Forex Regulations Continue to Alter How Markets Function

Regulations can affect the forex markets as businesses that are impacted might need to change their procedures and practices. miFID, EMIR, the Tobin Tax and Dodd-Frank FX are all rules that need to be followed in the forex trading world. These rules continue to alter the way market participants trade and the way firms handle forex traders. There are several steps that a forex broker or dealer would need to undertake to make sure they followed forex regulations.

Monitoring Position Size

Under the MiFID program, government authorities that regulate the forex markets can terminate unusually large trades. Most of these new rules will impact those who are regulated by the European Securities and Market Authority. The reason behind this regulation is to help authorities monitor positions that could generate unwanted volatility in the forex markets that could potentially threaten the entire securities market. The rule has had an impact on the market as forex trading firms have become their-own watchdogs, keeping a close eye on traders who are taking large positions especially ones that could threaten the ability for the market to function properly. Another situation that could arise is that forex firms that are regulated by ESMA might consider restricting the number of transactions a trader takes withing one day to avoid the interference from authorities.

Managing Third-Party Relationships

Regulations now strictly forbid accepting gifts or payments from third parties. Before these regulations from MiFID, an investment advisor or trader was able to accept payments from third parties as part of their normal business practice. These payments or gifts would incent an investment advisor to use a third party, even if the business was unwanted or needed. The regulations have put Forex forms on notice that the relationships that they have with third parties needed to be at arms-length. The goal of this regulation is to make sure that forex firms that are transacting with third parties do not have a conflict of interest when conducting online trading.

Maintaining Records

Assessing derivatives and putting forth an estimate of market structure is forbidden under the Dodd-Frank legislation. Unfortunately, complex structures that use forex markets are important to traders that depend on estimates to conduct transactions. Trade entities now need to be careful in their estimated assessment especially if they are going to be published in any form of written product or given to a media outlet. The reporting requires under the Dodd-Frank regulations in forex swap dealers (mainly banks and investment banks) need to be registered. Their forex records need to be maintained by the company and each transaction needs to have a clear value along with pricing.

The Tobin Tax and the EMIR

This regulation requires that a forex firm taxes every transaction that is entered by a forex trading firm. This has helped to limit the number of transactions and in cases has caused traders to seek other firms in countries that are not regulated by the Tobin Tax. The EMIR regulations require that OTC derivate contracts that must be traded on an electron platform.

The Bottom Line

The upshot is that its important to understand new regulations that will impact your costs, as they might spillover from your forex broker to you. Your broker could be required to participate in many of the new forex regulations to maintain its status under its regulator. Forex regulations that become too large are subject to regulatory scrutiny and could unset the apple-cart.

Why are you trading in Forex? 

When you become an adult, the relaxing time comes to an end. It is the time to get serious about a profession. A profession that will help you make money becomes your main focus. As a result, you choose between the various paths. Forex trading is also a serious profession. So there is no chance of messing around with this business. But most of the traders seem to forget why they are in this business. Because most of the traders have poor performance in their trades. Today we are on the mission to motivate you in improving your trading efficiency. We are going to tell you some of the mantras that can help you in being efficient. Stay tuned and boost your focus on the trading business completely.

The reason for trading

Do you know why you are in the trading business? Your head may be thinking, “What kind of a stupid question is that? Obviously, we are here to make money!” We would rather disagree with you on this. A trader’s aim should not be making money. Instead, it should be achieving precision in his or her work. A trader’s goal should be the expert level. Because in the expert level you won’t have to worry about the return from your trades. If you do your duty (which is trading) properly, your profits will come automatically into your account. So, don’t think about the outcomes. Focus on improving your efficiency in trading. If you become an expert in it, your account will experience consistent profit from the market.

The rookie traders don’t really know why they are trading. They simply think it’s the best way to earn huge money within a short period of time. But just have a look at the experienced traders in the United Kingdom. You will see a whole new perspective of trading. They are placing perfect trades in their online trading account with managed risk. Instead of looking for easy money, they are trying to establish their portfolio as a trader. They kept on learning new things as it helps them to keep pace with the changing market. You need to develop such a personality if you truly wish to become a successful trader. Find your true purpose of trading and you see positive change.

Commitment to your work

It needs concentration to Show good performance in a job. And concentration requires focus. To focus on the job you have to stay committed to it. No matter what happens, you cannot get distracted from your duty.

Because, if you stay focus on something, it will be easier for you to understand. Like when you don’t understand a small portion of a tutorial, you rewind it and try to give a little bit more concentration. And the second attempt helps you making a clear concept. In the case of trading, when you focus properly on your work, you will be able to understand the market clearly. Your analysis will be solid and as a result, your decisions will be accurate. So, to execute good trades and make good profits you need to stay focus.

Proper management

When you are running a business, you have to stay organized. Otherwise, everything will be messy. And messy institution doesn’t stay longer. As trading is considered as a business by many individuals, organizing is important for it too. You have to keep a clean setup and your work should be organized. And when you are trading you have to organize your capital and trades too. Avoid overtrading (too frequent trading) and keep your risk to profit ration minimal. Segment your investment into multiple small parts, if you are a novice. Thus you can prevent yourself from losing too much and keep on trading. You have to survive in the Forex first to be a master trader. If you fall over, then there is no point of your trading career.

Viewpoints on the Forex market differ, how should you look at it

Of course, it is not only Forex market for everything in this world people would have different ideas and viewpoints. Your viewpoints would differ from ours. Your ideas about trading would be totally different from ours. But what you should take note of is Forex is for everyone. If a trade in the United Kingdom is succeeding it doesn’t limit your chances to succeed. If you want to become a notable trader you should focus on it. You shouldn’t think about traders who have already made their way in trading. The biggest problem among naïve traders is they look at other traders and it diminishes their ability to trade the market. There are some people when they look at successful people they tend to consider them as their inspiration and they work hard to become like one of those successful personalities. But there are some other people, who lose their interest and hopes once they see a successful person. So in the same way, the traders in the Forex market have different ways of looking at successful Forex traders. Some traders would consider them as role models whereas some others would consider them as mood-killers. One thing we could mention is viewpoints differ, don’t try to combine them. [Read more…]

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Choosing a Forex Broker

If you’re in the market for a forex broker, it is most likely because you’ve finished your training and are ready to take your first plunge into the market. Finding a reliable broker that you can work well with is your next step. Or maybe you’re an experienced trader and either outgrew your broker or you are just checking who else is out there. Either way, the same rules and guidelines apply. You’ll want to do your due diligence and find the broker that can either get you started or one who can grow with you professionally. [Read more…]

The Many Forms of Modern Trading

It is the 21st century and in this day and age there are a wide number of ways to invest money and one of these, as it always has been is trading, however, in recent times, trading has evolved and thanks to many online services and platforms, one of which is for example, CMC markets, people can now trade much more easily, for example, from the comfort of their very own home and also have a much wider selection in terms of what to trade in and a lot more financial instruments at their disposal, all of which will have varying degrees of associated risk and reward for investment. It has simply never been easier to start trading, due to these new and exciting ways and platforms in which to do so, as well as the vast library of training videos, with helpful tips and tricks to starting trading. This article will look at many of the different ways in which trading can now be done. [Read more…]