Picking a broker is an incredibly important decision when one begins to trade. The broker itself is the tool that will take your trading system and bring it to the actual trading grounds of the Forex market. Knowing this it is a decision that one should not make with haste.

It is no secret that brokers make money when you trade through them on the currency market. It is only fair. They are providing a service to you that allows you to not worry about having to first half a sizeable amount of wealth to participate in currency trading.

However, in any market, you will find your den of thieves. There are illicit people that are willing to con you into giving them your hard earned money. However, how is one to know a reputable broker from a scam artist? After all, with the internet as the primary means for one to base judgment of a company it is quite easy for a con artist to have a professional looking site.

This is where the National Future Association steps in. The NFA is a self regulatory body that creates the standard for the U.S. futures industry. They continue to create and develop rules and regulations to ensure investor confidence remains high. Membership with the NFA is mandatory for organizations that deal with the public in relation to future exchanges. What this means for the investor is that they should be able to take confidence with any broker that adheres to the rules and regulations of the NFA.

Recently the NFA decided to enact a new policy that becomes effective November 30, 2009. It has been decided that all members of the NFA can offer a max leverage of 100:1 on all major currency pairs and 25:1 on all exotic pairs.

With each new rules there is always those that oppose new regulation. In this instance it will most likely derive from those that utilize high leverage to compensate for their overtrading. In short, the mass majority of such traders are not profitable, yet still have enough of a voice to raise a stink about it.

Personally, I think it is a good call from the NFA. Brokers know that by offering high leverage, it opens the door wide open for traders to place too many positions in the marketplace. The more the trader places positions in the market, the more the broker will make. So in short, the only person who should be upset about such regulation is the broker as this might cut a bit into their profit margins

The NFA is a positive attribute to the Forex market. And it is important to select a broker that adheres to the rules and regulations of the NFA. Now, the NFA is not the only regulatory body in the entire industry. They are only for US based brokers. There are a variety of other countries that offer their own regulation that work to ensure investor confidence. AvaFX is such a company as they are regulated by the Irish Financial Regulator. Have confidence when choosing AvaFX as your broker, as they have been recommended by the FX Trading Network.

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