[FXGuy]

I agree with "Forex Savior" on the importance of a well capitilized firm.

And I beleive NFA will increase net cap further to make sure that only well capitilized firms act as counterparties to Forex trades.

however Many investors thought that FXLQ was well capitalized and now they are having trouble withdrawing their funds.... This is an example of how investors need to look at more then just the CFTC financial data when making a decision on which broker to choose.

Trading Forex OTC with any FCM, well capitalized or not involves counterparty credit risk which means that if the FCM goes bankrupt you will not likley recieve you money back. This is true when trading OTC with any FCM in any instrument that is not backed by an exchange.

Obviously on that basis, you want to make sure you firms is well capitalzed if you are trading Off exchange (OTC).

However, In addition to looking at CFTC select data on FCM's excess net capital, I believe it is also very important to look at the reputational and background risk of each firm (i.e. company history, principals background and contributions to the industry, technology advantages, policies, scalabilty issuse, Backup & disaster recovery procedures, regulatory actions, arbitration cases, and fines and /or charges that resulted in penalties from the NFA, etc..) and also to ask your broker how it manages its counter party risk especially within the recent volatile market conditions.






FXguy