What is the best forex trading platform in the UK?

There are many forex trading platforms in the UK, with different special features – and the one you choose will depend on your trading needs. For many people, brokers like Plus500 and Pepperstone are great brokers with an excellent offering to UK traders.

Can I trade forex online in the UK without a broker?

To access the market in the UK, you need to use a broker. This provides you with a specific interface to use the market, and a regulated broker protects your finances.

What is the minimum deposit for forex brokers in the UK?

The minimum deposit for forex brokers in the UK depends on the broker, with different companies charging different amounts. Some brokers allow an account to be opened with no minimum deposit, while for others, it can be more than £100.

What forex trading platforms offer the option to open a demo account?

Almost every forex trading platform offers a demo account; it is a great way for traders to get to know the platform and how the broker works. The best forex trading platform UK for beginners will usually have a demo account, as this is the best way to learn how to trade without risking your financial health.

Is forex trading tax-free in the UK?

Casual traders (those who are not in the business of trading forex like a stockbroker, for example) will find that their profits are subject to capital gains tax. Forex trading is also subject to stamp duty in the UK, which can be as much as £5 per lot.

What are the withdrawal limits for forex brokers in the UK?

The withdrawal limits for forex brokers in the UK will be set by the individual broker, but it is worth noting that according to Anti-Money Laundering (AML) legislation, you can only withdraw to a bank account or card that is registered in your name.

Do I need a bank account to use a forex trading platform in the UK?

You don’t need to fund a forex trading account with a bank account if you use a forex broker in the UK, but having a bank account will help make opening a trading account easier as it can help prove your identity and address.

What is the most popular forex trading platform in the UK?

The most popular forex trading platform in the UK is probably MetaTrader 4, as it is the most popular trading platform globally. However, many brokers will have their own proprietary platform that traders can access the forex market on, often with different charting and research options.

Are forex trading platforms in the UK safe?

If you are looking for a safe forex trading platform in the UK, you will want to ensure that they are regulated by the FCA. The Financial Conduct Authority oversees regulating financial businesses in the UK, making sure that investors are protected and their funds are secure. Forex trading is risky, however – even a regulated broker will not be able to protect you from bad trading decisions or a tumbling market.

What forex trading platform is the best for a beginner in the UK?

For a beginner in the UK, the most important things to look for are the provisions for education. Some brokers offer a full trading course, like the eToro Trading Academy, while others provide articles, videos, and webinars, as well as a demo account.

How much do forex traders make on average in the UK?

Professional forex traders make an average of £69,582 in the UK, according to Glassdoor, but this is for professional forex traders rather than casual traders. Your capital will be at risk.

How can I start trading forex in the UK?

To start trading Forex in the UK, you need to choose a broker to open an account with to get access to the markets. Once you have an account and it has been funded, you can buy currency pairs.

The Pros and Cons of Using Forex Robots

Forex

1 Aug

Written By Georgia King

Forex robots are computer programmes that carry out a range of automated trading functions, from telling traders when to trade, to placing and managing trades on behalf of their user.

Forex robots can be programmed to trade around the clock and operate on a set of predetermined trading signals, or triggers for action, which are based on analysis of data.

Forex robots may also be known as FX robots or Automated Trading Systems (ATS).

Forex robots can be readily bought online – and it is not hard to see why traders would be attracted to the idea of installing a programme that will automate trades on their behalf, or send trading signals triggered by constant analysis of the market.

However, before purchasing and running a forex robot, it is important to weigh up the advantages and disadvantages of using an automated system, and to recognise that no forex robot can offer the perfect trading solution. In this article, we explore both the pros and cons of using a forex robot.

Advantages of Using Forex Robots

They Can Trade 24/7

Human traders are usually confined to trading within certain periods of their waking day and will usually have other commitments such as family, work and leisure pursuits. Even the most dedicated forex traders will need to take breaks to eat, drink, sleep and get away from their computer screen.

A forex robot can work continuously with no need for breaks, which means they will be watching and acting on the market at all times, so you never miss an opportunity.

They Are Not Influenced by Human Emotions

Forex robots operate on a set of pre-determined rules and they will stick to this no matter what.

When humans are trading money it can be hard for them to overcome emotions, such as fear and greed, and their own biases and assumptions. This can lead them to hesitate, prevent them from taking trades, push them into making the wrong trades or hold their position for too long.

Even when traders have a firm strategy in place it can be hard for them to think critically and objectively in the heat of the moment. An automated system removes the risk that human emotions can bring to trading.

They Can Work Faster and More Effectively

A forex robot can scan the markets, find opportunities based on pre-determined parameters and carry out trades according to its rules, all in a matter of seconds. A human trader doing this manually is likely to take much longer and may miss opportunities, or waste time making decisions or entering an order.

They Can Operate More Complex and Sophisticated Trading Strategies

Robots are much better at multi-tasking than humans, so using an automated system allows traders to have multiple conditions for things like entries and exits, stop-loss orders and profit targets, all operating simultaneously. Forex robots can also monitor multiple currency pairs at the same time.

They Make Backtesting Easier and Faster

Backtesting is the process of testing out possible trading strategies against historical data and using this data to optimise a chosen strategy. Done manually, it is complex and time-consuming.

However, forex robots can download, store and analyse large amounts of historical data, allowing traders to measure the effectiveness of different strategies before applying them to the live market.

Anyone Can Use Them to Get Started With Forex Trading

The easy availability of forex robots means you do not have to be an expert to get one up and running on your computer and start trading forex.

You should always thoroughly research any automated trading system that you are considering buying and try it out on a demo account before moving onto the live market. But using a forex robot can help you to dip your toe in the water, while freeing up your time to study forex and trading in more depth.

Disadvantages of Using Forex Robots

You Need a Strong and Constant Internet Connection

Forex robots must be run on a good computer with a reliable connection to the internet. Any delays or faults in the server could cause glitches or prompt the robot to trade incorrectly.

And like any other computer software, they could also be affected by hackers and viruses.

They Have No Capacity for Human Thought or Imagination

Successful forex traders bring a breadth of skills and knowledge to the table, applying research, analytical thinking, observation, and a certain amount of imagination and creativity to predict how markets may evolve in the near future.

Forex robots can only operate based on how they were originally programmed and their past performance, which can put them at a disadvantage to human traders.

They Are Not Good at Reading and Interpreting Fundamental Data

Forex robots are good at technical analysis, which involves reading historical market statistics and price charts to predict what might happen in the future. But they are not so helpful when it comes to fundamental analysis.

Fundamental analysis is a method of evaluating the value of an asset by looking at external circumstances and influences, such as economic or political events and industry trends.

While a human can keep abreast of what is going on in the outside world and how this might affect the markets, a quick reverse in the market caused by a sudden extreme event could severely affect a robot’s capacity to trade effectively.

They Are Vulnerable to Non-Trending Markets

Forex robots are designed to find positive trends and trading signals in the market and to act on those. This is fine if the market is trending – if the price is generally moving in one direction.

But if the market becomes choppy or sideways – when the price movement is horizontal – a robot’s functionality can be affected.

Most Forex Robots Are Scalpers

Forex scalping is a trading method that involves holding currency pairs for a short period to make numerous small profits. Generally, small price movements occur throughout the day and scalpers take advantage of this by opening and closing a large number of positions within one day.

The aim is to make small gains of perhaps 5 to 20 pips per trade (a pip is the unit of change in a currency pair).

The majority of forex robots operate on a similar system, setting a target of just a few pips on every position they take.

As well as deciding if this method of trading will be profitable for you in the long term, you will also have to check your broker’s policy on scalping as not all will allow it. And you will need to confirm that your broker's spreads (the difference between the bid price and the ask price) are low enough for your chosen robot to work effectively.

There Is a Risk of Data-Mining Bias

Data-mining bias is where an analyst repeatedly searches sample data until a pattern is found, resulting in undue significance being given to a market event that was perhaps caused by chance or an unforeseen set of circumstances.

In the same way, commercial forex robots tend to pick one backtest (the process of testing a trading strategy against historical data) out of hundreds and present it to the trader as the most likely outcome even though the findings may not have been tested thoroughly enough.

They May Be a Scam

It is important to be aware that forex robot scams are not uncommon, so you should be very careful about who you buy any software from. Even those that are sold in good faith may be badly designed and not live up to your expectations.

Make sure you do plenty of research before making any purchase and remember, if the promises of overnight riches sound too good to be true, they probably are.

Final Thoughts

As this article makes clear, while there are many benefits to using a forex robot, there are also significant disadvantages. It is no surprise that opinion is divided over the effectiveness of these kinds of automated trading software systems.

Ultimately, it is up to each trader to weigh up the pros and cons before deciding whether a forex robot is right for them. And even if you do decide that a forex robot will work for you, you should be aware that it is almost definitely not the route to quick and easy wealth.

It is tempting to believe that you can simply sit back while an automated system does all the work for you. However, if this was the case forex robot developers would be getting rich by using them themselves, rather than selling them.

A well-chosen forex robot may have a place as part of your trading strategy but you should not depend on it entirely. Successful trading requires human skill and effort that no robot can replace.

Georgia King