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What UAE traders need to know before they start trading Forex – News

By on October 13, 2021 0

Forex trading is a popular trading activity all over the world, thanks to which a lot of information is available for free on this vertical. The problem is that not much of this information is intended for traders in the UAE and this is important because which broker you choose may matter.

As a trader in one of the emirates of the United Arab Emirates such as Dubai, Abu Dhabi or Sharjah, there are a few considerations to know before choosing a broker that does not apply to traders in other countries.

We go through some of these considerations to make sure you choose the right broker before you start trading.

Choose a broker with UAE regulations

First of all, before you start trading, you need to choose a broker who has been regulated by the financial authorities of the United Arab Emirates. Using a regulated broker in the UAE ensures that the broker is legally licensed to offer its services to residents of the UAE and meets the financial standards expected in the region.

As a customer, regulators provide protection in several ways. Safeguards include monitoring the broker’s financial records; this guarantees transparent and therefore honest business operations. Regulators also require the broker to keep client funds segregated and to document redress processes in the event of a dispute.

In the United Arab Emirates, you can choose from four regulators, namely:

  • Dubai Financial Services Authority (DFSA)
  • Abu Dhabi Global Market (ADGM)
  • The Securities Commission Authority (SCA).
  • Some forex brokers in UAE are regulated by the Central Bank of the United Arab Emirates (CBUAE). For now, these brokers are an option, but they will need to switch to SCA regulation by July 2022.

To trade securely in the UAE, choose a broker regulated by the DFSA, ADGM, SCA or CBUAE.

Sharia Compliant Accounts

The CBUA or SCA regulates mainland companies, which must be majority owned by a UAE national. The DFSA and ADGM regulate brokers in UAE financial free zones, which allow the location of businesses owned by foreign nationals. While all regulators in the UAE have the same basic regulatory requirements, regulators in the free financial zone maintain a level of autonomy, so there are differences to be aware of.

The main difference is that mainland regulators require brokers to be 100% sharia compliant. The ADGM and DFSA do not require the broker they regulate to be Shariah compliant.

This means that brokers with CBUA or SCA regulations cannot offer swap fees. Swap fees, sometimes referred to as rollover fees or overnight fees, are interest rates and bonuses that are not permitted by Sharia law. Brokers regulated by DFSA and ADGM can have a swap-free account, however, this does not necessarily make the trading account Sharia-compliant as the interest rate may be charged in some other form, for example via administration fees.

So, if you want to be sure that your trading account is Sharia Compliant, choose a broker regulated by the CBUAE or the SCA.


Trading on margin or leverage is a useful tool to help you increase your profits. While forex prices frequently change at a rapid rate, they tend to change only in small amounts unless there is a major economic or political event. For this reason, leverage is useful especially for retail traders who do not have access to the large volumes of money that fund managers have.

What you need to know when using leverage is that while it can lead to big profits when moves go in your favor, it can also lead to crippling losses if price moves. are going the wrong way. For this reason, many regulators around the world are limiting the leverage that brokers can offer.

Much like European and Australian regulators, the DFSA and ADGM limit leverage to 30: 1 for major currency pairs and 20: 1 for minor and exotic currencies. They also allow higher leverage for professional traders who meet certain requirements. However, the CBUAE and the SCA do not impose a limit on leverage. So, some brokers with one of these regulators may offer leverage of 500: 1 or more.

In summary, if you want the best possible leverage when trading forex, choose a broker regulated by the CBUAE or SCA. For most traders, a leverage of 30: 1 is sufficient.


When choosing a broker, it helps to know the spreads you are trading with. Justin Grossbard and Noam Korbl founded the “Compare Forex Brokers” website because they were frustrated trying to figure out which broker offered the best value for money. For this reason, they have created a spreads module that compares the average spreads of forex brokers.

The website has a section for UAE traders to see how the spreads stack up for brokers in the UAE region. Keep in mind that lower spreads usually mean lower costs, but you should also keep commission fees in mind. To this end, 3 modules are available, one which compares commission-free accounts, a second on commission or ECN type trading accounts and a third module on the comparison of fixed spread accounts.


There is a wealth of information on the web for currency trading, however, many of it is not specific to UAE traders. If you are trading in the UAE, you should make sure to look for UAE regulated brokers. This ensures that the broker is licensed to offer their services to you and that you get the right information about the broker and the trading conditions you will encounter as a trader in UAE.