Daily Forex #8 - How To Select A Forex Broker

ryanng (50)in #forex • 7 years ago

There are thousands of Forex Brokers out there today. The question I get asked most often by students and other forex traders is "Which broker should I trade with?"

My answer is simple. Always trade with a broker that is regulated. There are 2 licenses which are generally recognized as the most reliable and reputable by the forex industry. The Financial Conduct Authority (FCA) from UK and the Australian Securities & Investments Commission (ASIC) from Australia.

If a Forex Broker that is regulated by the FCA goes bankrupt, the Financial Services Commission scheme will cover all retail clients up to the amount of £30,000 and 90% for the next £20,000.

If a Forex Broker that is regulated by the ASIC, it is a requirement that all client money be fully segregated and held in trust. The broker is also required to provide an accurate reconciliation of the amount of reportable client money held in a client money account for each client, and the corresponding amount recorded in the licensee’s records, as well as an aggregate reconciliation.

Any broker that holds one of the above 2 licenses, in my opinion, is a reliable broker. It would be advisable to check that the current broker you are trading with is regulated by either the FCA or ASIC.

Having said all these, I have also traded with and had good experience with brokers that are not regulated by the FCA or ASIC. At the end of the day, when I click on the withdrawal button and the funds appear back in my bank account a few days later, that is a broker I will continue to use. However, I will not deposit large amounts. I only do that with a reputable and regulated forex broker.

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