Not All Forex Brokers Accept US Traders
The question of which forex brokers accept US traders is one that comes up a lot. The United States is a hotbed of forex trading talent but things are made a little more complicated for them. Yes, a trader from the US can trade forex online, but under current CFTC laws they are permitted to trade with only US regulated brokers. Sometimes finding a forex broker that accepts US traders is hard, as the strict regulatory environment has seen a lot of competition go under or simply move to service the rest of the world.
The Dodd-Frank Act is the most recent federal statute which president Obama signed into law. The first time it become operational was on July 21, 2010. It is a purely financial regulatory reform agenda. The act in itself has implemented new rules to be applied for regulating financial markets such as stocks, futures, options, futures and forex. The Dodd-Frank Act states that for every forex broker that wants to offer trading service to US citizens must be registered with the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA).
The limited amount of US forex brokers or forex brokers that accept US clients is most certainly caused by the ridiculously post-GFC regulated environment that requires brokers to deposit a substantial amount of funds, while at the same time decreases the forex broker’s profitability by limiting leverage.
A Battle for US Traders – Forex v Stocks:
For historical and expired romantic reasons, US traders have always been much more drawn to trading stocks rather than trading forex.
This is rather ironic however, as in almost all cases, trading stocks is actually much more expensive for traders than Forex. This is why US forex brokers not only have to compete against each other, against the strict CFTC regulatory environment, but also against stock brokers.