The Forex market is the largest marketplace in the world. Trillions of dollars are traded every single day in the Forex market, and that’s a staggering amount as well. You cannot go wrong with a regulated Forex broker if you are going to make some money trading currencies. There is too much risk in this market, and you need to get the services of a regulated Forex broker right away. We are going to talk about why a regulated Forex broker is important.
Top Priority
You have to choose a regulated Forex broker right away, and this should be truly a top priority for you as well. Forex is a very competitive industry, and the risk of dealing with an unregulated Forex broker is just too high. You will have tons of risk in this business, and adding up another risk is not an intelligent decision. A regulated Forex broker will give you the peace of mind that you have been seeking for a long time. Any regulated currency trading brokers has to respect the standards set up by the industry as well.\
A regulated Forex broker will have to face a lot of restrictions regarding the operation of this kind of business. Financial authorities will also step in if a regulated Forex broker has just some issues from time to time, which has tons of benefits for all the parts involved in this business. A best regulated Forex broker has to use segregated funds, which means that your funds will not be used for other purposes other than trading. This is very important if you want to avoid a Ponzi scheme in the future. A regulated Forex broker will avoid covering other expenses with your money.
Reputation
A regulated Forex broker has the reputation of giving you results. Getting a high level of reputation is extremely hard in the Forex industry, and a regulated Forex broker has just that. You should also do your homework and find out whether a regulated Forex broker is indeed regulated. You can send an email to the financial authority in charge of the regulation of Forex brokers. This will allow you to find out the truth. You can also use the Internet to get that information quickly and easily, though sometimes you will have to work harder to do it.
Since a regulated Forex broker has many positive reviews online, you will find information about a regulated Forex broker quickly and easily. You need to compare a regulated Forex broker with other top regulated Forex brokers out there, and this will allow you to get the most bang for the buck. Working with a regulated Forex broker is like having any insurance out there. You will also have access to any amount of trading funds that you might have on your account, which is very important if a regulated Forex broker just goes broke or files for bankruptcy right away.
Capitalization
A regulated Forex broker is properly capitalized. This will allow the broker to cover trading losses down the road. A regulated Forex broker will be able to have funds in segregated and secured accounts keeping fair practices at all times. A regulated Forex broker will make sure that each one of your trades will be executed at the market prices that prevail on the market. The regulated Forex broker that you pick out should have a very clean regulatory record so you can get all the benefits that come from this protection.
Developed countries tend to regulate Forex trading, though the regulatory standards that these nations use also tend to vary. If a regulated Forex broker is doing business in many countries, the business will have to be registered with many regulators. You need to find out what the regulation number is on a regulated Forex broker`s website, as this information is crucial for you. In America, a regulated Forex broker will be overseen by the CFTC and NFA. If a Forex broker is not properly registered, these institutions will kick in so that consumer can be protected at all times.
A regulated Forex broker will have to get $20 million in capital so that the institution can meet the capital requirement that the government of America has put in place for them. This capital requirement was the result of the most recent financial crisis. This led to a reduction of Forex brokers in America, and Forex traders now have fewer options here. A regulated Forex broker is not allowed to go above a 50:1 leverage for any major currency pair or above a 20:1 leverage for any minor currency pair out there. In Europe, a regulated Forex broker tends to offer a 200:1 leverage as well.
A regulated Forex broker will not be able to accept any kind of credit card payment, which is common in other countries. A regulated broker in another country can also offer a CFD trading, which is a derivative contract for a client. U.S. regulated Forex brokers will have to trade online exchange-traded derivatives. This situation will limit the amount of options that traders have in America these days. You also need to realize that the Forex market cannot be regulated 100% at all times. The reality is that this market operates on a global scale, so there is no global regulation at all.
Security
A regulated Forex broker will allow you to get a high level of security when it comes to withdrawals and deposits. The CySEC regulates a Forex broker in the famous Republic of Cyprus, an and the FCA regulates them in Britain. You should also make sure that your transaction costs will not be too high, as this will not give you tons of room to maneuver down the road. You will have to pay either a commission or a spread in each one of your trades, and that’s not an option at all for you.
As you can see, a regulated Forex broker is very important. You will avoid tons of headaches in the future if you get the services of a regulated Forex broker these days. By getting the services of a regulated Forex broker, you will get the security and peace of mind that you want.