Forex Brokers for US Traders

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As many of you already know Forex trading is the trading of foreign currencies based on expectations of how currency exchange rates will change. If the chosen currency rises relatively to some other currency, this represents a profit. However, if you sell the currency which ascends in value you have made a poor judgement and you will suffer a loss. The Forex market is very liquid, it is global and in practice it is very difficult to regulate.

This is because in addition to individual investors also known as retail customers the Forex market is also used by large investment banks, insurance companies and financial institutions.

They use the market to manage the risks of currency exchange rates fluctuations. The risks to small individual investors and traders in a large and unregulated market are enormous. For example, unregulated Forex brokers often use the allure of high leverage to make themselves attractive to individual investors with low initial investments and capital.

They promise huge profits by using only your forex for us citizens initial investment. However, as forex for us citizens Forex traders know, this is a dangerous strategy and it can lead to big losses just as easily. High leverage increases your profits in the same way it increases your losses.

A small trader should always look to use only his own funds. He should only put at risk what he can afford to lose.

High leverage may seem attractive, but it can be the death of a small investor. Fortunately for retail customers, there are regulatory agencies around the world which regulate big international markets and try to protect traders. These governmental, sometimes federal and sometimes private institutions make sure that the risk of fraud and misinformation is minimized or completely eradicated.

There is no one specific central agency to regulate the Forex market. However, most developed countries have clear rules and laws regarding Forex trading and Forex brokers. In an attempt to explain legal US Forex trading we will list the answers to the ten most frequently asked questions on the topic. If you are a US forex for us citizens you will forex for us citizens no other option, but to trade with a regulated Forex broker so you might think that going through the register might not be worthwhile.

However, checking the information about each broker might be invaluable when forex for us citizens the decision forex for us citizens Forex operator to choose. For example, in the period between and26 thousand people were the victims of illegal activity and fraud. The US Forex market is one of the most highly regulated markets in the world. This makes the market safe for investors and unattractive for fraudulent brokers. The CFTC is a governmental agency, independent from other bodies, which governs over and oversees all Forex transactions conducted through regulated Forex brokers which operate in the United States.

Its main objectives are maintaining the integrity of markets within the USA and protecting traders and investors from being involved in a scam or a fraud. Some of the key regulations include:. These regulations differ quite a lot from other countries where markets are less regulated.

In fact, since the Forex market has started being regulated in the US, a lot of Forex brokers looking for quick profit have left the US and moved to countries with more lenient laws. This further strengthens the notion that the US Forex market is one of the safest for small investors and businesses.

Best Legal US Forex Brokers and Trading Platforms As many of you already know Forex trading is the trading of foreign currencies based on expectations of how currency exchange rates will change. What is the lowest possible initial trading capital that US Forex brokers require?

Forex brokers which forex for us citizens regulated in the US offer many different types of accounts depending on the type of user you are. All these account types come with different initial trading capital requirements.

Which financial control rules should regulated US Forex brokers adhere to? They are also subjected to regular and comprehensive audits every year and are also obliged to report their account balances to the NFA every week.

How do US based brokers forex for us citizens from Forex brokers based in other countries when it comes to financial regulations? US Forex brokers are probably the safest brokers to trade with because they are subjected to a lot of strict checkups and inspections. They are also expected to meet some of the highest standards set by a regulating agency. Can non-US brokers accept US citizens as clients? Forex for us citizens, if you live in the US and you are not a US citizen you will have no problem accessing any Forex broker you choose.

What are the payment options that US based Forex brokers offer to customers? Can I be involved in a broker scam with a US forex for us citizens broker? If a broker gets involved in fraudulent transactions then his license will immediately be revoked and enormous penalties will have to be paid which makes any fraudulent behaviour not worthwhile for the broker. How can I avoid getting involved in a broker scam? This one is very easy.

In it you can see the main information about the regulated brokers. Are banks, insurance companies and financial instructions regulated in the same way as individual traders?

US Forex brokers offer the possibility of trading with virtual money for the purpose of learning how to trade without losing your deposits.

If you are new to Forex trading most regulated US Forex brokers will offer you the chance to open a demo account and start trading. What are some forex for us citizens positives of trading with a regulated Forex broker?

It means that the broker has been operating conscientiously for a number of years. It also means that the trader will be due a certain compensation should the broker becomes insolvent or is liquidated.

Finally, a registered and regulated broker is a guarantee that no fraudulent behaviour will occur. Facebook Twitter Pinterest Google Plus.

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Many of the individual traders are US citizens and forex trading is very popular in states, considering that some other online investment forms are highly restricted. There is a number of forex brokers that offer forex trading to Americans, including operators who are based in the country, as well as brokers that are located offshore. The US dollar is one of the strongest, most sought after and the by far the most traded currency in the world.

That is the main reason why only pairs where the US dollar is paired with either of the other seven strongest currencies is considered a major pair. The importance of the US dollar and its role as the most powerful currency, is definitely an encouragement for many Americans to engage in forex trading. After all, a change in the value of the dollar, which may be a result of a decreased or an increased trade activities to and from the US or a change in the political climate of the country may cause significant changes in the forex market.

Some traders might benefit, whereas others may lose a lot. Learning how to recognize when the value of one currency may grow or fall in respect to the value of another currency is no easy task and there is nobody who can accurately predict the price movements the whole time.

But you can certainly get better at it and manage to get it right most of the time, or at least more often than not. The first, and perhaps the most important aspect is the legal aspect. You are strongly advised to only trade through regulated forex brokers, who have a permission to provide trading services to US citizens.

Only thus you will know that both you and your money are fully protected and that there is no danger of fraud or scam. The Natural Futures Association NFA is the body in charge of regulating several financial markets in the country, including forex trading.

The NFA is a self-regulatory, non-profit organization. The NFA was founded in In addition to financial institutions based in the US, as well as registered broker dealers and holdings, future commissions merchants FCMs and retail foreign exchange dealers RFEDs are also allowed to offer forex trading, but only if they are registered with the NFA.

Now, we have established that in order to be able to provide services, a forex broker has to be licensed by NFA, but that is only a pre-requirement, so to say, a provider has to adhere to certain standards in order to be reliable.

But, there are other things that you should definitely take into consideration. The minimum limit that you are obliged to deposit in order to start trading may vary.

Most operators offer bonus of some sort, usually that is a Welcome Bonus, which can be awarded initially or after you make the first deposit. Bear in mind that a bonus of a lower amount might be more lucrative, if the terms and conditions under which it is awarded are more favorable for the trader.

Usually the brokers get their profit through the spread. Some operators, though, might charge fees per deposit, for deposits made via certain deposit methods. Therefore, it is not surprising that all players are looking for brokers that offer lower spreads.

Most forex brokers offer multiple, at least few platforms. Moreover, there is another, perhaps more vital difference. A broker might offer a platform which features simpler, more basic options, as well as one that is far more complex. It is, of course, better to have an option to choose. Traders trust brokers with their hard-earned cash and it is only fair for them to expect to be provided with the best possible customer service.

It is preferable that the operator offers at least few methods of communication, like email, phone or live chat and it is better if the customer support stuff works around the clock. We already mentioned that some brokers charge fees on deposits and withdrawals. Brokers accept a wider range of payment methods including credit and debit cards, e-Wallets, checks, bank wire transfers and other methods.

Forex brokers have a legal obligation to check and confirm the identity of their customers. Are gains from forex trading taxed in the US? That issues caused a lot of worries for the IRS. Under the current US regulations, forex gains are treated as capital gains.

Losing traders will find this option to be far more favorable. What is the maximum leverage that I can get on major currency pairs? The maximum leverage that you can get on majors is What is the definition of a forex trade customer according to the US laws?

That is due to the fact that the law is designed in a way to protect small investors. Broker Offer Devices Review 1 st. Are American citizens allowed to trade forex? Yes, it is completely legal for Americans to trade forex online.

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