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The forex market is undoubtedly one of the most liquid and fast-paced financial markets in the world. The market presents lots of exciting opportunities for traders and investors. Before now, the forex market was exclusively for institutional traders and financial institutions. Today, the narrative has changed. With as little as €50, you can trade different currencies of the world.
To access the forex market, you need a reputable online broker. This article was curated to help European traders and investors to make informed decisions when it comes to choosing the best european broker among the best forex brokers in the world, that meets their needs and trading preferences.
Table of contents
Is Forex Trading legal in Europe?
Absolutely. Forex trading is legal in Europe. However, it is highly regulated by ESMA in the EEA. Each country in the European sub-region also has a market regulator. For brokers to obtain the European ESMA passport, they need to register with at least one market regulator in the country they operate.
How to trade forex in Europe
Trading forex is simple and straightforward in Europe. The first step is to register a trading account with a regulated forex broker. The broker will require you to provide important information about yourself, including your ID or passport to confirm your identity, and a proof of residence.
According to MiFID II regulation published by ESMA, brokers are also required to group their clients into retail and professional categories. The broker you will work with will ask you certain questions regarding your trading experience and financial market knowledge. Once you scale through all these, you will then be asked to fund your trading account. Use any of the supported payment methods available to deposit funds into your account to start trading.
Top 10 Best Forex Brokers in Europe
Let’s now take a look at the top 10 best forex brokers in Europe so that you can make an informed decision.
European trader? Here’s what to look for in a forex broker
If you are an European trader, there are some things you need to look out for to navigate the FX market successfully. European traders are free to choose any broker of their choice in the world as long as it is regulated by at least one European financial regulatory body.
Other tips to keep in mind as an European trader include:
1. Stick with ESMA compliant brokers
Stick with European brokers to be protected by the ESMA oversight. Brokers cannot offer their financial services within the EU without an ESMA regulation.
For brokers to get an ESMA license, they usually register in Cyprus with CySEC. They can also choose whichever country they prefer. ESMA brokers are safe and offer a great layer 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. It is only available to active trades that trade large FX positions. Experienced traders can also have great value leveraging active trader programs.
3. Choose a broker with a great demo account if you are a beginner
Next is to choose a broker with a great demo account if you are a newbie in forex trading. Using a demo account will help you to practice different trading strategies so that you know which one to adopt and which one works for you. Another advantage of using a demo account is that both earnings and losses are totally virtual.
So, before you open a trading account with a broker, ensure the broker operates a demo account. A demo account works exactly the same way like a live account. Once you have learned the nitty-gritty of the FX market, you can then request to upgrade to a live account where you will trade with real money.
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.
Is forex trading taxable in Europe?
Generally, forex trading is taxable in Europe. However, you need to check the tax situation in your country of residence. This is because each country in the European sub-region is independent in the matter regarding taxes. At best, you should contact your local tax advisors for more information.
There you have it! You can see that the forex market is exciting and promising when you choose the right forex broker. To settle for a broker, you need to check a few things so that you won’t lose your trading capital. Some of the things to check are the brokers’ regulation status, the ease of deposit and withdrawal, the brokers’ trading platform, and financial instruments.
Once you check the boxes in these areas, you are good to go with any broker you finally choose. You can go through our guide on the 10 best European forex brokers to get a heads-up on the broker to choose.
Don’t forget to practice forex trading with a demo account before switching to a live account. It is risky to jump straight into the forex market as a beginner without first building up your trading skills using a demo account.
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