On the following post you are going to discover what the Forex regulators are and why these bodies are so important for Any Forex trader.
So how do you start your hunt for your perfect broker? Do you go to Google, type ‘cheap broker’ and then search? Is it a fancy broker website that appeals to you the most? Is it things like a free-eBook or 30% deposit bonus and stuff like that on the broker’s website that affect your judgment?
If you answered’ Yes’ to any of the above, then my following statement will come as a shock to you but it is true that an average trader loses an average of $15k to some fake, corrupt and the fraudulent broker. Internet crime is on a rise so you will be surprised to know that nearly 50/% of the brokers that you see online either do not exist in real or are indulged in all kinds of malpractices including price manipulations and outright thefts so as to dupe you of not only your hard-earned profits but also of your basic investments. It might be the time to correct your selection criteria which takes us to understanding who ‘ Forex Regulators’ are.
Like any other Industry, forex also has a supervisory body in each country with the main role to lay down the policies for fair and ethical business conduct of all forex-related bodies within its jurisdiction and ensure maximum protection to the interest of their financial investors. These supervisory bodies are called ‘FOREX REGULATORS’ that make it mandatory for all forex brokers or IB’s or signal sellers existing in its jurisdiction to first register themselves and then operate within the policy framework with due diligence and strict compliance to the laid down policies. Mostly independent, these bodies enjoy a wide range of rule making, investigatory and enforcement powers to meet their objectives which in a single line definition is ‘Principles of an honest business and fighting financial crime’.
To start with your broker search, it is important that you go to the website of the regulatory body of the country where you reside or wish to trade. On these websites, Forex Regulators publish an up-to-date register that has the list of all its registered broker members. It is on the same register that you will find details of any or all the complaints lodged against any broker by traders like you and me who might have suffered due to some corrupt practices of the broker. This register will also have a list of banned or bankrupt or insolvent brokers or other forex related scam companies, so that you know who you have to keep away from. Its only after scrutinizing this register that you shortlist a few brokers meeting your criteria and then you go to their websites, never through Google. Ofcourse, then you are free to decide who is offering the maximum bonus or free ebooks or personal coaching etc. anyway, let your first step always be to go the regulators website and then find the broker. You must subscribe to the newsletter of the regulator so that they can keep you apprised of the latest scams companies and the latest brokers gone bankrupt. There’s also the advantage that next time you find a problem with your broker, you know where you have to go and report.
To name a few of these Forex Regulators, there’s financial services authority (www.fsa.gov.uk) in United Kingdom that governs all forex related activities within the country. Similarly, there’s National futures association (www.nfa.futures.org) in United States, Swiss financial market supervisory authority (www.Finma.ch ) in Switzerland and so on. I can tell you these Forex Regulators at least are not fake. In fact, if you could take out time to visit their websites, you will be able to find the multiple options you have with you to register your complaints against a broker if the broker refused to pay your profits or manipulated your orders. Do you know that these forex regulators also facilitate you to ask for compensation in case your broker is fair but goes bankrupt? You might want to check out financial services compensation fund (www.fscs.org.uk) where you will learn that after finding all kinds of broker adversities, you can still file a compensation claim at no cost to you at all. What more, even the membership to these bodies is absolutely free.
How To Check Broker Registration in The FSA