Is Trading In Forex Real? Is Forex Legit?

How to check whether forex is legit?

Checking whether a forex intermediary is legit can be done by looking for certain red flags that question the legitimacy of a company. Some of these red flags can include not being registered with the proper financial authorities, not having a physical address, or not having contact information readily available. If a company has any of these red flags, it is important to do additional research to ensure they are legitimate before investing any money.

In this article, the experts at TU have prepared a guide to help you check whether a Forex broker is appropriately regulated. Additionally, they have also put together a list of some of the best and most legit Forex brokers in the world.

Is forex legit?

Most countries have their own respective regulatory bodies that oversee Forex trading activity, and in most cases, Forex trading is entirely legitimate. The main reason why Forex trading is considered to be fully legitimate is that it helps to promote global trade and investment. In addition, it also provides a level of liquidity that is not always present in other markets, which makes it an attractive option for many investors.

How are Forex brokers regulated?

Forex brokers are regulated by financial authorities in most countries. For example, in the United States, forex brokers are regulated by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC). In the United Kingdom, forex brokers are regulated by the Financial Conduct Authority (FCA), and in Australia, forex brokers are regulated by the Australian Securities and Investments Commission (ASIC).

Most countries have local financial regulators that oversee forex brokers operating in their jurisdictions. These regulators have the authority to act against companies that engage in fraudulent or deceptive practices or fail to meet their financial obligations. The regulations imposed by these regulatory bodies vary from country to country. Still, the main aim is to protect investors from fraud and ensure that forex brokers are operating fairly and transparently.

How to check a Forex broker regulation?

It is recommended that you check a forex broker's license before opening an account with them. The following is a step-by-step process you can follow to check for a forex broker’s regulation:

1. Check the website of the forex broker

If the forex broker's website does not mention regulation, then it is most likely that the forex broker is not regulated. It is essential to check if the forex broker is regulated because regulated brokers are required to follow specific rules and regulations set by the regulatory body that safeguards the investors’ interests.

2. Check the information provided on the website

It is always advisable to check the information provided on the website of a forex broker to know if the broker is regulated or not. The information you should look for is the regulatory body's name and the broker's registration number.

3. Check the registration number

Go to the regulatory body's website and check the registration number of the broker. If the website does not mention anything, then it is most likely that the broker is not regulated.

4. Verify SPIC membership

SPIC (Securities Investor Protection Corporation) is a membership organization that protects the interests of investors in the securities market. If a forex broker is a member of SPIC, it means that the broker is regulated and has complied with the standards set by the organization. This provides some level of protection for investors, as SPIC members are required to maintain certain criteria to remain members in good standing.

5. Check the SSL certificate

An SSL certificate is a digital certificate used to verify a website's identity and encrypt information sent to the server. It signifies that the forex broker is legitimate and regulated. It also shows that the broker is committed to providing a secure trading environment for its clients.

6. Check the company status

The main reason behind checking the company status of the forex broker is to ensure that you deal with a legitimate company. There are many scams in the forex industry, and you don't want to be a victim. By checking the company status, you can be sure that the company is legitimate and regulated by the appropriate authorities.

Regulated Forex brokers

1

9.4/10

Go to broker

Your capital is at risk.
Your capital is at risk.

Minimum deposit:

$1

Bonus for deposit:

0%

Regulation:

ASIC, FCA, DFSA, BaFin, CMA, SCB, CySec

Review

Pepperstone (Pepperstone.com) was founded in 2010 in Melbourne, Australia, by professional traders who were not satisfied with the quality of services provided by most brokers. The founders decided to avoid many of the disadvantages of competitors, including high commissions, delayed execution of orders, etc. The founders therefore focused on improving the technical component. The company has set itself the goal of changing the “rules of the game” and setting the bar high for online trading.
Today, Pepperstone offers clients all over the world some of the best technological solutions and favorable trading conditions. The company also provides professional tools that help traders not only master the fine art of trading, but also significantly increase trading efficiencies. In addition, Pepperstone’s platform is scrutinized by seven regulatory authorities, including ASIC (Australian Securities and Investments Commission, AFSL No.414530), FCA (UK Financial Conduct Authority, 684312), DFSA (F004356), BaFin (151148), CMA (128), SCB (SIA-F217), and CySec (388/20). Moreover, with Pepperstone, clients' assets are maintained in aggregated accounts with several major, global banking institutions. These facts confirm the reliability of the company and guarantee the safety of the client's capital.

Pros/Cons

•Attractive trading conditions;

•Fast order execution - 30 ms on average;

•1,200+ trading instruments;

•Low fees; and

•No inactivity fee.

•Support service works only 24/5;

•No cent account;

•Not available to US clients;

•Limited passive trading opportunities;

•Limited analytical materials available on the site. The only way to resolve this issue is to connect to trading signals;

•No news section; and

•Demo accounts can only trade for free for one month only.

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

$1

Bonus for deposit:

0%

Regulation:

FCA, ASIC, FSCA, SCB, and FSA

Review

Trade Nation has been on the market since 2014 and has an expanded network of representative offices that provide their services to traders from over 190 countries. Its clients can both trade CFDs and use spread betting. The company allows hedging, scalping, social trading, and trading by signals. Trade Nation offers more than 1,000 financial instruments that can be traded with fixed or floating spreads on its in-house TN Trader platform or MetaTrader 4. The broker’s activities are regulated by FCA 525164 (Financial Conduct Authority | the UK), ASIC 422661 (Australian Securities and Investments Commission), FSCA 49846 (Financial Sector Conduct Authority | South Africa), SCB SIA-F216 (Securities Commission of the Bahamas), and FSA SD150 (Financial Services Authorities | Seychelles). None of the offices works with U.S. traders.

Pros/Cons

•Licensed activities in compliance with international laws and trading rules;

•No requirements for the initial deposit;

•Account types with floating and fixed spreads;

•Partnership programs with different reward models;

•No brokerage fees for deposits and withdrawals;

•Cent and demo accounts;

•Negative balance protection for retail clients.

•Technical support isn’t available in instant messengers;

•Traders cannot choose a servicing division;

•Fixed spreads are subject to trading hours and change three times a day.

Study Review