Forex Recipe

Forex brokers are extremely important component of forex trading. Selecting the right forex broker is therefore a critical decision. There are certain factors that you must consider while comparing their services. These are their historical performance, transparency in dealing, limitations, special features, and, most important of all, if they are regulated or not.

Regulated brokers are those who are registered with some authorities. In that cases the brokers are legally bound to abide by rules and regulations. They must also submit various financial reports. This makes these brokers more credible than others who are not part of the regulatory bodies. There are local authorities like the NFA or National Futures Association, FDF or Swiss Federal Department of Finance, etc. In Australia, you will find ASIC, in Canada - OSC; in Denmark - DFSA; in Germany - BAFIN; in Japan - FSA; in Switzerland - GSCGI Polyreg OAR-G ARIF CFB SFDF; in United Kingdom - FSA; and in US - SEC, CFTC, NFA.

As the brokers and their activities are closely monitored by the authorities, this presents more safety to the traders and investors. If anyone complains of malpractice against a broker, the authorities are free to investigate the matters and if found to be true may cease the membership of the particular broker. All the authorities mentioned above have their own detailed website where you can check for any broker.

You can search their site to find out if they are enlisted or not and if any litigations are pending against their name. These organizations periodically revise their list and issues notices and press notes declaring the names of the brokers or institutions involved in some fraud. You must keep yourself updated with this information. These sites also issue advisories to make you aware on types of forex frauds and unlawful practices adopted by brokers.

This entry was posted on Thursday, July 10th, 2008 at 4:37 pm and is filed under Forex Broker, Forex Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.