Forex Brokers GuideForex Brokers Guide

What Makes the Ideal Forex Broker?

When you are trading Forex choosing the right Forex broker is a very important task that can really make the difference between winning and losing. As the Foreign Exchange market has grown enormously during the past decade hundreds of new Forex brokerage companies have appeared. Some of these Forex brokers are honest and good for trading, others not. In this article, you may find all the essential aspects of trading that may assist you to evaluate any Forex brokerage company before opening a new account. Different trading styles create different brokerage needs, and therefore, before opening a new account it is wise to define your own trading style according to your special capabilities, your available time for trading, and most importantly your risk-appetite.



  • IMPORTANCE: 10/10

1.1 Regulation

The safety of money when trading online is the top issue for any wise trader. An honest Forex broker should apply rules and policies to ensure the integrity of its operations. It’s highly recommended to choose only among Forex brokers who are regulated by trusted regulatory bodies. Regulators monitor and control all their listed Forex brokers and are able to impose penalties in case these brokers are misbehaving. Furthermore, traders who are scammed can make an official complaint to the regulator, and if they are proved right, they can take their money back.

Forex Market Major Regulators


Why is Regulation Important?

The Foreign Exchange market is a purely decentralized market operating without any central or clearing service. In that context, there are several governmental and other supervisory bodies aiming to manage and to control financial entities such as Forex Brokers and force them in following fair business practices. These bodies provide financial licenses but also apply penalties or even remove licenses if certain financial entities tend to misbehave.


Regulator's Objectives

(1) Ensure ethical business behavior

(2) Control Forex Brokers and force them in following fair business practices

(3) Ensure the minimum liquidity standards

(4) Minimize the business and systemic risk of the Financial Industry

In accordance with their regulatory standards, brokers become subject to audits, reviews, and evaluations. Not every Forex broker is licensed and regulated by reliable bodies and thus traders must be very careful when choosing their partners.

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Major Forex Regulators Around the Globe

Here are some major Forex Market regulators in alphabetical order:


(1) ASIC -Australia

ASIC is the Australian Securities & Investments Commission found in 1991. Employees 2,017 (As of 2013).

Document» Australian Securities and Investments Commission Act (2001)

Forex Brokers» AXI trading | » AvaTrade | » IronFx


(2) BAFIN –Germany

BaFin is the German Financial Regulatory body found in 2002. In German means Bundesanstalt für Finanzdienstleistungsaufsicht. Employees 2,100 (As of 2011).

German Financial Authority

Forex Brokers: » IronFx


The CFTC is the US Commodity Futures Trading Commission found in 1975. Employees 435 (As of 2006).


(4) CYSEC -Cyprus

CySEC is the Cyprus Securities and Exchange Commission found in 2001. Employees 42 (As of 2009).


Forex Brokers» IronFx | » FXCC | » Orbex

(5) FINMA -Swiss

FiNMA is the Swiss financial supervisory authority found in 2007. FINMA supervision includes banks, insurance companies, stock exchanges, and securities dealers, as well as other financial intermediaries in Switzerland. Employees 350.


Forex Brokers: » Dukascopy

(6) FCA UK -United Kingdom

FCA UK is the Financial Conduct Authority of the United Kingdom found in 2000 (as FSA). FCA is responsible for regulating the UK Financial Markets (UK Financial firms, brokers and exchanges).


Forex Brokers: » AXI trading | » IronFx | » FXCC

(7) MiFID -EU

MiFID is the European Union Financial Instruments Directive 2004/39/EC, found in 2004 (started operations in 2007).

» L145, 30 April 2004, pp. 1–44

Amended by » 2007/44/EC, » 2008/10/EC


(8) NFA -USA

NFA is the US National Futures Association. NFA is an independent regulatory organization found in 1982.


Forex Brokers» AAAFX

(9) SFC -Hong Kong

SFC (Securities and Futures Commission) is a non-governmental regulatory body found in 1989.



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Forex Market Regulation