Forex, also known as FX or currency exchange, is one of the largest and most liquidized decentralized markets in the world, with a daily exchange volume exceeding more than $2 trillion. In recent years, currency trading has gained remarkable popularity due to its ease of access and the opportunities it offers.
Why is it so important that a broker is financially regulated by one or more agencies? Because you are talking about the security of your capital, the money invested, and the Broker’s commitment to using the funds only for the right purpose. As in the case of Rakuten Securities (RS) review, when a broker is unregulated, this means that there is no regulatory organization or group of people that control them; in other words, they can take the money and disappear. This is the reason why there are lists of operators that are described as scams or frauds. The first thing to do when checking operators is to check whether they are regulated or not.
While there is no international organization that protects all forex traders, there are certain countries that oversee and monitor the activity of currency trading and the legitimacy of online Forex traders. It is necessary to investigate the regulatory agencies of the country or those in which the Broker has its headquarters. It is of utmost importance to verify all possible ways if the Forex broker with which you are willing to operate is financially regulated. The security of your capital is the first step towards success and profit.
When the Broker is not regulated and does not honor its duties and consequently does not return the investment money, there is not much that can be done, other than generating an online claim. That is why it is so important to deal with regulated brokers. And a broker that is not regulated, such as the cases of the beginnings of cryptocurrency markets, is ideal terrain for hacks and thefts of all kinds before which there is no bargaining power.
Choosing a regulated broker means being sure of the investment and being under the supervision of a legitimate regulatory body. These organizations, or entities, seek to prevent abusive practices, fraud, and fraud to investors.
Regulated brokers have to respond to the practices regulated by regulatory entities, while unregulated brokers do not respond to any practice. When the Broker is not regulated, it is an alert signal to avoid deciding to invest with a said broker.
These are institutions that have the power to sanction financial intermediary. They are usually public bodies or that depend on the public powers, whose mission is based on enforcing financial legislation.
It is extremely important to know that the regulations of Forex market brokers are generally the same as those applied to other markets. Broker regulations are subject to a country’s level of reliability.
The reliability and confidence will be greater in the regulators of the countries of the advanced world, mainly North America, Europe, Oceania, and parts of Asia.
A typical classification in this section is to divide the reliability of the regulations into three levels:
Level 1 regulated brokers
First World countries with fully developed economies and complex financial services.
Level 2 regulated brokers
These would be the following in level and belong to some countries of both the First World and developing. It may well be because they are not regulations that achieve the same level of confidence.
Level 3 regulated brokers
These would be those that have a lesser prestige and are those that belong to Third World countries or in tax havens.
In conclusion, there is no “best broker”; there is no perfect formula that allows finding the one that best suits the needs because it will depend on various factors such as the way of investing, the needs as investors, and the research carried out. The Professionals Brokers have common characteristics, which they share among themselves as data they publish on their website should always be verifiable. They must have different forms of communication and customer service, clear, fast, and tangible such as offices, emails, video calls, and previous meetings. It is necessary to consult the legality of the territory where they reside. This will give the necessary legal security in case of having a problem with the Broker. The data they publish on their website must be verifiable.
Last but not least there is an essential piece of information, if you want to invest in Forex or currencies you must hire a regulated broker, who will generally charge lower commissions and will give you access to trading platforms that will help you to manage your investments better.