FOREX Lax Oversight

Risks in the retail FX market are enhanced by a lack of regulation. Unlike the stock and futures exchanges, where the exchange guarantees the transactions of its members, in the over-the-counter, off-exchange retail currency market, there is such no clearinghouse. The Commodities Futures Trading Commission and the National Futures Association police currency trading to a degree, but they are both independent agencies, so FX firms are not bound by their rules.

The FX market's decentralized structure came into focus last December, when the NFA raised its capital requirements for retail brokerages to $5 million. The move was aimed to weed out companies without enough cash reserves to guarantee customer funds in the case of bankruptcy, trading losses, or fraud. Firms without the minimum net capital can still do business, but undercapitalization can hurt their chances to attract new customers because they're not vetted members of the NFA.

On the Web, where Forex platforms aimed at retail traders flourish, it is often difficult to distinguish between regulated and unregulated FX firms. According to the NFA Web site, there are about 2,000 retail FX brokerages and solicitors of accounts that are not subject to the new rules. In contrast, the NFA has only 24 registered member firms.

With so much uncertainty out there, traders should be skeptical of claims that they will make a profit regardless of whether the market goes up or down, or promises they can recover any losses.
"We've all seen the Web sites that promise you can make $15,000 a week trading with them," says Chris Palmer, a marine biologist from Panama City Beach, Fl. Palmer used to trade with FXDD, an unregulated trading platform, and although he says he never experienced any problems he felt anxious to switch to a regulated dealer.

"But remember, unlike on the stock market, where it hurts when a stock in your portfolio goes down in value and the whole market is hurting with you, in FX if a trade goes against you, the money comes out of your account only."

[ForexGen Money Manager]

An individual who is responsible for the entire financial portfolio of another individual or another entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client.

Benefits of being a Money Manager with [ForexGen]:

* Providing three different commission sources.
* Weekly commission plan.
* Easy & fast commission withdrawals.
* Fixed percentage of the profits.
* P = k * D “P=Profit, k=Variable Parameter, D=Deposits”

The money manager gets a fixed percentage of the profit previously agreed upon with the client for managing the client funds as a bonus feature.

The most competitive trading conditions:

* 2 pips spread on six currency pairs.
* Providing online trading services without maintenance margin, margin call and no automatic closing of positions below the initial margin on weekdays for accounts with initial equity of up to $1 million US. The margin level have to be recognized Fridays at 23:00 CET and before public holidays.
* Leverages up to 1:200 for accounts up to $1 million US.
* Liquidity and 24/5 availability are the characteristic factors of the Forex market compared with other financial markets.