Forex trading is a profitable business if you know how to go about it. While it is true that many people are recording regular losses in Forex trading, it is also true that you can make a profit from it if you put certain things in mind when trading Forex. For you to be a successful trader, you need to choose your broker carefully. A Forex broker is about the most important entity in Forex trading. Are you a united states Forex trader and you want to make an impact in your Forex trading endeavor? Then it is in your best interest to choose only a reliable Forex broker. There are so many Forex brokers in the USA and they all claim to be reliable.
However, not all of them are as reliable as they claim. So, you need to choose carefully so that you can have the kind of result you desire in Forex trading. The particular broker you register with can determine if you make a profit in Forex trading or not. So, it is in your best interest to consider all options before choosing a Forex broker.
In this write-up, we are going to educate you about how to choose the right Forex broker in the USA. With the help of the information here, you can avoid making the wrong choice. If you choose wrongly, it can cause you to lose a lot.
Is it regulated?
Before you register with any of the brokers in the United States, you need to first find out if the broker is regulated or not. You should never register with any broker that is not regulated. You will be worse for it at the end of the day. The body responsible for regulating Forex brokers in the United States is the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). You should never register with any broker that is not a member of the two organizations. The regulation ensures that your funds are safe. Even if the broker goes bankrupt, nothing will still happen to your funds. So, you are in safe hands if you register on a broker that is regulated by these organizations.
Forex regulations in the United States
According to the previous paragraph, the NFA and the CFTC are the bodies that regulate Forex brokers in the United States. Unfortunately, there is no international organization that regulars the Forex market. However, individual countries set up regulatory agencies to monitor the Forex market within their boundaries.
What is CFTC?
The CFTC is the acronym for Commodities Futures Trade Commission. The agency started work in 1974. Its focus is to protect the interest of individuals in commodities and futures trading in the United States.
The currency market is also under the futures. So, the duty of the CFTC also has to do with the protection of Forex traders. This way, Forex brokers the USA will never be able to take advantage of the traders. A lot of changes occurred in the CFTC over the years. The purpose was to improve how the organization works. The body also creates a level playground for every Forex trader in the United States. The body publishes the COT every Tuesday. COT stands for the Commitments of Traders Report. All Forex traders must only register with Forex brokers USA under the monitoring of the CFTC and its sister body, the NFA.
National Futures Association
The NFA regulates the activities of Forex brokers in the United States. The organization started in 1982. Since inception to date, the body carries out the regulation of the futures market in the United States. The body collects dues to enable it to sustain itself. This means that it does not depend on the government for funding. The NFA is more or less the Little Brother to the CFTC, which is the Big Brother. The missions of the NFA are:
- Enforce the brokers to carry out their responsibilities to the trader
- Protect the traders and investors in the futures market
- Ensure the integrity of the futures industry
Every of the Forex brokers USA needs to register with the CFTC and be a member of the NFA. NFA carries out the process of registration for the CFTC. The following are the members of the NFA:
- Introducing Brokers (IB)
- Futures Commission Merchants (FCM)
- Commodity Trading Advisors (CTA)
- Commodity Pool Operators (CPO)
Anyone that wants to be a broker in the futures market needs to register first with the NFA. Any broker that does not have such a registration is not worthy of your attention.
As mentioned above, make sure that the broker is a member of the NFA and also under the regulation of the CFTC before you register with the broker. This is one point that every USA Forex trader needs to bear in mind. Even if the broker claims to be under the regulation of the CFTC, you should not take its word for it. Rather, you need to first investigate that broker to know if its claims are true. How can you prove the broker to be right or wrong? All you have to do is to verify the registration of the Forex brokers USA with the CFTC. Also, verify its membership with the NFA. Membership of the NFA is never enough.
You should also check if the broker records disciplines by the NFA. The disciplinary history will tell you if the broker ever broke the law of the organization or not. You can verify all the details from the NFA website. When on the website, simply check the information section for brokers to know about the broker in question. You can even give the NFA a call via 800-621-3570. You will never even have to pay a dime to check the details on the broker. You can do this for free by using BASIC. BASIC is a free tool for researching Forex brokers’ backgrounds. However, you can only use it to research Forex brokers that operate in the United States.
What to do if you have a problem with a Forex broker
There is rarely any of the Forex brokers USA that has never had a problem with its clients before. It is not about not having a problem; it is about being able to solve the problem fast. When there is a problem or disagreement between you and your broker about your Forex trading account, you should not hesitate to contact them. Look for their contact details and discuss the problem with them. Try as much as possible to resolve the issue without hassle. Send mails to the broker and you can even call them if their telephone line is available. If all efforts fail, you can then contact the CFTC or the NFA. You can also contact the NFA only. Both of them have a great program that can help to resolve monetary disputes. They can, therefore, resolve that issue that you are having with your Forex trading account.
How to file a case
The arbitrary program of the NFA is your best helpmate in this regard. You can benefit from this program if you feel that you get unfair treatment from the broker. The program can help to resolve your issue if it leads to the loss of your funds. You can call the NFA to file a case against your broker. Aside from phone calls, you can also file a case by visiting the Dispute Resolution Section of the NFA website. If the NFA is unable to resolve the case, you ocean then take it to the CFTC. The CFTC reparation program can help out in this regard. You can file the reparation complaint by visiting the Office of Proceedings on the CFTC website. You can equally call this office to file the case. The CFC phone number is 202-418-5250.
Ease of deposit
The ease of deposit and withdrawal is very important. Find out if the broker does not complicate matters before you register there. Also, find out if the broker provides several deposit methods. A good broker will process your deposit immediately. A good broker will also make it very easy for you to withdrawal your money. There is no reason why your withdrawal should be delayed. The withdrawal should also not be under any unfavorable condition. If any broker places conditions on unhelpful withdrawal, you should steer clear of such a broker. You should take the time to read reviews about the broker also to determine if the organization is reliable or not. However, only read such reviews from reliable sources.
Check the terms and conditions
Before you register with any of the Forex brokers USA, you should take some time to read the terms and conditions. Unfortunately, many Forex traders fail to do this. The problem is common among beginners. The terms and conditions will help you to know if that broker is the best for you or not. Be on the lookout for terms or clauses that will pose trouble for you in the future. If you notice such a thing, then it is better to look for another broker.
If you cannot understand any of the terms, simply connect with someone that can explain it to you. The broker should be able to explain those confusing terms to you. If not, you can look for an experienced person to do that. One other way to choose the right broker is to ask other experienced Forex traders. If that experienced trader can vouch for a particular broker in the USA, then there is a great chance that the broker is reliable. If you are a Kiwi trader make sure to check out NZ Forex Brokers guider for more information.