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TOPIC: Forex Broker Choosing - A Dynamic Process

Forex Broker Choosing - A Dynamic Process 2 months 2 weeks ago #1482803

  • Nowseore
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Every trader, whether they are retail traders or small institutional traders, needs forex brokerage firms. The larger you become, the closer you are to the major market participants - banks, mutual funds, hedge funds, large investment firms. Banks account for 75% of global forex market capitalization. Banks can act as brokers themselves. Individuals and small trading firms account for the remaining 25%.

The selection of a forex broker is a dynamic process influenced by several factors, including:

Regulated or unregulated forex brokers.

Trading for your own money or managing other people's money depends on where you are in your trading career.

Your trading capital.

Your trading requirements and the services of a particular forex broker.

Tax implications of trading with a broker based in the U.S., U.K., Switzerland, or a tax haven country such as Hong Kong, Singapore, British Virgin Islands, Bermuda, Cyprus, etc.

The new leverage imposed on U.S. based forex brokers on October 18, 2010 (old leverage was 100:1) already affects traders who have accounts with them.

Brokers who become regulated in the forex market hope to attract more clients, but it is voluntary rather than compulsory. Your funds are certainly safer when they are deposited with a regulated best forex broker. This issue is discussed in more detail in the section entitled 'Safety of Your Funds'.

If you're just getting started with forex trading or are exploring the possibility of a career in forex trading, there are many brokerage firms available to you. This is probably a stage in which you are testing the waters. You may want to deposit a few hundred or thousand dollars. However, this is a relatively small amount. When you advance in your trading career, you are most concerned about the safety of your funds, since tens of thousands, hundreds of thousands, or even millions of dollars are large sums of money.

A trader or a trading firm may, on the other hand, open an account with a broker domiciled in a particular country in order to minimize taxes. Due to their status as tax havens and well established forex regulatory bodies, the United Kingdom and Switzerland are likely to be popular choice at this point in time. There may not be such well-established regulatory bodies in Anguilla, the Bahamas, Barbados, Bermuda, the British Virgin Islands, Cyprus, Panama, the Russian Federation, Costa Rica, etc. Many forex brokers are setting up offices in Hong Kong and Singapore to offer their clients a better regulatory reputation and tax advantages. Get more info about usd to zar.

As a result of the collapse of large and well-established financial institutions such as Lehman Brothers (U.S.), Northern Rock (U.K.), Kaupthing, Glitnir, Landsbanki (Iceland), and other smaller financial institutions around the world, other financial markets, including forex, have been affected. For instance, in October 2010, the National Futures Association in the U.S. imposed new leverage rates of 50:1 for major currency pairs and 20:1 for cross pairs from the standard 100:1 rate for retail clients of all forex brokers domiciled in the U.S. Brokers outside the U.S. are not affected. No matter how you look at it, it doesn't necessarily mean something good or something bad! Minority of successful traders always benefit from changes, while the majority of losers complain constantly about them.
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