Generic trade broker reviews
Who is regulated in the US forex industry? Why does any of this matter for my forex trading? Why simply choosing a regulated broker does not offer you enough protection. The CFTC has the ultimate regulatory authority generic trade broker reviews the futures markets, which includes the forex markets. All non-bank forex brokers dealing with retail clients are covered by the CFTC regulations. The NFA is a self-regulated organization for the futures and forex industry and serves as a watchdog for the industry.
The NFA has the power to issue fines and to suspend operations of their members. They also provide dispute resolutions services to arbitrate disputes between investors and NFA members. The OCC is an independent bureau of the U. Department of the Treasury. The OCC is responsible for regulating futures generic trade broker reviews forex trading for national banks and foreign banks.
All banks dealing in forex transactions with retail clients are subject to these OCC regulations. The two sets of regulations are almost the same.
For brokers who deal primarily with forex trading, the RFED is usually the counterparty to your forex trade. In forex trading, if you win and make money, the counterparty loses that money.
If the counterparty makes money, it is because you lost money. RFED's want you to lose your money so that they can make money. For retail forex trading, your forex broker is often an RFED. Technically, a counterparty is not a broker, but a dealer. However, "forex broker" is a widely used term used by retail traders that also refers to dealers, so this site will keep with that convention. Just be aware that you are generally trading against your "broker", which is a conflict of interest.
Note that brokers who use straight through processing to offset your trade with other counterparties are not in as direct a conflict. A CPO pulls together money from many investors and trade the combined funds together as a pool.
A large forex hedge fund would be an example of a CPO. As well, smaller managed forex accounts can also be CPOs. A CTA provides certain forex trading advice to customers. The following are not CTAs:.
An IB solicits generic trade broker reviews from customers to trade forex, but does not handle any of the money or get involved in executing the transactions.
An IB typically drives forex customers to a retail foreign exchange dealer your broker. The IB is usually paid a share of generic trade broker reviews money which that dealer makes from the customer. It matters because the forex brokers and other industry players with the most regulatory oversight generic trade broker reviews less likely to scam you.
Those that are less regulated or not regulated are much more likely to scam you. Here are some related points:. Members who solicit customers must provide risk disclosures prescribed by the CFTC that cover the following:. Additional disclosures are advised if forex trading is not advisable for a potential customer based on financial goals, financial resources or forex trading inexperience. For communications and promotional materials for the public, written procedures must be created and enforced that align with the following:.
Adjusting or canceling the price of an order after it is executed is generally not permitted, with two exceptions: Price slippage happens when the price of an instrument changes between the time an order is placed by a customer, and is received by the FDM.
This is permissible if either:. In some cases it may be more than this. Simply put, many forex brokers have violated US forex regulations. In many cases, forex brokers have repeatedly violated those regulations. In many cases, the regulatory violations appear have been deliberate, with the intent to break the rules to take more money from their customers. On the other hand, there are several forex brokers who have never been subject to any regulatory action over all the years they have been dealing in forex.
This would appear to represent an effort to run an honest business with fair treatment to customers. Take a look at our US forex broker reviews to see which brokers have been subject to regulatory action and fines. Skip to main content. On this page we will cover: The following are the organizations that regulate retail forex trading: How this fits together: See the following for a visual representation of the US forex regulatory relationships: The generic trade broker reviews are not CTAs: This includes most trading recommendations where everybody is receiving the same advice 4 Introducing Broker IB: Here are some related points: Unregulated Commodity Pool Operators: Managed funds are one of the key types of scams that we elaborate on in more detail.
THe most important thing for you to remember if that if you are going to participate in a managed fund, make sure it is a fund that is registered with the regulators. That way you will benefit from regulatory protection, and have a better means to recover funds in the event that the fund engages in fraud. Unregulated Commodity Trading Advisors: Most of it is bad advice. By giving the advice in a generic fashion, such advice is not subject to regulation.
This area is full of scam artists. You should be very mindful of your sources of trading advice. Above all, never give trading authority to a third party unless they are a regulated commodity trading advisor. This will give you better protection in the event of a fraud. The NFA is one of the most generic trade broker reviews financial regulators on the planet. They keep a close watch over their members, and they go after them pretty hard in the event of wrongdoing.
They are not allowed to engage in any fraudulent activity or to deceive their customers. They must let you know what you are getting into. Members who solicit customers must provide risk disclosures prescribed by the CFTC that cover the following: Your dealer is the counterparty to your trades, which is a direct conflict of generic trade broker reviews The electronic trading platform is not generic trade broker reviews exchange, but merely a connection to your dealer The money you deposit with your dealer has no regulatory protection.
In case of bankruptcy, the funds you deposited with your broker are considered unsecured creditor's claims Your dealer chooses the prices that are available to you. The prices offered to you may generic trade broker reviews different from the prices offered to a different customer An introducing broker may receive compensation from your business with the dealer in ways you are not aware of The generic trade broker reviews disclosure must also inform the customer of the number of retail forex accounts and the percent that are profitable.
For communications and promotional materials for the public, written procedures must be created and enforced that align with the following: The materials must not be fraudulent or deceitful, use high pressure sales tactics or imply that forex trading is appropriate for all customers No representation generic trade broker reviews be made that deposited funds are segregated or have special generic trade broker reviews under bankruptcy laws If claims are made that trading is commission free, the actual means of compensation must be prominently disclosed No claim may be made for guaranteed fills or no slippage unless this can be proven to be the case, and that the customer contract aligns with this fact Any mentions of potential profit must be accompanied by equally prominent disclosures of the risk of loss Claims of hypothetical performance that could be achieved by a customer using a member's systems must by accompanied by specified risk disclosures as well as a comparison to performance of actual customers over a similar timeframe Price Adjustments: The FDM only uses automated straight-through generic trade broker reviews to enter generic trade broker reviews offsetting positions with another counterparty The price of the offsetting position was adjusted or canceled by the other counterparty The adjustment and notification to the customer take place within 15 minutes of the original order execution All customers affected by the adjustment or cancelation made by the other counterparty receive the adjustment, regardless of whether the adjustment is favorable or not Price slippage happens when the price of an instrument changes between the time an order is placed by a customer, and is received by the FDM.
This is permissible if either: Why simply choosing a regulated broker does not offer you enough protection Simply put, many forex brokers have violated US forex regulations.
What kind of forex broker do you want to deal with?