It appears that some people are missing out on the opportunity that Forex trading can provide by believing in the myths that surround it.
One of the myths that surround Forex trading is that it’s illegal in some countries. And just by hearing the word ‘illegal’ is enough for somebody to stay away from it.
In countries that authorize individuals and legal entities to have currencies (currency accounts, and currency at bank exchange offices), Forex Trading is allowed.
It’s Not for Fun
Forex trading is far from gambling. Most people who utilize this kind of trading are managing important transactions. These transactions range from international investments, import and export operations, to making money in changing currency prices.
Financial intermediaries, such as Forex brokers, must have a special license to prove that they are regulated by higher authorities. No one should be hesitant to transact with Forex brokers and dealing centers because they are subject to mandatory certification.
Forex Regulators in the US
There are various Forex regulators in the US that regulate specific areas of Forex transactions. These include the Securities and Exchange Commission (regulates securities), Securities Investor Protection Corporation (provides protection for investors), Commodity Futures Trading Commission (regulates currency market), and the National Futures Association (non-governmental futures association).
Forex Regulators in Other Parts of the World
In Cyprus, it’s the Cyprus Securities and Exchange Commission that oversees the country’s Forex activities. It has all the needed minimum levels to protect its clients. Moreover, even offshore companies use their services.
The Australian Securities and Investments Commission or ASIC is Australia’s main regulating body. Switzerland has the Financial Market Supervisory Authority, while the Financial Conduct Authority or FCA regulates Forex in the UK.
U.S. Allows Forex Trading
So today, let it be clear that you can trade Forex in the U.S. However, the operations of Forex brokers are closely monitored by US regulators. In fact, the requirements needed to provide Forex services in the US market are tight and strict. Additionally, aside from obtaining the required licenses, a broker must have a security deposit of about $20 million.
Islam Countries Also Allow FX Trading
With the strict teachings of Islam, a lot of people believe that Islam countries ban their people to trade Forex. This isn’t true.
Islam countries firmly believe that one should only give to give, and not to get something in return. The Sharia Islamic Law prohibits Muslims from receiving any form of interest. So make all things clear, it’s actually the swap that Islam law prohibits and not Forex trading.
What is Forex Swap?
A Forex swap is a commission or rollover interest brokers charge to their clients when they extend their positions overnight.