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

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50, $100 (for UK clients)

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

Study Review