Forex not Regulated! | Forex Factory

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Forex not Regulated!

  • #1
  • First Post: Mar 30, 2006 4:30pm Mar 30, 2006 4:30pm
Hi everyone,

I once read a thread here tha forex trading is not regulated!

I could not understand that. I mean what about the many brokers registered with NAFA and ohter official authorities in the US and other countries?

In what sense fore is not regulated, if that's true?
  • #2
  • Mar 30, 2006 11:55pm Mar 30, 2006 11:55pm
Quoting forexemperor
Hi everyone,

I once read a thread here tha forex trading is not regulated!

I could not understand that. I mean what about the many brokers registered with NAFA and ohter official authorities in the US and other countries?

In what sense fore is not regulated, if that's true?
that is right, nobody will recover your lost if your brokers shutdown, it is a game, big risk and also huge returns.
  • #3
  • Mar 31, 2006 5:42am Mar 31, 2006 5:42am
Thanks walker,
But I couldn't understand what you exactly mean. Refco, for instance, was in a trouble; yet, traders were refunded back!

Still, can a broker just disappear in the air while registered with authorites?
  • #4
  • Mar 31, 2006 7:10am Mar 31, 2006 7:10am
Quoting forexemperor
Thanks walker,
But I couldn't understand what you exactly mean. Refco, for instance, was in a trouble; yet, traders were refunded back!

Still, can a broker just disappear in the air while registered with authorites?
I never heard RefcoFX have refunded back people money. The situation become worse since FXCM give up to take over RefcoFX.
  • #5
  • Mar 31, 2006 4:47pm Mar 31, 2006 4:47pm
I purposely chose FX because it's unregulated. I'll be the first to admit I'm not a rich guy. I've wanted to be a trader for YEARS until the NASD came up with their patten day trader rule which pretty much screws anyone who wants to be a day trader unless they can come up with 25k (oh, and they have to maintain it too). I'll also be the first to admit I don't have a FRACTION of that kind of money.

Here's a link from IB that explains the rule more....

http://www.interactivebrokers.com/en...?ib_entity=llc

FX being unregulated does not apply to this rule!

Anyway I've learned to love fx (partially out of my dislike for the NASD). FX gives you leverage a stock broker would (and could!) never, ever give a client (to to 400:1). FX trades 24/5 and I believe my broker GFT (and probably all) will let you trade with unsettled funds....no waiting T+3!
  • #6
  • Mar 31, 2006 6:53pm Mar 31, 2006 6:53pm
Quoting forexemperor
Hi everyone,

I once read a thread here tha forex trading is not regulated!

I could not understand that. I mean what about the many brokers registered with NAFA and ohter official authorities in the US and other countries?

In what sense fore is not regulated, if that's true?

Well, you can say that the forex market is regulated and not regulated at the same time....Brokers & market makers are regulated so that they don't scam traders, take their money and fly away....But on the other hand, the market itself operates over the counter...There is no exchange, there is no exchange rules, there is no SEC, there is nothing to protect anyone against plays made by the big guys...In the stock market for example, the exchange can halt the trading on a certain stock when it sees certain actions, this would never happen in the forex market as there is no exchange in the first place...

In brief, this is a jungle without any sort of protection, you are alone with your market maker or your broker, cheating is allowed, stealing not....There are some people staying out of the jungle (CFTC, NFA etc...) who assure you that your companion won't steal your money and run away...


Thanks,

Nader
  • #7
  • Apr 1, 2006 3:28am Apr 1, 2006 3:28am
I'm sorry, perhaps I misunderstood the news on Refco.
Now, Why can a registered broker go away with its potential murder?
If a broker runs away with its clients' money, then why registering with NFA and others?
  • #8
  • Apr 2, 2006 1:00pm Apr 2, 2006 1:00pm
It's clearly stated in the NFA booklet that your forex funds aren't insured.
Here's a lovely quote from page 7:

"Retail off-exchange forex trades are not guaranteed by a clearing

organization. Furthermore, funds that you have deposited to

trade forex contracts are not insured and do not receive a priority

in bankruptcy. Even customer funds deposited by a dealer in

an FDIC-insured bank account are not protected if the dealer

goes bankrupt."
  • #9
  • Apr 3, 2006 8:52am Apr 3, 2006 8:52am
Quoting forexemperor
Thanks walker,
But I couldn't understand what you exactly mean. Refco, for instance, was in a trouble; yet, traders were refunded back!

Still, can a broker just disappear in the air while registered with authorites?
they can go to the officers of authorities, and tell them with sadness: OK i am bankrupt, derecognize my license please. Then the money evaporated, and no any financial laws can prosecute them by. ---- i guess
  • #10
  • Apr 3, 2006 11:35pm Apr 3, 2006 11:35pm
Even if you trade on the OTC interbank you wouldn't have your funds guaranteed. Granted you would have FDIC insurance if your sponsoring bank folded, but the party on the other end of your trade could blow up at any point and you could lose money.

Forex in any form is a risky investment, but thats why the returns are so good. Be happy you even have the opportunity to participate...
  • #11
  • Jul 17, 2013 8:22pm Jul 17, 2013 8:22pm
It is totally true, any experienced trader knows that forex is not regulated because the SEC is the one that regulates financial instruments like stocks, futures, etc, but not for Forex, so even if the brokers have the NFA or CFTC regulations it does not mean they cannot cheat you or even steal you, as those regulations are not even 10% secure as with the SEC. In my experience even regulated brokers make frauds, like FXFirst, Inc a long time ago one russian partner stole all the money and ran away, the CFTC froze the little assets left and at the end after 10 years clients still got no money so do not ever think that your regulated broker is safe because it is not. If you want to trade forex do it through futures, CME global through a futures broker or try another instrument, if your strategy is good there are plenty of markets to trade under safe regulations, forex brokers have damaged too much a noble market like forex.
  • #12
  • Jul 17, 2013 9:29pm Jul 17, 2013 9:29pm
Quoting blanca
It is totally true, any experienced trader knows that forex is not regulated because the SEC is the one that regulates financial instruments like stocks, futures, etc, but not for Forex, so even if the brokers have the NFA or CFTC regulations it does not mean they cannot cheat you or even steal you, as those regulations are not even 10% secure as with the SEC. In my experience even regulated brokers make frauds, like FXFirst, Inc a long time ago one russian partner stole all the money and ran away, the CFTC froze the little assets left and at the...
So what do i need to do to put my money in safe place?
  • #13
  • Jul 18, 2013 9:09am Jul 18, 2013 9:09am
The CME is the Chicago Mercantile Exchange, CMEgroup is the place where all currencies go through, they have a directory of brokers here it is http://www.cmegroup.com/tools-inform...ectory-na.html
You can choose the one that fits you according to your money, commissions, preferences.

I have used tradestation because their charts are great but also you can find clearing houses like Rosenthal, currency brokers like Interactive brokers, Futures, which I really like a lot, like MB trading and Global Futures I use this one for the low margins in eminis), you can choose carefully, study them, talk with them, but it is safer in my opinion to choose one of those than to take anyone with low spreads, regulated in no manīs land, it is a huge difference to choose an american broker/securities/clearing house from CMEgroup than the ones you can see in ads all over the internet, you can see how many "new brokers" have appeared recently, seems like they are all over the place, choose old ones, with good reputation, you could choose a futures broker that lets you trade currencies, or like interactive that has currencies through cme globex, or change the instrument, if your strategy is good, then it will work in any regulated instrument, I did that myself, because for forex I have to get up too early even though I was using currenex directly but its not worth all the cheating you find in forex world. Now I wake up and trade only NY session and do not have to worry for the safety of funds or the tricks of the broker, you can even see your money inside the market exchange. Hope it helps
  • #14
  • Jul 21, 2013 5:31pm Jul 21, 2013 5:31pm
Quoting blanca
The CME is the Chicago Mercantile Exchange, CMEgroup is the place where all currencies go through,

but it is safer in my opinion to choose one of those than to take anyone with low spreads, regulated in no manīs land, it is a huge difference to choose an american broker/securities/clearing house from CMEgroup than the ones you can see in ads all over the internet, you can see how many "new brokers" have appeared recently, seems like they are all over the place,
no currencies go throug cme. the bottom 10% intl broker may be scammy but this easy with quik bing search.Brokers here on the factory was not scam
what about MAN MF GLOBAL why theyre not on your cme list anymore?
  • #15
  • Jul 22, 2013 3:20am Jul 22, 2013 3:20am
The reliability of the broker depends on his regulation. Forex isn't regulated, but the local regulators give you some guarantee. So in case this broker has two or three licenses, it shows that it can return your money if necessary (cause of the broker bankruptcy).
  • #16
  • Last Post: Jul 22, 2013 4:30am Jul 22, 2013 4:30am
Forex is regulated as far as my brokers are concerned. However unlike many unregulated brokers offering very low spreads,
I pay a 3pip spread on the E/U. This sucks but am sure that the broker will not go belly up tomorrow
DAnny
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