It’s no secret that forex trading is one of the most popular ways to make money online today. Over-the-counter forex markets across the globe run 24/7, and their natural lack of boundaries makes for seamless access wherever you are.
However, if you’re in the US, you may have noticed that most forex brokers offering services worldwide are not available in the country. So, why are forex brokers evading the US market? Let’s find out:
Is it Legal to Trade Forex in the US?
Trading forex in the US is legal, just as it is in many countries. However, the forex market in the US is highly regulated by the National Futures Association (NFA), the body that’s mandated to license eligible forex brokers.
For instance, the NFA requires brokers to have a minimum capital of 20 million to obtain operating licenses, which is staggering compared to the minimum of $100,000 – $500,000 that’s required for a European license. This explains why most forex brokers prefer to set up shop outside the US.
How to Trade Forex in the US?
Despite fewer forex brokers in the US, it’s still possible to trade forex locally. Here’s what you need to do:
Connect Your Trading Device to the Internet
To start trading forex, you’ll need a device to run the trading platform on. This can be your laptop, tablet or smartphone. Make sure your device is hooked to a reliable internet connection before you start trading, as any network disruption can lead to losses if the market suddenly shifts against your trade.
Choose a Reliable Forex Broker
Even though the barrier of entry into the forex market for brokers is pretty high in the US, there are still plenty of forex brokers that accept American traders. When selecting a forex broker, you should first check whether it is licensed to operate in the US and regulated by the NFA or the Commodities Futures Trading Commission (CFTC)
Create and Fund a Trading Account
Once you’ve decided on a forex broker, the next step is to open and fund your trading account. Fortunately, most forex brokers offer different payment options for funding traders’ accounts. These include bank transfers, debit card payments, and electronic money transfers via platforms like Skrill and Paypal.
Download and Install a Trading Platform
You’ll need to download an online trading platform that’s supported by your broker. However, if yours doesn’t, you can opt for a supported third-party trading platform like Ninja Trader or MetaTrader 4 and 5.
Once you’re set up with all the aforementioned requisites, you can immediately start trading using the funds available in your account. Most trading platforms also have demo features that allow you to trade with virtual money to get the hang of the process before you start trading with real money.
While the US forex market is heavily regulated – which results in fewer brokers compared to other countries – it’s still possible to venture into forex as a US resident if you find a reliable broker. Follow the tips above to start trading forex locally today.