Forex Market is one of the very few things that are loved and hated by the same amount of people. At a side of it, you can see the scope for earning potential. At the same time, many people are scared by the potential threats on the way. That having said, when you have the best experience and strategy, forex is undoubtedly one of the most profitable markets indeed.
Nevertheless, your success at forex market is dependent on multiple factors — and the broker you choose is one of them. As it happens, choosing a regulated forex broker is seen as one of the safest practices to earn revenue from the forex market. So, before you jump into the world of foreign exchange market, you should have a clear idea about regulation, regulated forex brokers and its various aspects.
Regulation in Forex — an Introduction
Regulation in Forex means the process by which the market is kept away from fraudulent activities and other threats that compromise transparency. As we mentioned earlier, the forex market is prone to many issues, such as fraud institutions and manipulative professionals. Therefore, the forex market has to go through at least some kind of regulation.
Because forex market is not a centralized market, a single regulator would not suffice. As it happens, there are a bunch of regulators as far as the forex market is concerned. In fact, each country would have at least a prominent institution that regulates the forex market. For instance, we can take the US. In the United States, the National Futures Association is the institution that regulates forex brokers.
Similarly, Australia has the Australian Securities and Investments Commission (ASIC) for regulation purposes. As a result of this, you will find two types of brokers in the forex market — regulated brokers and unregulated brokers.
Regulated Forex Brokers
Regulated Brokers are regulated by the abovementioned bodies in the respective countries. For instance, in the European Union region, TradeFW.com is one of the best regulated brokers you can find. It means that TradeFW.com is regulated by the European Union, offering you peace of mind over the forex business you are doing. The biggest pro of having a regulated broker is that you don’t have to worry about losing your money due to fraudulent activities or cheating, for that matter.
The problem here is that not all good brokers are regulated. There are also concerns over whether regulated brokers would let you take care of the forex business, if you’re from countries like India. Although there are some good unregulated brokers, there aren’t any assurances.
At the end of the day, the right forex trading company and regulated brokers offer you peace of mind. While you can be tensed about the market situation, there is no need to worry about the general security of things around you.
Unregulated Forex Brokers
As you can guess from the name, Unregulated Forex Brokers are not being regulated by any institution or a governmental body. It means that you have no assurances regarding the safety of the money. There may be even a situation where your resources would be at risk. One of the common problems is the situation where you cannot withdraw the funds. You may not have the best experience from the brokers either, since there is no obligation to any institution.
That having said, there are people who prefer unregulated broker for the claims they make. For instance, it may have a lower commission rate or a less-strict policy. Whether you are ready to compromise the overall transparency of the forex business for some extra money is another question, though.
As it happens, some of the best forex brokers in the world — take TradeFW.com, for example — are coming under regulated category and they are offering the best level of security and assurances to the customers. It means that more people tend to trust regulated brokers and regulated forex trading companies.
In short, having one of the best regulated forex brokers offers you an unparalleled amount of peace of mind. When you continue business with trusted forex trading sites like TradeFW.com, you need not to worry about the issues of transparency. Instead, you can focus on what happens in the market and earn better.