Do UK-Based Forex Traders Have It Easy?

Anyone from across the world can open a forex account and start trading forex, but as a trader based in the UK myself, I can speak from experience in saying that us Brits have it easy when it comes to forex trading. Why is this? Well there are two main reasons, as I'm about to explain.

The first reason is because traders based in the UK can trade both the opening London session and the opening New York session during the day. These are both profitable times to trade the forex markets and they both occur during convenient times. For US-based traders, for example, if they want to trade the London session as well as the US session, then they need to get up extremely early, in the middle of the night in fact, to trade the London session.

This is a shame because the London session is in my opinion the best time of the day to trade the markets. If you're trading the shorter time frames then the hours between 8.00 and 12.00 (UK time) can be extremely profitable. You don't have to contend with any big economic data releases coming out of the US and you only need to pay attention to the occasional UK or European news releases. This means that you can concentrate fully on technical analysis without any distractions.

The other main reason why UK traders have an advantage over traders from most other countries is because they have the option to trade completely tax-free. In other words any profits they make are completely free of tax, even if forex trading is their full-time occupation. This is because under current tax laws UK traders can trade forex (as well as many other financial instruments) through a spreadbetting account.

This works in much the same way as a normal forex broker except that it's considered to be betting, which is why it is not currently regarded as taxable income. You simply enter a stake per point and then take a long or short position on a particular currency pair. The more the currency pair moves in your favour, the more money you make (and vice versa if it moves against you).

So to sum up, if you're living in the UK you have a major advantage because if you are profitable then you can keep 100% of any gains you make if you trade through a spreadbetting company. Plus of course you also have the convenience of being able to trade the most profitable hours of the day. So to answer the original question posed, yes I do indeed think those of us who are living in the UK and making money from forex trading are indeed very fortunate for these very reasons.