Is Currency Trading Legal?
Gealena – Is Currency Trading Legal? Forex trading is an investment instrument that not only promises high returns but also big risks. Therefore, you should trade with a broker that has official permission from Bappebti Indonesia to avoid fraudulent investments and fraud. Follow the investment experience at one of the best forex broker choices.
Forex has always been controversial. Either because of the promise of high profits or because of the emergence of many cases of fraudulent forex investment. To ensure that the industry runs well and the interests of consumers are protected. Forex Brokers must have an operating license from the Regulating Authority in the United States.
Brokers in the United States of America are strictly regulated by the State. Forex regulation in the United States is regulated by two regulators, the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association).
Here we want to discuss what are the criteria for choosing a broker for forex trading that is good, safe, and has an official license:
Forex Broker Criteria
Is Currency Trading Legal? We have various criteria for choosing a forex broker. Here is the list.
Many false investment offers are detrimental to consumers. Forex regulation in the United States has repeatedly announced investment companies that have been revoked or banned for violating regulations. One of the most widely banned is Forex scam investment companies.
The first criterion for choosing a broker is the legality of the brokerage company.
CFTC (Commodity Futures Trading Commission)
Make sure you check the legality of a local forex broker to the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association).
Currently, the CFTC (Commodity Futures Trading Commission) website shows many forex broker companies that are registered or officially operating in the United States. However, the question is, is the status of being registered with the CFTC sufficient to ensure the legality and safety of the broker.
I don’t think that’s enough. In addition to your status at the CFTC and NFA, you need to do your own checks regarding:
- Has the broker ever had any problems, especially legal problems
- Have the authorities ever frozen the broker’s license
- What is the history of the forex brokerage company?
Now, checking the above factors, you can easily do this by looking at your digital track record, googling, and if possible ask people who have been in forex investing for a long time.
To ensure the legality of forex brokers in the United States, you can check the CFTC and NFA websites about officially registered brokers.
For novice investors, getting into financial instruments requires caution. It is necessary to study the instrument carefully.
Because of this, you need a broker that has an affordable (small) minimum deposit so you can start trading with a small amount. And later, over time I can increase the trading volume as my trading skills improve.
To find out Is Currency Trading Legal? The broker’s job is not only to encourage customers to trade but also to educate customers about the correct investment methods and strategies.
You should choose a broker that has the best educational services, for example:
- Offers a trial account for investors to practice trading without worrying about losing money
- Provide complete training materials for free on the website
- Make regular webinars to provide updates on the latest market conditions.
The use of a trial account is one way you can check the quality of service, both applications, customer service, and other features. The reason is simple, if, on a trial account, you find a lot of problems or errors, especially on a real account.
So, you should use a trial account to do trial transactions.
We like brokers who provide training materials, which are not only complete but also up to date because the financial industry is very, very dynamic. This also shows the commitment of the broker to always grow with clients.
Foreign International Forex Broker
Foreign forex brokers are a problem because according to Forex regulation in the United States. Unlicensed brokers are not allowed to operate in the United States.
But the reality in the field of online transactions is the way most people use forex trading. Online transactions move without national borders, where people in Indonesia can easily use international brokerage services that do not have a Bappebti license.
Does a foreign forex brokerage mean that it is not regulated? is it dangerous?
In fact, many international forex brokers are subject to the regulations of countries with advanced forex markets, such as the UK, Japan, and Australia.
Even some international brokers have multiple licenses. Not only from one country but several countries.
If using an international broker, make sure that your broker is licensed by the foreign currency authority of a particular country. One of the authorities known to have strict and strict rules is the UK’s FCA UK.
Check on the foreign exchange brokerage site about the permits they have and cross-check with the agency that issued the license to make sure.
For example, FCA UK has a broker license checking service on their website. You can check a broker on the service.
Commissions & Spreads
Another question to find out Is Currency Trading Legal? The broker charges two types of fees, namely: Commission and Spread.
The commission is the fee you pay every time you make a transaction, for example, $ 40 / lot, when buying and selling forex. You pay the fee based on the number of lots you transact.
In each sale and purchase, the broker sets the spread, which is the difference between the BID price and the ASK price. The BID price is the price level at which you can sell (Sell), and ASK is the price at which you can buy (Buy).
For example, the spread value is 1 pip or $ 10. The spread value can be different for each broker and for each account type.
What is often a concern for investors is that the broker provides zero commission but compensates for the high spread value.
Therefore, when comparing commissions between brokers, what you should pay attention to is the accumulated commission and spread, because the combination of fees that you have to pay to the broker, for example in the example above is $ 50 ($ 40 commission + $ 10 spread).
Even though in reality, comparing commissions and spreads between brokers is not easy and requires effort because brokers usually differentiate spreads based on the type of account that investors open.
To find out Is Currency Trading Legal? The forex market runs 24/7 without stopping. One market closes another market opens alternately, so investors need CS services that are available at any time and can always help.
- Good English speaking CS. The main requirement is that a broker, especially customers from abroad, provides CS which can be in various languages. Is an added value of a brokerage company.
- CS skills and having adequate expertise are very important for investors, especially in increasingly complex investment instruments.
- 24-hour live chat service. A good broker provides a 24-hour live-chat service that you can easily contact anytime and anywhere. In addition, apart from service availability, the queue waiting period should not belong.
CS is important in our opinion, especially if you are a newbie, new to investing in forex or other financial instruments.
Trusted Trading Application
The trading platform is a very important tool for investors to be able to trade on financial markets. Therefore, a trading platform that is not only easy but also capable is important for investors.
We have criteria to find out Is Currency Trading Legal, an ideal trading platform, namely:
- User’s Friendly, easy to use, and easily accessible from multiple platforms – mobile, laptop, tablet, and desktop.
- Complete features that make it easier for customers to make transactions and analysis.
- Apps-based, as more and more use of cell phones, customers can use the platform through apps on mobile phones.
To make sure it is suitable or not with the trading platform that the broker provides, you can start with a trial account, which does not require placing any investment money.
You can read in full at Currency Trading Best Full Explanations
Is Currency Trading Legal? Legal Forex brokers definitely provide Copy Trades
We have tried at an international broker that provides Copy Trade facilities.
As the name implies, copy trades are you following or literally copying trades of investors that have proven successful. Good as a reference for those of you who are just starting to dive into investing to learn from the experts.
Deposit & Withdrawal of Fund
Is Currency Trading Legal? If a Forex Broker provides convenience in Deposit and Withdrawal transactions
Investors need to pay attention to how to deposit and withdraw funds to and from a brokerage account. It is important that you pay attention to how easy and cheap it is to deposit and withdraw money at the broker.
For deposits, you need to pay attention to how to make a deposit, whether it is possible to make a transfer by a local bank or have to make a transfer to an international bank, and how the options for the deposit method are, for example, transfer, credit card, debit, and others.
The deposit option by means of a transfer via a local bank is very helpful because it is only subject to transfer fees between banks in the United States.
To withdraw, you need to pay attention to several factors, namely:
- How to withdraw is easy and provides many options. For example, it could be through local banks, Paypal, and Debit Cards (Visa and MasterCard).
- Withdrawal fees. Generally, forex brokers charge a fee for withdrawing funds. For example, one of the brokers we have used deducts $ 5 in fees every time a customer withdraws funds, but there is also a deduction of up to $ 25 in fees.
- Minimum withdrawal of funds. The broker sets a minimum withdrawal of funds.
Withdrawal provisions you should pay attention to from the beginning of opening an account because this provision has cost implications that are sometimes not small.
Is Currency Trading Legal? If a Forex Broker is transparent, open and clearly recorded about the Administration Fee.
Each broker sets a number of admin fees. The problem is, sometimes we don’t read in detail about these costs and only find out after plunging into them. It is not only a matter of the amount of cost but what is also important is the requirements for determining the cost.
This legality aspect is very important for most investors who want to ensure that forex transactions are carried out at a legitimate broker, not a fake investment.
The benefits of a broker having an official license from the CFTC and NFA are:
- The legality is clear to operate in the United States so that the CFTC and NFA do not have access to it, as is happening now.
- Customer money is kept in an account that is separate from the broker’s operational account to ensure the safety of customer funds, as stipulated by the CFTC and NFA.
- If a dispute occurs later, the customer can complain and ask for resolution assistance from the CFTC and NFA.
Hopefully, the explanation in Our article can answer the question, Is Currency Trading Legal?