Regulated vs unregulated

what are the pros and cons of regulated and unregulated brokers?

It’s a complicated issue , even though generally we always emphasis on broker regulation when choosing a broker but there is no guarantee that regulated broker always make sure security of funds with surely.

There’s no pros and cons of regulated and unregulated brokers. You just simply do not trade with an unregulated broker.

can you ensure where are you from ?

Can you please stop posting ill informed nonsense like this, you’re helping no one.

If you open an account with a UK regulated broker (FCA) and the broker defaults or ceased trading, your funds are protected up to £50,000.
This even applies if you are resident outside the UK

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Regulation is very important. With regulated broker you get some protection of your funds. When a company following all the rules and regulations, it indicates that they are serious in their business. For an unregulated broker we can’t say this. So choose your broker wisely.

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I just want to know that which broker is better to trade with and why?

Choosing right broker is the biggest challenge.

I am from Switzerland.

You’re from Switzerland so you should trade with a Swiss broker which is regulated by a Swiss regulatory body. Swiss regulation is strict and good for traders.

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For safer trading it is better to invest with the regulated broker is an assurance for it.

Dukascopy might be a place to look ?

Yes it’s a big challenge, so don’t choose a broker with an emotional state , because the broker can affects the result of our trading with certainly. always try to be cool when choosing a broker.

This is a fasle statement and we are conditioned to beleive that “regulated” brokers are better than the non-regulated ones. For example Man financial, MF Global and Lehman brothers are better than lets say Alpari (because at one time they were also unregulated). I’m not saying Aplari is the best, there are numerous “offshore” brokers that are somtimes also refered to as unregulated brokers.

I see your response as derogatory and full of frustration. However, Im not sure why you would not just ignore a topic that you dont like. There are a lot of other posts on this forum to have conversation at.

I agree with @Hadden a 100%

My question is WHY is regulated broker better than an unregulated broker.

Here are some facts about regulated brokers

  1. FXCM got sued by CFTC for falsifying their B-Book model
  2. MF Global redirected their clients funds to buy Euro bonds and went bust
  3. very recently a large UK broker Beaufoet securities got busted for money laundering and investors will not get their money back until the audit is over (Beaufort Securities Limited ("BSL") in Administration & Beaufort Asset Clearing Services Limited ("BACSL") - in Special Administration ("the Firms"))
  4. Average client loss ratio at so called “regulated” broker is ~77% based on ew ESMA disclosure
  5. Latest ESMA regulations require all “regulated” brokers to get so called “B-Book” license if they want to keep offering services to retail clients.

SO, if there is 77% probability of retail clients making a loss and “regulated” brokers are operating with the right to “b-book” you, I dont see what makes them any better.

Theoretically, all derivative trading is zero-sum-game (a very well proven fact). SO one trader’s loss is another traders gain. So in a mathematical world, your probability of making money is 50%. But in practial sense One trader’s loss is another traders profit (MINUS commissions).

So mathematically, the larger the commission, the less and less are your changes of making money because the probability of you making money decreases as the commissions increase.

Now lets compare commissions of regulated brokers and offshore brokers (so called “unregulated” brokers). Anyone who has dome some research on commission knows the answer to this already.

It is important to do your research when choosing a broker. The most important thing to look out for is

  1. Broker’s reputations and reviews online (because no matter weather he is regulated or not, if he is reputed and trusted among traders, he is way more likely not to fall for your 10 cents and rather focus on maintaining their own business image) Regulated or not, it will not matter because reputation is more important to any financial services company

  2. Broker’s commissions. For me this is the most important matrix because I know my probability to make money decreases exponentially with slight increase of commissions

  3. Client Support.This is important becase when things go wrong you dont want to keep staring at your computer and hope to get a reply from broker that is more than a simple recitation of their long policies and client contracts

I can go on and on about my argument, but I will stop here, with a closgin argument, to save you time.

CFH is a leading “regulated” broker and Liquidity provider who recently got bought in Playtech (a gambling pioneer). Not sure why a gambling leader has so much interest that they bought a regulated broker/liquidity provider for 120 Million USD Dollars ?

Here is the link : Playtech acquires CFH Group for $120 million

Are you still inclined to think that “regulated” brokers are better :wink: , is Yes, then best of luck and please keep sharing your experiences.

And last but not the least, there is another thread here on babypips that I follow a lot. You might find that useful

Hope that helps :slight_smile:

whywescalp, you are mistaken here if you really do not believe regulation to be important

I didn’t ignore this topic because the comment I replied to was misinformation. I then explained why regulation was important, although you chose not to quote that.

End of the day, traders can choose who they wish as brokers but I am not going to stand by and let people give out wrong or misleading advice and shall continue replying to whichever posts I choose.

it was not a misinformation. It was a legit question for a valid concern he had as a trader. He did not recommend any broker or tried to tell people what to do. as much as I can read from the post @Emily_smith had a well intended post to ask right question and thats why there are replies to the post because this is a COMMON question.

Please re-read the question

rest assured, I have no intentioned to lock my horns with you. The readers of this post are a better judge than you or me trying to put our “irrationally” strong arguments or bullying readers of this thread. My suggestion to you was simply to not make matters personal and let people have freedom of speach on the forum.



My post was not responding to Emily, it is a perfectly valid question she asks.
My post was to Hadden who said there is no guarantee of security of funds with a regulated broker, which is simply untrue as I explained

There are a number of posters here who regularly post incorrect, bland/meaningless, or completely irrelevant replies to questions for reasons only they know. All this does is confuse new members more, which is of no help to anyone

No hard feelings

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