A good broker is the company that supports their customer. As with all other industries, certain rules and regulations must be followed in forex trading. An investor should think that he is a partner with the firm he is working with and a profitable trader can only be as successful as his/her broker allows him/her to be.
“A profitable trader can only be as successful as his/her broker allows him/her to be”
With the aim of preventing fraud, manipulative and malicious practices that we often encounter in the financial market, each country have increased their controls by introducing strict regulations to the companies they are responsible for.
These regulations aim to ensure that firms operate in a transparent manner and to protect the integrity of financial markets.
So what should we expect from a broker?
Security of funds
Forex trading is a risky investment option because forex market contains alot of traps that can erase your investments at once. Therefore, your priority as a trader should be to protect your funds against financial fraud by selecting regulated Forex trading companies. A company supervised by trusted authorities protects your trading capital from illegal financial transactions. Additionally most high-quality regulators in the US, the EU and Asia-Pacific have investor compensation funds that provide compensation to investors in case the firm bankrupts.back to menu ↑
Preventing Consumer Abuse
Top Forex brokers aim to continuously improve their customer service channels to ensure that all investors are treated fairly and respectfully. It is known that some fraudulent brokers are exposed to misconduct such as misleading to gain profits from their customers. The company you with should protect you from consumer harassment, offer a peaceful and enjoyable trading conditionsback to menu ↑
Transparent Trading Conditions
Companies have various transaction costs and conditions associated with a Forex trading account, such as commissions, leverages, swaps, lots, margin calls and maximum orders. As a trader, you must have all the information about the terms of the transaction in order to prepare yourself for the best results in the markets. The hidden costs of trading and the broker’s questionable margin strategies can quickly get you out of the market, which can be a major obstacle to your trading strategies. Trade only with brokers who are honest with trade terms and never work with a company where you cannot get satisfactory answers to your questions.back to menu ↑
Ethics and Conflict of Interest
Forex trading includes buying or selling a currency pair, commodity, CFD, or ETF. These orders can be filled at the broker level through market maker protocols or sent to the liquidity provider at the interbank prices through ECN or STP protocols
Most regulatory authorities have issued strict rules to their brokers to ensure that traders and firms are in a fair conflict of interest. Therefore, you should only choose trusted partners who can offer you access to the best market, which does not limit your freedom to trade.back to menu ↑
Legality of Financial Instruments and Trading Markets
Forex companies offer some new and exotic financial instruments which can be illegal in some countries. For example, spread betting or binary options are not legal in the United States, but they are completely legal in most European countries. While these rules vary between countries, you must ensure that your broker provides the products that you wanna trade, and check if it is legal in your country