The Forex Savior Seal of Approval
In light of the government takeover of Crown Forex I am once again being asked, “which specific broker do you recommend?” That is not for the Savior to say. Different brokers have different products and all traders should conduct a regulatory background check and thoroughly demo test a broker’s platform before opening a live trading account.
That said there are many solid brokers in the market place who are regulated and unlikely to go under anytime soon. Here is the Savior’s list of approved brokers:
U.S. Based Brokers
1. Oanda
2. FXCM
3. Gain Capital
4. GFT Forex
5. FX Solutions
6. Interbank FX
7. CMS Forex
European Based Brokers
1. Saxo Bank
2. IG Index
3. CMC Markets
4. MF Global
5. City Index
Banks
1. DBFX
2. CitiFX
I have omitted smaller based U.S. brokers who have yet to meet the $20 million capital threshold, Swiss brokers who have yet to get a banking license and any offshore broker hiding out in shady jurisdictions such as Cyprus or Belize.
Of course, any of the brokers on the Savior’s list of “approved” brokers could run into trouble in the future. If Lehman Brothers and Bear Stearns can vanish overnight no financial institution is immune from insolvency. Already, I have reported on the financial troubles of both Saxo Bank and CMC markets in the last few months. But even taking into consideration the mass layoffs at both firms neither is likely to go belly up and take customer deposits with them.
In addition most of the U.S. based brokers on my list have had various regulatory actions taken against them (none of them however were charged with any financial violations and were related to marketing practices, which doesn’t interest me.)
I’m sure there are readers thinking to themselves, “that broker on your list is a crook and a cheat so how can you approve them?!” Simple, because those who feel one of these brokers has cheated them always has the option of filing a complaint with the appropriate regulator and have your day in court. But if you are trading with an unlicensed broker you’ll be lucky to even get a customer service agent on the phone to complain to in the first place let alone actually have an arbiter hear your case.
In short, I would feel comfortable opening an account with any of these brokers. Hence the reason they have been given “The Forex Savior Seal of Approval.”
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