What are Regulators in Forex Trading and How to Choose a Good One?
In some cases Regulators determine that firms have been concealing retail or customers accounts and have found out that they are breaching the Regular T margin rules in the process. Sorry to say, arbitrary and selective enforcement by regulators in a prejudiced manner has proprietary traders and firms to restructure, modify how they transact business and to close down doing business in their current manner.
Since more and more scams are involve with regulators and brokers, here are 9 good questions that you can ask in choosing a Forex broker. Although looking for a broker can be a quite a complicated search for traders, you have to be certain to make sure to ask prospective brokers for you to have a reputable broker to work with. These questions may be a good basis for choosing a good broker.
- 1. Ask the broker what regulatory authority is your brokerage firm registered with and in what country. The NFA or National Futures Association conducts audit on books and is one of the best present regulators. The Forex market is presently far less regulated than stocks, bonds, and commodities.
- 2. Know how fast they can execute the order. Apparently, it should be a second or less than a second. With the present modern technology, there is no reason for it to take any longer.
- 3. Inquire if the broker is attached to any bank or lending institution. Banks are more greatly regulated, which provide extra peace in mind, in addition to financial security.
- 4. Demand from the broker what country is their corporation being held. The suitable answer is any country with firm and strict banking laws and supervision. The incorrect answer would be anywhere else.
- 5. Ask what type of broker he is. There are different kinds such as Market Makers (MM) and Electronic Communications Networks, and you will want to know the variance between the two and which fits your needs best.
- 6. Have an idea what is the minimum account trading size from your broker. This is vital to remember to make sure your position is not closed out because you are short on funds to cover.
- 7.Inquire what the margin requirement is. 1% is considered standard, but lower than that is better. The more control you have, the better.
- 8.Also ask if your money will be held by a public or private company. You should demand it should be held by a public company, because they are insured. If there is a time a company goes bankrupt, you have a better chance of getting your money back.
- 9.Know how long your broker has been in business and how many clients does he have. Apparently, the longer they have been around, the better the sign. Having a large number of customers for a long time can also help to dispel any fears.