Forex Brokers: Regulated or Unregulated - Which One to Choose

The foreign exchange market is overloaded with several forex brokers, which makes it hard for traders to select a trusted broker. Forex brokers are divided into two categories that are; regulated brokers and unregulated brokers. When it comes to the needs of traders it becomes tough to analyse among various brokers and choose one broker.

Understanding Forex Trading

Trading in currencies is known as forex trading. The involvement of two currencies is mandatory in forex trading because one currency is bought and another one is sold. The foreign exchange market decides the exchange rates of currencies across the world. A pair of two currencies is known as a forex pair or currency pair.

The best part of the foreign exchange market is that it is the biggest financial market because of a large number of traders. This also means that the liquidity of this market is highest as compared to all other financial markets.

What Is a Forex Broker?

A forex broker offers a trading platform between a trader and the foreign exchange market. Forex brokers are required because you cannot directly deal with the foreign exchange market. It will act as an intermediary in the action of buying and selling currencies. These brokers are also known as currency trading brokers or retail forex brokers. They are classified into two categories, which are:

Regulated Brokers

Unregulated Brokers

Which Are Regulated Brokers?

Brokers which are registered and regulated with financial regulatory bodies are known as regulated brokers. These brokers follow rules and regulations set by the regulatory bodies. Apart from this, they have to submit their financial documents from time to time such as audit reports, account statements, financial statements, and various others.

Which Are Unregulated Brokers?

Unregulated brokers are the ones that are not registered and regulated by any regulatory body. They can trade the way they want to trade because they do not have to fulfil any rules and regulations set by the financial regulatory bodies. There are many drawbacks also to choosing an unregulated broker.

Risks of Choosing an Unregulated Forex Broker

Traders who are trading with unregulated forex brokers are investing their money with huge trading risks. For regulated brokers, it is mandatory to follow the rules and regulations of regulatory bodies. On the other hand, unregulated brokers can commit fraud and mistreat the traders trading with them.

Investors who are choosing regulated brokers are having multiple benefits and they can also have peace of mind. Even though, being regulated does not guarantee you anything. You have to be aware of each fact related to the broker. The risks are:

Your money is not safe with an unregulated broker and you can lose your money trading with them.

They are not bound to follow the rules and regulations, which means if any fraud occurs you cannot register any complaint about the same.

At any moment they can shut down their trading platform and there is no guarantee that they will perform the same for coming years.

The personal information of a trader is also not safe with an unregulated forex broker as they can commit any fraudulent activity.

Regulated Forex Brokers

After comparing several forex brokers in the market, we have shortlisted some trusted and regulated brokers. These brokers are the ones that you can rely on for trading in the foreign exchange market. Some of the top regulated brokers are listed below:

TradedWell : TradedWell is regulated by the Cyprus Securities and Exchange Commission (CySEC) and its parent company is iTrade Global (CY) Ltd. Some of the features of this broker that makes it one of the leading brokers are:

This broker does not charge any commission on trading that means you can freely enter into any transaction.

The maximum leverage offered by the broker is 1:400 in the gold and platinum account and 1:200 in the silver account.

If you are a new broker then you can also take advantage of the feature of a demo trading account by this broker.

Multiple options of withdrawal and deposits make it convenient for traders to deposit and withdraw funds easily.

A wide variety of trading assets are accessible with this broker like commodities, foreign currencies, stocks, cryptocurrencies, and many more.

This broker uses the MetaTrader4 trading platform and offers to trade through Mobile App and WebTrader.

It is protected by Secure Sockets Layer (SSL) and firewalls that ensure encryption of the data of traders.

A wide range of educational material is offered by the broker such as tutorials, eBooks, courses, VODs, and many more.

HFTrading : The operating company of HFTrading is CTRL Investments Limited, which is regulated by the New Zealand Financial Markets Authority (FMA) and also licensed by the Australian Securities and Investments Commission (ASIC). A few leading features of this broker are:

With this broker, you can trade commission-free and save your expenditure on various transactions. It is offering maximum leverage of 1:200, 1:400, and 1:500 in the silver, gold, and platinum account.

Beginner traders can also take advantage of a demo account that does not require any deposit of funds.

You can choose among multiple options that are available for depositing and withdrawing funds in the trading account.

A huge collection of trading assets is available for trading like commodities, stocks, indices, cryptocurrencies, metals, and many more.

It works on the most reliable MetaTrader4 trading platform and offers mobile, desktop, and web trading.

The broker is protected by Secure Sockets Layer (SSL) and all your data is encrypted with it.

Several sources of information and educational materials are available such as daily news, courses, tutorials, eBooks, trading signals, and others.

ABInvesting ; Hub Investments Ltd. is the operating company of ABInvesting, which is regulated by Mauritius Financial Services Commission Authority (FSC). The features offered by this broker makes it a leading broker of the financial market, which are:

Traders do not have to pay any commission on the trades carried on with ABInvesting.

It has three accounts that are silver, gold, and platinum with leverage of 1:200, 1:400, and 1:500, which is also the highest leverage.

Traders can also practise trading with a demo account with this broker and it does not involve any deposits.

For depositing or withdrawing funds, you can choose among a wide variety of options provided by the broker.

Traders can start trading cryptocurrencies, stocks, metals, indices, commodities, and many more with this broker.

ABInvesting uses MetaTrader4 and offers WebTrader, Mobile App, and Desktop trading platforms.

This broker offers (SSL) Secure Sockets Layer protection and firewalls to protect your valuable data.

Educational material and information sources are offered by the broker in the form of news, trading courses, trading signals, VODs, and many more.

The Bottom Line

Both types of forex brokers are operating in the market that are regulated and unregulated. You have to choose the best broker after studying and comparing several factors that are common in every forex broker.

If you will select a regulated broker your money will be safer as compared to an unregulated broker. Some of the leading forex brokers are mentioned in this article and a detailed overview of them is given. So, it is recommended to choose a trusted broker and earn great returns.