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Regulated VS Unregulated Broker – What to Choose

11 September 2018 No Comment

Ever wondered why Forex regulation was implemented? In the few lines that follow you will get to see exactly why, how regulation works and exactly what is the crucial difference between regulated and unregulated brokers. This is your guide to finding the best Forex broker as well as international Forex brokers that actually work for you.

Regulation in Forex market

First off, let’s see what Forex market regulation entails. As one of the key aspects to be taken into consideration by any Forex trader, beginner or not, it’s more about protection against what could go wrong than anything else. Before depositing money into your live account, you need to disregard potential benefits and carefully weigh possible mishaps.

Even if unregulated brokers might seem more appealing than regulated ones, you need to maintain a realistic point of view and avoid tricks meant to lure you in, rather than offer the ideal trading experience.

If you find yourself at odds about which broker to choose, you might want to check this out: regulatedbrokers.com. This site offers a vast array of fully compliant brokers that offer nothing but the best start for newbies and boost consecrated traders’ careers.

What authorities regulates the Forex market?

The Forex market is one of the largest in the world, if not the largest. Its size exceeds that of the stock market or any other centralized market, so it’s also harder to manage. This size of it encourages fraud, simply because it becomes harder to control on a larger scale. This wave of crime, however, has receded over the last years, because of tighter regulation. The entire market is regulated by the same entities that cover banks and every other financial institution. However, they only have power over their own jurisdiction, so this is why so many scams are possible when it comes to major Forex players.

The UK, for instance, is regulated by The Financial Conduct Authority (FCA). When choosing a broker, always ask for their FCA reference number, look it up on their website and check if their regulations’ claim is legit or not. Financial regulation varies from one country to another, so before you get started make sure you are fully aware of all the risks trading entails.

Sticking to regulated brokers means having peace of mind: that you can withdraw your money at any time, with no delays of stops along the way. Unregulated brokers tend to “pack up and leave” whenever they please, with 0 explanations and 0 refunds, so we’d say the benefits of choosing a regulated broker far outweigh the fake bonuses unregulated brokers might offer.

With around $5.3 billion traded daily, it’s no wonder this kind of market is not extensively regulated. The up-side is the following: banks are massively responsible for the vast majority of Forex trading, and these are almost always regulated. Any sign of market manipulation is carefully analyzed by the US Federal Reserve and the US Treasury Department, so the United States enjoy the highest degree of regulation when it comes to Forex trading.

A relevant example of an unregulated broker is RCPro, which has dominance over currency trading. Options and future trades, in contrast, are regulated, because they are considered derivatives and fall under the jurisdiction of the Commodities Futures Trading Commission (‘CFTC’) in the U.S. and in adjacent futures exchanges.

The best Forex brokers stick to regulations, so make sure to look through Forex trading review on the site we just mentioned, and rest assures you will find legit Forex trading companies that take your trading experience to the next level. Reputable Forex brokers have a reputation to maintain, so their Forex trading services have to rise up to expectations.

Summing things up

Forex trading is no easy endeavor: only choose regulated brokers that will boost your trading capabilities, not make you question every mechanism in the system. Top Forex sites only go with compliant brokers, so stay away from the Forex “black market” sites and go for the ones that already built up a solid reputation.

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