What if you are able to successfully trade up a forex account to say $50,000 and then you want to take the money out of the brokerage account, but can’t.
If, for whatever reason, the broker fails to send you the money you have requested from your account, in a timely fashion, then you’re sunk. You will have lost the money you put into the account AND you’ve lost any and all earnings. Unless your forex broker is regulated, you have no recourse. Even if they are regulated, the prospect of eventually getting your money out of the account is slim.
In the United States and in other countries the government has regulated forex brokers in an attempt to make sure they are solvent and responsive to customer requests to withdraw money from their accounts.
In the United States forex brokers are regulated by the Commodity Futures Trading Commission (CFTC). At this time there are only four CFTC authorized forex brokers. Some people believe that one of the reasons there as so few US regulated brokers is because of the cost of maintaining compliance. Many brokers are unwilling or unable to get and stay in compliance with the regulations governing US forex brokers.
As an American citizen living in the United States, you are free to legally open a forex brokerage account anywhere they will have you. Many non-US forex brokers do not accept US customers. I think the reason may be that some countries have agreements with the US to not let US citizens trade forex in their respective countries unless they meet CFTC requirements, although I’m not sure.
The bottom line for us Americans is that there are not many brokerage options for us, or so it seems. We’ve got four CFTC compliant US brokerages and perhaps an additional ten unregulated foreign forex brokers that will let us open accounts. Maybe that’s enough, I don’t know.
What am I missing or getting wrong here?