If you have been trading for more than 5 years, you will already know that the market is a structured random environment. Structured because we can observe and analyze all possibilities from past data to determine the future direction of the market. Random because even though it has been analyzed, sometimes the market will move at will and violate all the conditions we have set. One of the first and foremost steps for us as traders is choosing a good broker. From starting according to the order execution, according to the spread, we have even provided tips for choosing a big and trusted broker that you could check out at http://fairreporters.net/economy/largest-forex-brokers-by-volume-in-2015/.
Here we present the various types of brokerage regulations that exist today. Also keep in mind, not all forex broker regulators have also been tested and proven to be responsible. Based on the level of credibility of the regulator, there are types of forex brokers currently.
– Elite Class Regulators: Brokers who have elite broker regulations are usually closely monitored and already have a proven fund guarantee institution. The client selection process in this elite broker regulation is also not arbitrary. You will be required to meet several verification standards. The broker regulators who are members of this elite class are the United States NFA / CFTC, Germany BaFIN, Swiss FINMA, Japan JSFA, England FCA, Australia ASIC.
– Middle-Class Regulators: Brokers that have middle-class brokerage regulations have guaranteed addresses and contacts, and have an operational supervisory body. However, the guarantee agency for funds cannot be ascertained. If there is, the institution is not guaranteed. Broker regulators belonging to this category are CySEC Cyprus, MFSA Malta, CONSOB Italy, AMF France, FMA New Zealand.
– Offshore Class Regulators: Brokers that have offshore brokerage regulations do not have effective supervision or reliable fund guarantee institutions. Even though the broker has stated that he is following certain insurance. Broker regulators belonging to this category are Belize, St Vincent, and The Grenadines, Seychelles, British Virgin Islands, Panama, etc.
However, not all brokers who do not have broker regulations are bad. Some brokers are not regulated but have more than 10 years of experience, have many clients, and have a relatively positive image. That said, such brokers operate purely as trading service providers, not scammers or scams who just want to run away client funds.