US Forex Brokers: How To Select Best Trading Platform For US Forex Traders?
You may have already heard that the US government regulates Forex brokers. However, the regulations are not enough. The watchdogs are more strict and require a certain level of transparency. A broker's license can be lost if they don't follow rules. But the good news is that the newer forex brokerages are providing more choice for the retail trader. You can now pick from many different companies and brokers. Even if you live outside the US, you can still use a US-registered forex broker.
Consider Several Factors
When choosing a US-registered forex broker, you should take into account several factors. It is important to remember that a US brokerage must have a minimum of $20 million in capital. Moreover, the leverage they can offer must be limited to one currency pair. Furthermore, they cannot use hedging strategies and can only have the leverage of 1:1000. They must also be registered with the National Futures Association or the CFTC. Moreover, you should look for an approved US Forex brokerage. The best US Forex brokers are regulated by the NFA and the CTFC. You should always look for the US-registered forex brokerage with the best commission rates. They will help you to make a wise decision. You can even opt for a Canadian-registered broker.
US Registered Brokers
If you are a beginner, you should check out a few US-registered brokers before making a decision. They should be regulated by the NFA. If they are, they will also be listed on the American regulatory agency's website. You should look into the terms of the license, which is required to join this particular broker. You should not worry about the future of the currency. There is no reason not to try a US-registered forex brokerage.
Benefits Of Choosing A US-Registered Broker
There are many benefits of choosing a US-registered broker. You can choose from an exchange-traded fund or a future option. If you want to invest in a forex exchange, you can find brokers who accept US clients. There are a few major advantages to using a US-registered broker: First, it's possible to make money with a US-registered broker. The US regulators will certify your account with a recognised financial institution.
Use Of Leverage
The US-registered forex broker is subject to stringent rules regarding the use of leverage. Because they don't have to meet strict regulatory requirements, US-registered brokers don't have to invest their money in a particular currency. Instead, they don't have to worry about being registered with a foreign exchange company. If you're an American citizen, you can trade in a US-registered Forex broker.
Customer Service
US-based Forex brokers have better customer service than foreign-registered forex brokers. The NFA has strict regulations that foreign forex brokers have to adhere to. A US-registered broker must accept payments in the US dollar. The NFA is not required to do this, but it does not charge you a fee. There's no requirement to be registered with a US-based broker to trade in the country. If you're moving to the US, you can use a USA-based broker.
Registration
The US has strict regulations of Forex brokers. A US-registered broker must meet strict rules regarding their operations. If you're not registered in a US-registered broker, you're not allowed to invest in their account. Aside from that, US-registered brokers must have RFED registration to conduct business in the United States. In addition, a US-registered forex brokerage should have a US-registered entity.
CFTC - The CFTC regulates forex brokers in the US. In the past, there was no CFTC-registered broker. Now, the CFTC has regulated the industry. Currently, more than 40 retail FX brokers in the US serve their international clients. Its jurisdiction is broadened due to the Dodd-Frank Wall Street Reform Act. Although the CFTC is a nonprofit organisation, the commission has the power to penalise a broker if it has committed fraud.
CFTC is not regulated in the US, but it is regulated in the EU. Unlike foreign brokers, a US-registered forex brokerage must be registered in a country that complies with the regulations. Its licensing requirements may be higher than in the EU, but these requirements are lower than in other countries. The Dodd-Frank Act is designed to protect consumers by regulating the industry. A regulated US-registered forex broker will also be a transparent and well-regulated one.