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If you are interested in the European Forex, the market can be quite welcoming. The European Union is a highly productive and beneficial region for all kinds of Forex activities. Economic integration provides a higher and safer ground for trading. Forex activities in such competitive areas can be rather complicated and risky. Your budget, investment options, potential scammers, and other risks are an inescapable part of the journey. In the guide from Traders Union you will learn how to choose the best Forex broker in Europe.
Tips for trading with European brokers
With the use of modern technology, traders from around the globe can easily open accounts with European brokers for Forex trading. However, it is important to know that many brokerage companies that are registered in Europe provide the level of quality for their clients and may lack transparency funds safety. To decide which brokers on the European market offer good conditions and profitable trading the following is important to take into consideration. At first, check the broker’s compliance with the following criteria:
- The duration of operation in the market should be more than 2 years. For example, AvaTrade has operated in Europe for 17 years already (since 2006), XM Group commenced in 2009 and FXTM was established in 2011. Admiral Markets, which is registered in the UK, first registered its operation in London in 2001.
- Ensure the broker is licensed in Europe. For example, AvaTrade holds several licenses by various regulators, but you will need to check if it is licensed by a European regulator which is currently regulated by the BVI FSC (Financial Services Commission of the British Virgin Islands). FXTM and XM Group are both licensed by CySEC (Cyprus Securities and Exchange Commission), Admiral Markets UK by The UK Financial Regulatory Authority (FCA). FxPro is licensed by two European institutions – CySEC and FCA.
- Ensure the broker has positive feedback from European users. Admiral Markets UK currently has the most positive feedback. What is more, traders from 40 countries worldwide use its services.
- Check the broker’s spread. A lot of European brokers have floating spreads. That is why you need to check the brokerage commission. AvaTrade starts at 0.8 pips, XM Group starts at 0.6 pips, and FXTM and FxPro start at 0.1 pips. Admiral Markets in the United Kingdom start at 0.0 pips. These spreads are the minimum possible values. Spreads can change with market fluctuations.
- Check the minimum deposit amount. The Admiral Markets UK broker allows you to trade with a real account deposit from $1, XM Group from $5, FXTM from $10, AvaTrade and FxPro from $100.
Is Forex Regulated in the EU?
Europe is one of the continents with the most powerful financial markets, with cities like London, Paris, Frankfurt, and Zurich which have some of the world’s largest Forex markets. With so much at stake, it is no surprise that Forex trading in Europe is strictly regulated.
European Forex laws are a blend of EU-wide laws and laws that apply only to certain nations. The Markets in Financial Instruments Directive (MiFID), which started working in November 2007, is one of the most significant laws that apply to the entire EU.
Among the national competent authorities in charge of enforcing MiFID are the Financial Conduct Authority (FCA) in the United Kingdom, the Cyprus Securities and Exchange Commission (CYSEC) in Cyprus. In Germany there is also a financial regulatory institution Federal Financial Supervisory Authority (BaFin).
Summary
Forex trading in the European Union is heavily regulated by such authorities as FCA, BaFin, and others. To trade safely you should ensure that the broker has good feedback from the EU clients. In addition, you should check the broker’s spread size. It may be different for different assets. On the Traders Union website you will find more tips for trading, list of the best Forex brokers in Europe, and more.
