Many people here in the UK are turning to currency trading as a potential method of raising extra money at a time when the wider economy is in a huge downfall. It can be done at work on the office computer or it can be done on a full-time or part-time basis from the comfort of your own home. So how can UK-based traders actually start trading currencies?
Well we are very lucky here in the UK because we have very nice tax laws which enable us to trade tax-free because any gains we make are deemed as being profits made from gambling, which are of course exempt from tax. So if you do make any profits you do not have to worry about declaring this income.
There is an exemption to this rule and that's if you trade through a conventional forex broker. There are lots of these brokers online and there are some very good ones which offer competitive spreads and excellent charting facilities. However it is rather pointless trading through a normal forex broker if you live in the UK, when you can just as easily trade tax-free.
This is why the other two options I wish to discuss make more financial sense. The first of these isn't one I would recommend using, although it is an option, and that's using one of the growing number of online bookmakers that provide betting on financial markets. These provide short-term markets throughout the day such as 5 minute, 15 minute and hourly markets as well as markets based on the closing price at certain times of the day such as 12.00 and 16.30.
You can place bets as you would normally using either decimal odds or fraction odds based on whether the price of a particular currency pair will finish above or below a certain level. Some websites will also offer slightly more advanced markets which involve the use of binary bets. However overall I don't really recommend you bet on the markets through a bookmaker because if you are successful you will inevitably find that either your account is closed or your allowable stakes are reduced to such a small amount that's it's not worth your while placing any bets at all.
The final option is the best one, in my opinion, and that's the now well-established spread betting firms. These also provide tax-free betting but are much more professional as they offer sophisticated trading instruments on a wide variety of markets and generally include top quality charting software and trading tools and resources you can use.
Furthermore if you are successful you will generally find that the spread betting company will not mind at all because they can simply copy your trades and place them elsewhere to cover their liabilities and possibly make a profit as well.
So although you are perfectly entitled to use an ordinary bookmaker or a conventional forex broker to trade the markets, the best option is to use a spread betting company in my opinion. Most of them offer spreads that are just as tight as a lot of the top forex brokers and you can trade completely free of tax if you reside in the UK.
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Date Published :
Feb 17 2009