MoneyMakingForex.com

Are There Any Really Regulated Forex Brokers?

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Commodity Futures Trading Commission . . .

. . . oversees forex brokers in the USA. Other countries have similar regulating bodies. However, if you notice, I said that the CFTC oversees; they aren't actually regulators of the forex world. No one is.

It's here that the big banks, government banks, and a few private firms rule. What they do goes. No one tells them no.

You are on your own inside the world of forex. The government does not have your back. Whatever you do, you must accept full responsibility.

What's A Small Trader To Do?

You need to find a broker who is self-regulating. You need to find a broker that is honest. If the broker doesn't regulate itself, no one will, and the small trader will get the shaft.

You're best bet is to trade with an electronic communication network broker. You can't find them by just typing in "forex broker" into Google. It's all the dealing desk brokers that have money to burn on paid advertising and search engine optimization.

The way you know if you've found a true ECN broker is if you have to pay a commission.

Gasp!

A commission in forex? No! Not possible!

Well, the truth is nothing is free in life. All those brokers offering no commission are hiding the commission in the spread. And believe it or not, if you pay commission outright to an ECN broker, you will pay less. A dealing desk broker charges 2 to 3 pips in the spread. An ECN broker charges 1 pip for the spread plus 0.5 commission. Do the math; it's cheaper.

ECN Baby!

Also ECN brokers are more likely to be futures brokers as well. That means that they have a much closer relationship to regulating bodies. That means, they are much more likely to be good to you. They don't want trouble.

Forex is only a part of their business and usually the minority. They need to protect the goose that lays the golden egg.