No matter if you’re a small trader in the retail market or a small institution forex trader, all of us have to make use of an forex brokerage company. The more powerful you are, the closer you are to the largest market participants such as banks, mutual funds and hedge funds, as well as big investment companies. They comprise approximately 75% of the market capitalization of the forex. Some banks are brokers themselves. Another 25% are private traders, like me and you as well as small-sized trading companies. futures broker
The choice of a good forex broker isn’t an easy task. It’s a dynamic process dependent on one or more of the following aspects:
Brokers of forex that are registered or not.
What is the stage in your trading career you are at. You trade your own money, or manage the money of other people as well.
Amount of your capital for trading.
Services of a specific broker for forex that can meet your needs for trading.
Tax implications if you open a an account for trading with a broker that is domiciled in U.S. or U.K. or Switzerland or tax haven states such as Hong Kong, Singapore, British Virgin Island, Bermuda, Cyprus, so on.
Modifications in the industry’s regulations. For instance, a new multiplier of 50:1 (the previous leverage was 100:1) which was introduced to U.S. based forex brokers as of October 18, 2010. This has already had an impact on those who have an account with these brokers.
In contrast to the commodity and stock markets Forex markets are unregulated. Regulators are voluntary, not compulsory. Brokers who choose to be regulated will hopefully draw customers to open an account. Depositing your funds with an approved forex broker increases the chances of security of your funds. More details about this are explained in the section “Security of Your Funds’.
If you’ve just begun your journey or are looking into an opportunity to trade forex There are a variety of brokerage companies available for you to choose from. The goal at this point is likely to test the waters. You can deposit a few of thousand or hundred dollars. It’s a small amount of capital for trading. But, if you advance through your trading career hundreds of thousands, or hundreds of thousand or million dollars is a huge amount of money. Your main worry is the security of your investment. online trading
On the other hand when individual traders and trading companies are worried about minimizing tax burdens They may opt to sign up with a specific country-based broker to meet tax requirements. At the moment, U.K and Switzerland based brokers are most likely to be popular since they are tax havens in addition to having established regulatory bodies for the foreign exchange market. Other Caribbean tax havens such as Anguilla, Bahamas, Barbados, Bermuda, British Virgin Islands, Cyprus, etc; Panama, the Russian Federation, Costa Rica, could not have these well-established regulatory institutions. As of the moment, forex brokers that have opened branches within Hong Kong and Singapore are growing to offer clients greater credibility and a tax advantages. investment
Because of the recent downfalls of well-established and large financial giants such as Lehman Brothers (U.S.), Northern Rock (U.K), Kaupthing, Glitnir, Landsbanki (Iceland) and various smaller banks around the world, there have been consequences for other markets, including forex. One of the reasons is that in the month of October of 2010 in October 2010, the National Futures Association (NFA) in the U.S. imposed new leverage rates of 50:1 for the major currencies and 20:1 for the cross ones that were previously 100:1 for retail customers from all forex brokers based in the U.S., while brokers who are not based in the U.S. have no impact on the new rates. In other words, it isn’t an improvement or a negative one depending on how one examines it! A small portion of winning traders, it doesn’t matter that much since there are always opportunities that result from the changes, whereas many losers are complaining of the change. Click here Futures trading