking at what’s happened to the major FX pairs in the Asian session and for price movements that look likely to continue in European trading or indeed those that look like they’re running out of steam.

What might a day trade look like? Let’s imagine that the dollar-yen has changed overnight and the yen has continued to strengthen against the US dollar. Headlines in the European and overnight press suggest US rates will remain lower for longer and a dovish Fed Governor and board member is speaking later that day. In these circumstances, our imaginary day trader might well sell dollar-yen expecting the rate to fall further.

In the late afternoon, towards the end of the UK business day, the Fed board member speaks and intimates that interest rates in the US will stay lower for longer and the dollar-yen FX rates fall, allowing our day trader to close their short position for a profit.

Slippage is the difference in price between a take profit or stop order being triggered and the execution of the same. It can occur in fast or illiquid markets and comes about because stop and take profit orders are executed at the next available price in the market after they are triggered and FX prices can move significantly, even within a fraction of a second.

The only way to eliminate slippage is to trade with guaranteed stop losses, however, they usually have a cost attached to them and are not as flexible as a standard stop-loss order. To reduce potential exposure to slippage, it’s best to trade in the most liquid portions of the market in terms of both choice of instrument and times of the trading day.

We can also use limit orders to fix the price at which we are prepared to execute. Though of course, we have to weigh up when to use that order type and when it’s best to close a position, regardless of price.

The best times of the day to trade in FX are the points where the main sessions overlap and business moves from one region to another. This happens first thing in the morning GMT, as Asian markets wind down for the day as London opens for business, and then again mid-afternoon London time, as US markets become active and London trading heads towards the close. The handover from the US to Asian FX centres later in the day is probably the least liquid of the three overlaps.

There is no such thing as a free lunch they say, and that rings true in trading. Brokers have costs and they need to meet those costs somehow, whether that is through the spread and/or commissions or trading against their clients via B-book. Where brokerage services are offered free, for example, in trading US equities, the broker is paid by a market maker or high-frequency trader for their client’s order flow. The adage that if something looks too good to be true then it probably is, remains good advice.

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