Regulated VS Unregulated Brokers.
Online Forex trading can be fun-filled and profitable business venture but can pose a threat to your financial resources if you are trading with a broker that is not adequately regulated. It is no longer news that several online brokers have shut down operations carting away the invested money of their clients. This post will provide you with the necessary information you need to know about regulated brokers in Europe. This knowledge will help you see the best brokers to work with and ensure your funds are in safe custody.
As a visitor to this page, there is a possibility that you are involved in Forex trading or hoping to be a professional trader in the future. In the last ten years, online Forex trading has evolved as one of the legitimate and fastest ways to make money on a daily basis. Selection of a reputable broker who will not run away with your hard earned money can be dicey. Engaging in trading with unregulated brokers is a painful experience that can be compared to placing your head in the mouth of an alligator.
The main reason for trading is to make gains, and it is also crucial for you to keep your money with a reputable online broker who is also willing to assist you to make well-informed decisions.
What You Should Look Out For When Searching For A Right Broker.
One of the sophisticated places to invest your funds is the financial market. The essence of regulation is to protect the interest of individuals who have little or no knowledge about the market. For clarification, a broker will acquire a license of operation and must abide by the regulations that guide the activities of the industry which include submission to routine audits and evaluations, in a bid to ensure openness and to make sure the monies of investors are well protected. Moreover, the name of the Forex regulator will be visible on the home page of a Forex broker if they are indeed licensed.
You need to watch out for the presence of unregulated brokers as they are still very much around. They aim to steal from you and making false promises without offering you a reward. Being cautious to avoid losing money is crucial.
The Cyprus Securities And Exchange Commission
The Forex market is a decentralized market that is not under the control and management of a central agency. Various agencies monitor the activities of the market and also pose as regulators that provide licenses to brokers.
The Cyprus Securities and Exchange Commission came into existence in 2001, and remains one of the most famous regulatory organizations in the world. The body has evolved to be an affiliate of the European MiFID regulatory organization since Cyprus joined the European Union. Members of CySEC are entitled to conduct business transactions anywhere in Europe.
Under this scenario, each Forex broker regulated by CySEC is entirely held responsible under the MiFID decree, and are liable to legal action, heavy payment of fines and revocation of licenses, for not complying with the set regulations and rules.
Why You Should Trade With A Regulated Forex Broker.
A licensed broker is a company that adheres strictly to the rules and regulations of Forex and also ensures the provision of security, safety, and trust. It is a known fact that most of the unregulated brokers make use of unprofessional strategies to manipulate their gains. For instance, they attract new traders with mouth-watering bonuses that are irresistible. These bonuses cannot be withdrawn as well as the real invested funds. On the other hand, trading with a regulated broker is more beneficial as you will have the opportunity to withdraw your earnings from your account. You are assured of your regulated broker’s ability to pay as it abides by the rules of Forex to keep enough money in its vaults to pay clients when there is a request. According to the stipulations of the regulators, licensed brokers are not allowed to make use of invested funds for other purposes.
Though the industry can be deceiving, you should note that the market is not full of licensed brokers. It is imperative for you as an investor to do a background check of your preferred broker before committing your funds and validate if your broker is adhering to the normal standards of the Forex regulation. Selecting a regulated Forex broker is the best technique to trade successfully in the financial market as you are assured of security and safety of your hard earned money.