During the past two years there has been much happening on the forex markets. A lot of brokers came out in the last two years and have now gone back. The forex market has seen some big changes. Do we have to change the way in which we select a forex brokerage firm with whom to open an online account, article source?
All countries are tightening up their markets, enforcing massive regulations on outgoing money. Dodd-Frank in USA came into play back on October 10, 2010. CFTC, which is the US regulator for Forex in the US, issued a bill that imposes restrictions against foreign brokers opening US-based accounts. Forex brokers can no longer open US bank accounts if not registered at CFTC. Given that the minimum amount of capital needed to establish a Forex broker in the United States is $20,000,000, this is no easy task. Japan decided to close their market, and no brokers could open Japanese accounts. Alongside that, regulators set restrictions for leverage. The USA had a limit of 50:1, and Japan a 25:1 ratio. In other words, only big companies can enter the market.
India too decided to regulate their Forex market. However, they have taken even more drastic steps by restricting banks from sending outbound payments if the transfers were for Forex trading. It's not fair! Turkey officially closed their market in recent weeks.
In just a year, two new brokers had been registered daily. Whether they're regulated or unregulated, they only need to own the MT4 system, employ a handful of people in sales, and voila. We now see the reverse. The goal is to increase stability by merging more brokers. ODL was merged with FXCM. In other words, if a few years ago there was a steady increase in the number forex brokers we now see fewer.
A mere two years back, trading was big business. Some brokers offer virtual private host service for traders to host their own trading system. Wir had automated trading system such as Zulutrade, Tradency and Currensee. This is also a case of a downward trend. There is no winning robot, as most of them concluded.
Overall the foreign exchange market is likely to become more difficult.