- Forex regulation is a set of rules by an authority with enforcement powers that ensures Forex / CFD brokers treat customers fairly.
- Forex regulation also enables the financial health and stability of the system and provides a mechanism for dispute resolution. In some cases, an investor compensation fund in case of bankruptcy by a broker exists.
- Not all regulators grant equal protection and enforcement.
- I highly recommend that traders always trade with one of the thousands of regulated Forex brokers. While it cannot guarantee against fraud and malpractice, as well-documented cases in the US and Cyprus have shown, regulation offers a layer of protection and security that can benefit traders.
- When a regulator finds a Forex broker guilty of treating clients unfairly, the broker is often fined, and the fine becomes public knowledge. So, it is a good idea to make a google search for “regulator fines *broker name*” when you are considering making a new deposit with a broker. Some brokers have incurred fines but continue to cater to clients. It shows that an attempt to take advantage of unknown retail traders was made, but the regulator caught them