Forex Trading System

ndividual Retail speculative traders constitute a growing segment of this market with the advent ofretail forex platforms, both in size and importance. Currently, they participate indirectly throughbrokers or banks. Retail brokers, while largely controlled and regulated in the USA by the CFTC andNFA have in the past been subjected to periodic foreign exchange scams. To deal with the issue, the NFA and CFTC began (as of 2009) imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller and perhaps questionable brokers are now gone or have moved to countries outside the US. A number of the forex brokers operate from the UK under FSA regulations where forex trading using margin is part of the wider over-the-counter derivatives trading industry that includes CFDs and financial spread betting.

There are two main types of retail FX brokers offering the opportunity for speculative currency trading:brokers and dealers or market makers. Brokers serve as an agent of the customer in the broader FX market, by seeking the best price in the market for a retail order and dealing on behalf of the retail customer. They charge a commission or mark-up in addition to the price obtained in the market.Dealers or market makers, by contrast, typically act as principal in the transaction versus the retail customer, and quote a price they are willing to deal at.