Many people think of the currency market as the province of wheeling and dealing risk seeking swashbucklers. They envision currency traders moving from one conquest to another—throwing caution to the wind. Well there are some of those guys in the market, but they usually don’t last very long. The reality is you make money by devising an investment strategy based on solid fundamental and technical analysis and then tailoring your investments to your specific risk/reward objectives. Choices abound!
The articles below originally appeared in our montly newsletter, The Sovereign Individual and will give you some of the basics. You can learn more about the Currency Market in The Sovereign Individual each month by becoming a member of The Sovereign Society. Click here for details on membership.
More About Investing in Currencies
A Whopping 66% of Forex Brokers Will Close Their Doors This Month: How to Keep Your Forex Account Safe and Protected
By Sean Hyman
The retail forex industry is still in its infancy. It’s only been open to the public since 1998. Many of the largest foreign-exchange firms just opened their doors around 2001.
In the early days, you didn’t need much capital to set up a forex shop and become a forex dealer. However, those days are quickly changing.
Starting this month, U.S. forex dealers will have to meet certain requirements to stay in business. The NFA (National Futures Association) is raising the capital requirements for these U.S.- based firms. According to the new rules, all forex dealers must have US$5 million in “net excess capital” to keep their firms open.
Now, for large forex firms, this won’t be an issue. However, only about 1/3 of the 30 forex dealers in the U.S. are expected to make the cut. In other words, roughly 66% of forex brokers will be forced to close their doors when these rules go into effect later this month.
With these new regulations, many brokers will be scrambling to get more capital on their books so they can remain open. If they can’t meet the newest capital reserves required by their regulators, then they’ll have to close their doors. Many are so small that this will be the case. These new regulatory requirements go into effect Dec. 21st!
So What Can You Do if You Already Have an Account?
1. Check out your broker on this public site to see how much they have in “net excess.” Don’t rely on them to tell you. See for yourself by visiting.
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