The Reason the Best Forex Brokers Are Regulated

The forex market will provide you with the most liquid capital markets to trade with access to the currency markets, 24-hours a day, 6-days a week.  With the volume of 5-trillion dollars per day, you will be easily able to enter and exit trades nearly every hour of the day. Despite this availability, it is extremely important that you find a regulated broker to handle your transaction to ensure the integrity of your transactions, as well as, safeguard your funds.

Regulation Protects Investors

One of the most important aspects of trading the currency markets is deciding on a reputable forex broker.  The internet will provide you with a plethora of great reviews with sites that will have a comprehensive list of the best forex brokers. There are many reasons why you want to be cautious when utilizing a forex broker. The most obvious is ensuring your transaction are monitored by a regulated body.  If you wind up giving your hard earned capital to a broker that is unregulated, you will have no recourse if the broker disappears with your capital.

The most recognized regulatory authorities are the Commodity Futures Trading Commission and The National Futures Association, both are U.S. regulatory bodies, as well as, the Cyprus Securities and Exchange Commission and the Financial Conduct Authority in the United Kingdom.

When choosing a broker, you should be cognizant of where the brokers is domiciled. The domicile of a forex broker is critical because in well-developed countries the legal systems can help you if it is necessary to recover your funds if problems should arise.

The idea that one forex broker is just like every other broker is not the case.  There are some very good brokers and there are also a number of brokers that are shady.  It is your responsibility to do your homework and find a broker that not only fits your trading style but also has your best interest at hand when processing your trades.

Security plays a tremendous role in the world of trading.  You should feel comfortable when placing trades through a secured network and expect that your trades are encrypted.  Your security and the steps your broker takes to ensure that their system is secure is part of the regulatory process.

Financial Products

A regulatory body will not only monitor the transactions, legal, and security of your broker, they will also oversee the type of financial instruments they offer.  For example, while some brokers are available in some countries, other regulatory bodies only allow specific types of these instruments to be traded by brokers. Some forex brokers are limited when it comes to the financial products offered. Prior to picking a broker, you should evaluate the types of financial products that are offered to determine if they are in line with your trading strategy.

While finding an easy to use the platform is generally on most traders’ minds when they looking for a broker who can facilitate trading the currency markets, it’s the stamp of approval from a regulator which will lead you to the best forex brokers.  Brokers who are transparent and have nothing to hide are usually the companies that have the best business practices and will offer you the most secure way to trade the foreign exchange markets.