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Europe is one of the most active forex trading hubs in the world. It is home to hundreds of forex brokers, and each of them has unique characteristics.
In this article we have chosen the best ones for European traders. We took into consideration various factors, including:
- The regulation of the broker;
- Their physical presence of offices within Europe;
- The overall quality of the service;
- Forex trading commissions;
- Available base currencies.
Table of Content
- XM: best for no requotes
- eToro: best for social trading
- AvaTrade: best for forex news traders
- XTB: best for educational resources
- IG Markets: wide range of trading platforms
- Admiral Markets: wide range account type
- Plus500: one of the best for CFD trading
- ActivTrades: best for insurance coverage
- Pepperstone: best for forex scalpers
- Interactive Brokers: best for professional traders
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investor accounts lose money when trading CFDs.
You should consider whether you can afford to take the high risk of losing your money
Top 10 forex brokers in Europe: 2022 review
Here are ten of the best forex brokers in Europe for you to choose from.
- XM is regulated in Europe by the CySEC (120/110).
- Open a trading account in EUR, GBP, CHF, HUF, or PLN.
- Offices in Cyprus (Limassol), Greece (Athens), UK (London).
- The European branch of XM offers three different account types: Micro, Standard, Zero.
- Access to 15 European markets for stocks on MT5.
- In the EU, the minimum deposit required is €5.
- Average spread on EUR/US: 0.1 pips.
73.57% of retail CFD accounts lose money
- Social/copy trading broker regulated in Europe by CySEC (109/10).
- eToro opens trading accounts in USD only. This means that European traders may be charged currency conversion fees when depositing money.
- The minimum deposit in Europe is $50.
- Offices in Cyprus (Limassol), UK (London).
- Leverage in the EU is up to 1:30 for forex pairs.
- Forex spreads are competitive but slightly higher than other european brokers.
- Average spread on EUR/USD: 1.0 pips.
(68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money)
- Fixed spread forex broker (from 0.9 pips for retail traders).
- AvaTrade is an Irish broker, regulated in Europe by the Central Bank of Ireland (CBI) with license number C53877.
- You can open trading accounts in EUR and GBP.
- AvaTrade has opened offices in Ireland (Dublin), Italy (Milan), Poland (Warsaw).
- Average spread on EUR/USD: 0.9 pips.
(79% of retail CFD accounts lose money)
- Polish broker regulated in Europe by the KNF.
- The broker has no minimum deposit in place for European traders.
- Spreads on forex start from 0.3 pips.
- Wide range of account currencies available: EUR, GBP, USD, CZK, PLN, HUF, RON.
- Huge physical presence in Europe with offices in Poland, Cyprus, Czech Republic, Slovakia, Portugal, Germany, France, Spain, and Romania.
- Average spread on EUR/USD: 0.1 pips.
79% of retail CFD accounts lose money
5. IG Markets
- Regulated in Europe by BaFin with license number 148759.
- Wide physical presence with offices across Europe: France, Germany, Italy, Spain, Poland, Sweden, Switzerland.
- With IG Markets it’s possible to trade barrier options and vanilla options, as well as over 17.000 instruments as CFDs.
- The Minimum deposit in Europe is €300.
- IG markets opens trading accounts in EUR, GBP, and USD.
- Average spread on EUR/USD: 0.6 pips.
Visit IG Markets
(76% of retail investor accounts lose money)
- Estonian broker regulated in Europe by CySEC with license n° 201/13.
- With Admiral, European professional traders have access to a cashback program and higher leverage up to 1:500.
- Within the EU it’s possible to open accounts in different European currencies: EUR, GBP, CHF, BGN, CZK, HRK, HUF, PLN, RON, and SEK.
- Average spread on EUR/USD: 0.1 pips.
76% of retail CFD accounts lose money
- Professional EU traders have access to better spreads and leverage up to 1:300.
- Regulated in Europe by the CySEC, license n° 250/14.
- Offices in the UK (London) and Cyprus (Limassol).
- Plus500 offers trading accounts in a good range of currencies, including the EUR.
- Spreads on EUR/USD are variable.
(77% of retail CFD accounts lose money)
- Regulated in Europe by the CSSF in Luxemburg, license n° B232167.
- Offices in Luxemburg, Italy, and Bulgaria.
- Client funds in the EU are individually covered up to €1,000,000.
- ActivTrades provides a good range of account currencies: EUR, CHF, GBP, and USD.
- The broker requires a minimum deposit of $1000 in the EU. Deposits are liable to a 1,5% fee.
- Average spread on EUR/USD: 0.5 pips.
75.7% of retail CFD accounts lose money
- Pepperstone is a broker regulated in Europe by CySEC (388/20) and BaFIN.
- It provides very fast order execution.
- Pepperstone professional traders can access the Active Trader program to earn rebates depending on the volume traded.
- No minimum deposit required in the EU.
- You can open trading accounts in EUR.
- Average spread on EUR/USD: 0.09 pips.
(75.9% of retail CFD accounts lose money)
- Regulated in the EU by three regulatory bodies: CSSF, CBI, and the Central Bank of Hungary.
- There is no minimum deposit for European traders, however, the broker may charge small fees when the equity is below $2000.
- Wide range of over 100 tradable forex pairs.
- IB is the broker of choice of many European professional traders, including the 4 times world champion Andrea Unger.
- Average spread on EUR/USD: 0.2 pips.
Visit Interactive Brokers
74-89% of retail CFD accounts lose money
How to open a forex trading account in Europe
In Europe, opening a trading account is slightly more complex than in other countries.
European brokers have to respect strict rules on profiling their clients in order to protect the less experienced, and at the same time fight money laundering.
Clients who want to trade with real money must complete the brokers’ profiling procedure, known as KYC (Know Your Customer). This consists of 5 steps:
- Answer questions about CFDs to let the broker know your level of expertise.
- Answer questions about your financial situation to verify the source of the money.
- Provide a proof of identity through an official document (such as a passport or ID card).
- Provide a proof of address with an official document (such as a bank statement or utility bill).
- Deposit money with an entity linked to the identity of the trader.
European trader? Here’s what to look for in a forex broker
If you are a European trader, there are some things you need to look out for to navigate the FX market. European traders are free to choose any broker in the world as long as it is regulated by at least one European financial regulatory body.
Other tips to keep in mind as a European trader include:
1. Stick with ESMA compliant brokers
Brokers cannot offer financial services within the EU without an ESMA regulation.
For brokers to get an ESMA license, they usually register in Cyprus with the CySEC. They can also choose whichever country they prefer. ESMA brokers are safe and offer a great level of protection.
2. Active Trader Programs may help
Another important tip is to leverage active trader programs. The benefit of using active trader programs is that they offer lower spreads and costs. These are only available to active traders that trade large FX positions.
Experienced traders can also get great benefits from active trader programs. One of the best rebates programs for European forex traders is offered by Pepperstone (75.9% of retail CFD accounts lose money).
3. Choose a broker with an unlimited demo account if you are a beginner
Next is to choose a broker with an unlimited demo account if you are new in forex trading.
Demo accounts are free accounts that brokers offer to let you test their service with virtual money.
They can be opened quickly without having to provide ID cards, bank statements, or other formalities.
4. Watch out for forex trading scams
European traders are often the target of online scams. These are carried out in many ways, but the main way scammers attract victims is by using telemarketing.
One should always be wary of call centers that offer to invest money in forex or other markets.
What is ESMA and what does it mean for forex traders?
ESMA (or European Securities and Markets Authority) is the body that oversees the European financial markets.
Brokers operating in Europe must comply with ESMA directives, which directly affect European traders as well. Among them, the most important are the following:
- Brokers are required to show how many traders lose money using their service.
- Brokers cannot offer bonuses of any kind.
- Brokers cannot offer high-risk products such as binary options.
- Brokers must implement systems that prevent the user from losing more money than they deposit (Negative Balance Protection).
- Brokers must keep users’ money in segregated accounts.
- Brokers may offer leverage of up to 1:30.
It should also be noted that these rules apply only to clients who are classified as “retail”, i.e. “non-professional”. If the trader meets the necessary requirements, they can apply to the broker for professional status who will be able to grant higher leverage, rebates based on the volume traded, and potentially even high-risk assets.
How to verify if a forex broker is regulated in Europe
Determining the regulation status of a broker in Europe is simple. All you need to do is to go to the ESMA (EU) firms register, select the country the broker operates in and hit the verification button. The result will display whether or not the broker is registered in the selected country. If you still have doubts, check our dedicated article on how to check the regulation of a broker.
Is forex trading taxable in Europe?
The EU does not have a single tax law, so each European state has its own policy.
Despite this, forex is usually taxable according to the local Capital Gain Tax rates.
If you are interested to know the tax trading laws in a particular European country, on InvestinGoal we have covered the top 10 best forex brokers for various European countries:
However, we strongly recommend contacting a professional tax advisor to file your taxes, seek help and receive tips.
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