The condition that exists when this article was written was local broking companies only provide trading facilities to Regular/Standard contracts (where 1 lot = 100.00 or 10 times of the mini contract), and foreign brokers better legal and illegal promotion is still active. And since this article is about the legality of a Foreign Broker then we will focus on the topic of the legality of a Foreign brokerage firm.
Things to note are the Forex brokerage companies abroad are mushrooming and looks very aggressive with provides many benefits and often bonuses, among others
1. very low Minimum deposit
2. Bonus $ If the margin is a deposit made
3. FREE commission
4. low Spreads
5. easy funds transfer Mechanism, via Credit Card, BCA, Liberty Reserve, e-Gold
Well all the advantages of the above sounds interesting and very lucrative for prospective investors, but there are a few things that really ought to be wary of
The initial deposit is very low, it is generally regulated by a supervisory minimum initial deposit that brokers must reach a certain amount, this is done because the forex trading is a high risk investment so that regulators and supervisory bodies generally specify a certain boundaries because forex trading is not suitable for everyone, especially for those who have very limited funds, the goal is to protect clients also
Margin bonus $ ... So if make a deposit margin of $....., it is similar to the prkatik when this article was written was rife in Indonesia, such as cashback or bonus program from the bank if deposit some money in fixed deposit/savings with terms should not be withdrawn for a period of time then you can get direct gifts of cash, mobile phones, Blackberry, notebooks to the car. The Bank was able to do so because the actual funds used to provide prizes/cashback is through the calculation of interest will be received in the future. But how to forex brokers? Regulatory bodies in favour of investors generally govern the way brokerage firms and prohibit the promotion practices of excessive and misleading promotions. Because of the high risk of forex trading, then the promotion in this way is not allowed because it can affect the potential investors who still lay to immediately open a Real Account, but potential investors should understand the risks involved and the mechanism of the first forex Trading. Furthermore we have to worry about is if a broker gives you some money when you do a certain value deposti whereas they do not charge a Commission/transaction fee and if the spread is very low, the question is how they can bear these costs?
The mechanism of transfer of funds that is easy, via Credit Card, BCA, Liberty Reserve, e-Gold. Generally the broker under the official regulators allowed only conduct transactions through the payment method that is legal and clearly its existence such as Credit cards and International Wire transfers while alternative payment methods such as Liberty Reserve, e-Gold is not permitted because it is not an official alias is not a method of payment is regulated. If the bank or Credit Card, then under the supervision of Bank Indonesia as the central bank or the FED (US). However, for alternative payment methods that do not have a regulator who oversees their operational practices so that if at any time they close or cheating then there is no control.
Modus Operandi
So what if I'm trading with a broker of illegal, so there are different from her ' real '? This question often arises from traders who are trading in illegal brokers, there are some modus operandi generally occur at illegal brokers, because they are not under the supervision of an official regulatory agencies the following things can happen at any time
1. Pembandaran: the trader's transactions is opposed to brokerage firm itself, if you profit and loss, brokerage firm if you loss the brokerage firm profit. Now the problem is if you keep ongoing brokerage firms profit and loss, no company made for continuous loss and here have become like bookies, where the transaction occurs only between you and all brokerage firms, not by the market.
2. Funds cannot be withdrawn: due to the above conditions then we will find that when the profit, the funds cannot be hard//was compounded for drawn because the transaction was not transmitted to the market so that the payment of profit should be taken from the pockets of a brokerage firm. Will generally appear for various reasons that the core fund of profit is hard drawn or they just silence the only request or your complaint.
3. the anomaly/Weirdness on the trading Platform: when good market system suddenly freeze, the order for the taking of profit cannot enter, and various other creativity to obstruct You get the profit. But the special moment for the market crowded/hectic especially during the discharge of a news system disorders are reasonable due to the entry of the order transactions that are very much at the same time
4. supervision of the pseudo: pseudo regulator agency listed on the formed by the brokerage firm's own interests instead of the interests of the investor's brokerage firm
The above things are real things that happen if you really find out about the difference between Legal and illegal brokers, we ourselves have often listen to ' vent ' victims who lost funds, transaction profit or non-profit funds not removed can be drawn with a wide variety of reasons, all of which failed to clear the solution plus there is no place for a snitch.
We, in this case educational portal on TDAmeritrade.com as Indonesia also often get many offers to cooperate with various brokerage firms, usually accompanied by various lure of ease and an enticing offer, but after we did a research background, track record and legality, if the results we found that the results are not satisfactory then we reject all the bids.
Tips
Well now how tips to choose a good foreign brokers
1. Select the only registered brokers in the country who have supervisory/regulator set up to interest investors not for the interests of brokers, among others:
- United States
- Australia
- English
2. especially for brokers who are registered in the United States under the supervision of the NFA (National Futures Association) and CFTC (Commodity and Futures Trade Commission), the reason is due to become a member of NFA brokers must have a minimum net capital fund of $ 20 million and if there is a complaint of investors and brokers found guilty could be fined brokers with a nominal amount of $ 100,000, surely it will make those who have funds under the value of such fines is saferbecause the value of the fine, and of course the ultimate goal is to prevent a broker to do the practices that are not true.
3. make sure you know the mechanism to make a complaint to the Board of Trustees
If you have any doubt about the importance in selecting a Foreign Broker who has legalities
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