Choosing a Reputable Forex Broker

Most traders desiring to carry out trading activities do so through a forex broker. Acting as a negotiator between a buyer and a seller, a forex broker enables the buying and selling of currencies for the typical trader. When searching to trade the forex market, it is important to be aware of which brokers are reputable and realistic. The number of forex broker scams is astonishing. A forex broker who is reputable has mandates and procedures or services that protect the moral values of the forex market. Click here to see how much do you need to start forex trading?.

Reputable brokers provide protection from deceptive, scheming and abusive activities associated with selling commodities. Reputable forex brokers are registered members of Futures Commission Merchant and Retail Exchange Dealers (CFTC) and with the National Futures Association (NFA). A potential trader cannot rely on how professional a website appears. It does not insinuate or assure a reputable broker. Reputable brokers will list their (CFTC) and (NFA) membership association on their website pages and in its ?About Us? tab. Traders can also research the regulatory entities of countries that are not within the United States.

Opening an account with a broker located in a country that has minimal regulatory compliance and weak enforcement poses a greater risk. A trader dealing with a regulated broker has the recourse to contact proper jurisdiction and file a grievance to attempt resolution should a problem with the broker occur. Regional or municipal brokers may permit a trader?s attendance at trading conferences and discussion groups that help in learning trading principles. Many broker offer the software metatrader:

The interval at which a broker?s business was established adds credibility of the broker?s competence and resilience. All brokers start as new businesses, but those brokers with few or more years of establishment are less likely to be here-today-gone-tomorrow brokers that scheme fraudulently, or administer their business poorly.

Reputable forex brokers accept U.S. customers. Many international brokers choose to discontinue service to the U.S. due to stipulations that they register and comply with new CFTC leverage regulations. Leverage is financing a business?s resources with the use of a debt amount. A business with substantially greater debt than equity is evaluated as being exceedingly leveraged. The leverage limit for major currency retail customers of the U.S. is 50:1 and minor currencies are restricted at 20:1. Reduced ratios of leverage are designed to safeguard businesses and customers from unwarranted and considerable losses stemming from excessive leveraging.