The forex market is the biggest and most liquid market in the entire world. This market is open 24*5 for traders to make money. Since it is entirely decentralized, no single institution has control over the market. With the developments in technology, you can find many trading platforms available for traders to choose from. This has made it easier for investors to enter the forex market. But the important thing to consider here is that not every trading platform can be considered reliable.
So, in case you are looking for a trustworthy trading platform, firstly, you need to choose a licensed forex broker who has been permitted to work in your area. Various countries have various regulatory authorities, and hence the regulations may differ from country to country. The regulatory authorities must ensure the broker adheres to specific regulations and that traders’ interests are protected at all costs.
The Most Trustworthy Regulated Brokers in 2022:
The regulatory authorities have been given the privilege to impose fines or even cancel the licenses of brokers who do not comply with the given rules. If a broker loses his license, he can no longer operate legally in a particular jurisdiction. Many regulatory authorities regulate brokers worldwide; while some are strict and more reliable, others are lenient and less credible. Some of the most popular regulatory agencies are CFTC, FSA, FCA, IIROC, and SFC, among many more. Besides, numerous forex brokers today prefer to get their license from an offshore jurisdiction because it is cheaper and quicker, and there is leniency in enforcing rules.
Why Should You Choose Licensed Forex Brokers?
One of the significant reasons to prevent dealing with unlicensed or unregulated forex brokers is that they don’t care much about investor protection. To put it simply, there is no guarantee for traders whether they will be treated nicely and fairly and receive their funds back. In addition, no regulatory agency will come forward to resolve your disputes and offer protection if you choose an unregulated forex broker. Even when you win some profit, it won’t be easy to cash it out. In short, nothing good can come from dealing with an unregulated forex broker; therefore, it is better to avoid hiring them.
Forex brokers obtain their licenses after going through strict background and security checks. If a particular broker has received approval from an appropriate regulatory authority, it depicts the brokers conform to all the required rules and regulations when it comes to the traders’ protection.
How Can You Check if a Broker is Regulated?
There are numerous ways to check if a particular forex broker is licensed and reliable. Licensed brokers generally have a seal of approval from the regulatory agency and display their license number at the bottom of their website. However, never trust the broker’s website blindly.
All the regulatory agencies have their own database on their official websites, which allows the investors and traders to verify whether a particular forex broker’s license is valid. Traders are also recommended to check the broker’s contact details on their website with those mentioned on the regulatory authority’s website.
Additionally, choose a broker who has a registered office in your country. It is essential to consider that some forex brokers take regulatory status from the regulatory authority of some other country for their own benefit. This is referred to as regulatory arbitrage.
For example, a forex broker might have obtained the license from a stringent regulatory agency and then established a separate company under a similar brand that is regulated by an offshore regulatory authority. Thus, the traders should ensure to create a trading account within the jurisdiction they want.
Once you have chosen a forex broker, never start trading with large deposits. Instead fund your trading account slowly with a little amount of money at first. Once you have generated some amount of profits, you can request the withdrawal of cash and check whether you actually received the money or not. If everything turns out to be smooth, you can have a piece of mind that the forex broker in question is reliable and trustworthy. But if you start getting phone calls from the broker to fund your account with a little more money before you can withdraw, better choose another broker.
