Is It Safe to Trade FOREX?

This is not the issue it was even five or six years ago. You can thank the NFA and CFTC. The fly-by-nights are mostly a thing of the past. Unfortunately, it entails throwing out some baby with the bath water. Some very reliable and sound small firms have either closed shop or been absorbed by a larger FOREX broker. It now requires $20 million to be a FOREX FCM. An unguaranteed IB requires $45,000. All brokers registered with the NFA will display their ID number somewhere on their website. If not, ask for it. Be careful, some very small overseas firms with no registration have taken names very close to larger reputable firms.

You may do a search of any broker here: Both the NFA and CFTC are good places to go for information concerning broker financials and any complaints listed against them and actions taken. A precautionary note: most brokers, even the best of them, may have a complaint now and again. Not all complaints are valid. Some offshore brokers continue to offer accounts to U.S. traders with leverage well above the NFA/CFTC mandates as well as hedging. There are some real or perceived loopholes in legislation and regulations encouraging these companies. My adviceâ

By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2016. Content published with author's permission.

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