USA

• 22 Marzo 2021
• by: Lpfcmdst1959 
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USA Forex Brokers

The strict regulations on the financial industry in the US have driven off many brokerages in the past decade. As a result, only a handful of firms are now working with US-based clients. Of course, the foreign exchange market remains just as attractive to traders as always – more than $5 trillion are traded on average every single day.

US Forex Legislation

Many less experienced, nonprofessional traders today believe that trading on the foreign exchange market is banned in the United States of America. But this could not be farther from the truth – access to the Forex market is not prohibited in any way. On the contrary, traders can easily buy and sell foreign currencies without having to comply with any restrictions, except for the regular taxation rules that apply to practically everyone in the country. However, the operations of Forex brokers are heavily monitored and strictly regulated by US authorities.

In order to provide trading services to US-based clients, Forex brokers need to be properly registered and licensed in the country. This may sound quite reasonable – after all, all brokers in Europe, for instance, also apply for licenses from their respective regulatory or licensing authorities. In the US, however, the capital requirements are so high that only a handful of firms can afford to operate legally. These rules were introduced in 2010 with the Dodd-Frank Act, which targets practically the entire financial services industry in the country.

Proposed by the President Obama administration in 2009, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted as a US federal law by the U.S. Congress in 2010. It aimed at reforming the financial regulatory system in the aftermath of the financial crisis of 2007–2008. The law is considered to be the largest and most comprehensive overhaul of the financial regulatory system since the reforms that followed the Great Depression in the 1930s. It is a complex piece of legislation and includes 16 major areas of reform, one of which is the trade of foreign currencies.

The Dodd-Frank Act lists the main body of rules governing Forex trading. Some of the limits and restrictions include the cap on leverage – it is 50:1 for major Forex pairs and 20:1 when trading exotic pairs. The current rules also restrict hedging – a trading strategy, with which traders open two trades on the same currency pair simultaneously to help reduce the losses from a losing trade. Instead, the so-called First-in-First-out (FIFO) model is applied.

Another requirement, quite unique for the US, is that residents need to file tax returns – 60% of the profits are deemed capital gains and taxed at 15%. The other 40% of the profits may be taxed, depending on the trader’s income bracket.

Last, but not least, the capital requirements for Forex brokers have scared off most firms following the enactment of the Dodd-Frank Act. According to them, brokers need to obtain an operating license and have a security deposit in the amount of $20 million. In comparison, brokers in Europe are required to own capital of $100,000 to $500,000. Clearly, the difference is huge and as a result of the tough requirements, most brokers simply chose to exit the US market after 2010.

US Financial Regulators

The Dodd-Frank Act introduced several new regulatory bodies, each having jurisdiction over a specific sector in the financial services industry. There are two main institutions responsible for the supervision and regulation of the foreign exchange market in the US right now, namely the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).

All brokers who intend to offer Forex trading to US-based clients are required to register with the CFTC and become Members of NFA. The CFTC is an independent agency of the US government established in 1974. It regulates the US derivatives markets, including futures, swaps, and certain kinds of options. The NFA, on the other hand, is a self-regulatory organization under the CFTC and it monitors the trade of Forex pairs, among others.

Another influential agency, the Securities Exchange Commission (SEC), does not have authority over the forex market, however, because Forex pairs are not considered securities. Additionally, some brokers in the US are regulated by the Financial Industry Regulatory Authority, Inc. (FINRA), which is a private corporation that acts as a self-regulatory organization.

US Forex Payment Methods

Forex traders in the US can benefit greatly from the fact that they can register their online trading accounts in their national currency, i.e. the US dollar (USD or $) without having to pay additional currency conversion fees. Practically all Forex brokers in the US, as well as most brokers around the world, process payments in USD.

In addition, all brokerages operating in the country accept credit cards, which are the single most popular payment method in the US. According to statistical data for the past few years, around 78% of all online payments in the country have been made via a credit card, followed by e-wallets at 18%, prepaid cards (2%), mobile payment services (1%), and bank transfer (1%). The most widely used credit card brands are Visa, Mastercard, American Express (Amex), Discover, and Diners Club International.

Of course, all reputable Forex brokers on the web would offer at least one or two types of credit cards – usually, Mastercard and Visa. Deposits through these cards are straightforward, almost instant, and very secure. They rarely come with any fees. Withdrawing profits to a credit or debit card, however, may cost you some percentage of the transferred amount (up to 4%-5%). These transactions may take up to 3 or 4 business days to complete.

Many traders prefer alternative payment methods such as digital wallets and the most popular e-wallet in the United States is PayPal. It can be used for deposits and withdrawals on the websites of most Forex brokers – transactions are instant, perfectly secure and affordable. Another e-wallet that can be used in the US is Skrill, London-based e-commerce and money-transfer business. In addition, US-based traders can also opt for more traditional payment methods such as ACH electronic transfers, wire transfer, and checks.

Popular Trading Software in the USA

US-based Forex traders should consider more than a few things when choosing a suitable online broker. First of all, the firm should offer Forex trading, low spreads and good pricing overall, convenient payment options, as well as a fast, reliable software platform. The choice of software is essential since the software platform is what facilitates the actual trading on the foreign exchange market. After all, Forex is decentralized and trading does not occur on one specific exchange – rather, it occurs on a global, interconnected network of computers and trading platforms.

Some of the largest Forex brokers right now offer their clients access to proprietary software. Such platforms were designed for the specific types of trading offered by a particular broker. They often come with state-of-the-art features and complex trading tools for professional traders. Additionally, some proprietary platforms offer access to professional analysis of the markets, predictions, etc.

However, all online brokers also offer their clients to use third-party software solutions. Such platforms can be used by traders for free as long as they register an account with a broker. Probably the most popular one is MetaTrader 4/MetaTrader 5, a type of software developed by the Russian company MetaQuotes Software. Its first platform, MT4, was released in 2005 as a dedicated Forex retail trading system for traders of varied nationalities, knowledge and experience levels. Just a few years later, the developer released MT4, a system that focused on CFD, futures, and stocks trading.

While the two platforms are similar in appearance, they have very different functions – MT5 is considered to be a multi-asset trading platform that is faster and more efficient than MT4. Also, while MT4 is suitable for Forex trading only, MT5 offers access to both centralized and non-centralized financial markets. Other quite popular software platforms are cTrader, NinjaTrader, TradingView, and more.

United Kingdom

• 22 Marzo 2021
• by: Lpfcmdst1959 
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UK Forex Brokers

The London Stock Exchange is also the place where the Financial Times Stock Exchange 100 Index (FTSE 100) is traded. Informally known among locals as the Footsie, the index comprises a hundred of the largest companies in the UK, including Tesco, HSBC Holdings, BP, Barclays, and British American Tobacco.

The country has always enjoyed a stable, independent, and well-developed economy that served as one of the main catalysts of the Industrial Revolution, a process which began in the UK in the 18th century before it spread to other parts of the Old Continent.

Considering all this, it is only understandable that the UK has one of the most prominent Forex trading markets in the world. According to the Bank for International Settlements (BIS), the London share of daily trading volumes increased from 37% in 2016 to 43% in 2019.

Forex traders from the country get to enjoy a strictly regulated trading market, having a broad range of locally licensed brokerage firms to choose from. UK brokers have always been known for their high-quality trading products, transparency, and reputability. All participants in the market must abide by the uncompromising rules and regulations laid out by the local financial watchdog, the Financial Conduct Authority.

UK Forex Legislation

The foreign exchange trading industry in the UK is regulated by the Financial Conduct Authority (FCA) under the Financial Services Act of 2012. This piece of legislation effectively created a new regulatory framework that governs all financial services in the country.

Forex brokers looking to operate in the UK must first acquire the necessary license from the local watchdog. There are three types of licenses, starting with the Dealer License granted to the so-called “market makers”.

The Intermediary License restricts the brokerages’ activities to the Straight-Through-Processing (STP) of traders’ orders. Finally, there is the Restricted Broker License. It authorizes brokers to sell and market their products to UK residents but denies them the right to hold the funds of customers.

The first two types, the Dealer and the Intermediary License, also enable the brokerages to sell contracts for difference (CFDs) for currency pairs, commodities like gold and silver, shares and futures to retail and professional traders. In contrast, a company with a Restricted License is only permitted to introduce customers to firms with Dealer and Intermediary licenses.

Brokerages must meet specific minimum capital requirements to obtain FCA licenses. Market makers need a capital of at least €730,000. The requirements for Intermediary Licenses and Restricted Broker Licenses are respectively €125,000 and €50,000.

Licensed companies must have a physical presence in the UK to receive authorization. The must appoint qualified Compliance Officers and Chief Executive Officers based in the country and approved by the local regulator.

UK-licensed trading firms are also obliged to participate in the Financial Services Compensation Scheme (FSCS), which provides for customers in case their brokers go out of business. The scheme aims at strengthening consumers’ confidence in the local financial market. As of April 2019, the compensation limit of the FSCS was raised from the previous £50,000 to £85,000 per person.

Many uncertainties surround the local foreign exchange market now that the UK is about to withdraw from the European Union (EU). For the time being, however, the Markets in Financial Instruments Directive (MiFID) still applies in the country. Many of the MiFID regulations would probably remain in force after Brexit officially becomes a fact.

Under one of the provisions of the MiFID, licensed UK brokers must segregate customers’ funds from their own capital. This ensures brokers never use traders’ money to cover their operational expenses.

The companies are strictly prohibited from resorting to manipulative practices to attract customers. Also, they cannot enter into positions against their traders or provide them with financial advice, especially when it comes to high-risk trading decisions.

Some of the regulatory requirements concern the sale, distribution and marketing of CFDs to retail clients. All providers of leveraged derivatives on the local market must publish compulsory risk disclosure disclaimers to inform prospective customers what percentage of retail traders lose their money due to leverage.

Speaking of leverage, there are curbs on this, too. The UK adopted the caps for retail customers proposed by the EU regulator, the European Securities and Markets Authority (ESMA). The changes came into effect at the beginning of August 2019. The caps vary depending on the traded assets’ volatility.

Thus, leverage is limited to 30:1 for major Forex pairs, 20:1 for gold, major indices, minor and exotic pairs, 10:1 for all other commodities and non-major indices, 5:1 for individual equities, and 2:1 for cryptocurrencies. Provided that a trader’s position drops under 50% of the margin needed to maintain it open, the broker must instantly close the position down to prevent the customer from losing too much money.

While we are on the subject of derivatives, it is worthwhile mentioning the UK regulator permanently outlawed the distribution, sale, and advertising of binary options to retail customers in April 2019. These are highly volatile speculative instruments that can lead to significant financial losses when in the hands of incompetent retail investors.

UK Financial Regulators

UK’s watchdog, the Financial Conduct Authority (FCA), easily wins the race for the harshest financial regulator in the world. The FCA came to be after the passing of the 2012 Financial Services Act, which abolished the previous financial regulator, the Financial Services Authority (FSA).

The new regulatory body functions independently of the country’s government and is funded by the fees it receives from the market participants it oversees. In this vein, the FCA currently scrutinizes the conduct of approximately 58,000 financial companies in the country. These firms employ over 2 million individuals and pour more than £65 billion into the local economy in the form of tax revenue.

The regulatory entity is mandated with considerable powers. It has the capacity of freezing the assets of persons and organizations while they are investigated for violations. The FCA requires brokers to process their customers’ withdrawal requests instantly as well as to provide annual audit reports regarding their operations.

The quasi-independent regulator the Prudential Regulation Authority (PRA) is mandated with the regulation and oversight of local banks, credit unions, insurance companies, and large investment firms. The entity promotes the safety and stability of the companies it oversees and ensures an adequate degree of protection for policyholders (in the context of insurance firms).

UK Forex Payment Methods

It is fair to say UK traders have a wealth of options when it comes to funding their live Forex accounts. The results of a 2019 survey conducted by the German statistics portal Statista indicate that nearly half of the surveyed Brits have used their PayPal accounts when paying for online purchases.

Indeed, this digital wallet is broadly available across authorized Forex brokers in the country. PayPal is a reliable online payment service that enables registered users to transfer and store money to the balance of their e-wallet accounts. Payments with PayPal are fully anonymous and very time-efficient.

When initiating a deposit, the trader is redirected to the PayPal system where they access their account with their wallet log-in credentials. This prevents payees from disclosing any sensitive information, such as credit card or bank account numbers.

Yet, PayPal is not the only such wallet available to UK customers. Brokers frequently offer it in parallel with other similar payment services such as Skrill, WebMoney, and Neteller. All three operate on the same principle as PayPal, i.e. they require you to register and top up the balance of your e-wallet.

The best brokers on the local market also facilitate quick and secure deposits via credit and debit cards, which rank as UK’s second most widely used payment method. British traders should feel free to use cards by commonly available brands such as Maestro, Mastercard, Visa, Discover, Diners Club International, and American Express.

As for the minimum deposit with cards, the exact amount varies between brokerages but starts at £10 in many cases. Many UK-regulated brokers lift the extra charges for customers who pay with cards. However, additional fees may potentially be charged by the bank provided that it treats the transfer as a cash transaction. The minimum processing timeframe for card deposits ranges from several hours to one business day.

Another widely offered alternative is the bank transfer. This option is preferred by many large-scale traders because there are usually no restrictions on minimum and maximum transactions. Domestic bank transfer deposits require approximately one to three working days to complete. The waiting time for international transfers typically extends to five working days.

When registering with a UK broker, Forex traders are recommended to choose the local GBP as the base currency of their accounts. This would prevent them from paying extra fees for the process of currency conversion. Luckily, all good UK brokers support the GBP as a base currency, along with the other two common options, the USD and the EUR.

Popular Trading Software in the UK

Apart from the legalities and regulations, another key factor UK traders must carefully consider is what software their broker of interest uses. The best trading providers on the British market offer their customers a selection of multiple platforms, catering to all members of the local Forex community.

The software is normally available in the form of a desktop application, a browser-based platform or dedicated mobile applications. Some companies choose to develop proprietary trading platforms instead of using software created by third parties.

With that said, a significant percentage of FCA-regulated brokers still stick to the MetaTrader 4 (MT4) and the MetaTrader 5 (MT5) platforms. Developed by MetaQuotes, MT4 and MT5 are highly regarded for their ease of use and a wide range of helpful tools for analysis and risk management.

For example, traders can minimize damages by setting Stop Loss orders when the prices make an adverse movement. There are technical indicators users can implement to detect notable patterns in the price movements of different asset classes including stocks and currency pairs.

Armed with this knowledge, traders can assume future price fluctuations and change their trading strategies accordingly. Other great features of the MetaQuotes software include timeframes from one minute to one month, dozens of graphical objects, and three main chart types.

Some UK-licensed brokers use the platforms of ZuluTrade, Sirix, and cTrader but their number pales in comparison to those who run on MT4 and MT5. The main appeal of these three platforms is that they support copy trading. This is particularly beneficial for small-scale retail customers who are new to the Forex scene. The feature enables them to follow successful traders and copy their positions into their own portfolios.

Germany

• 22 Marzo 2021
• by: Lpfcmdst1959 
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Germany Forex Trading Brokers

London may be Europe’s most important financial hub, but on the continent, Frankfurt acts as the European financial center. In fact, after the UK, Germany ranks second in Europe in terms of a total number of online Forex traders. It is believed that more than 150,000 people in the country trade on the foreign exchange market. Transactions executed by German traders account for nearly 20% of all Forex transactions in the world.

German Forex Legislation

Germany focuses on creating a business-friendly environment but regulation is essential as it provides fair conditions and security to market participants. The foreign exchange market is liberalized and Germans are allowed to join it without restrictions. Still, the legislation that shapes the Forex market is very strict and it includes a wide range of requirements for brokers who wish to receive German authorization, for instance.

To operate legitimately in Germany, Forex and CFD brokers need to be licensed by the local regulatory body, Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin). Alternatively, they need to be licensed in another jurisdiction as long as it is within the European Economic Area as allowed by the Markets in Financial Instruments Directive 2004/39/EC (MiFID).

BaFin grants authorization only after brokers have met certain conditions. A firm that wishes to offer financial and Forex trading services to German citizens must possess sufficient capital – capital is freely accessible and not received on credit. Financial services institutions that trade in financial instruments on behalf of their clients must have a minimum capital of €125,000. Firms that buy and sell financial instruments for their own accounts are required to hold a minimum amount of €730,000.

Since Germany is a member of the EU, however, it also complies with the legislation set by the European Securities and Markets Authority (ESMA). In 2018, ESMA implemented leverage and marketing restrictions for CFDs and FX. According to the new rules, the maximum leverage allowed when trading major currency pairs is 30:1, while for non-major pairs, it is 20:1. The leverage restrictions for CFDs on equities, cryptocurrencies, commodities, etc., are even lower.

Under the restrictions, bonuses and other incentives to trade CFDs are practically banned. Brokers are also required to implement negative balance protection to prevent their clients from losing more than they originally deposited. Overall, Forex and CFD brokers who want to offer services to German clients prefer to do so remotely – under the MiFID derivative and the EEA agreement, they can operate online without the need to set up offices in the country.
Other important factors that contribute to this fact are the high taxation and strict regulations. Many brokers operate from other jurisdictions in the EEA such as the United Kingdom or Cyprus. This is where Europe’s largest local regulatory bodies are based – they include the Financial Conduct Authority and Cyprus Securities and Exchange Commission, better known as CySEC.

German Financial Regulators

The German financial services sector is regulated by the Deutsche Bundesbank, the central bank in the Federal Republic of Germany. The central bank was responsible for controlling the Deutsche Mark until 2002 when the Euro physically replaced national currencies. At that time, the European Central Bank took responsibility for the currency and the duties of the Deutsche Bundesbank had to be redefined. It now functions as a note-issuing bank, as a clearing house for commercial banks, as a state banker, and as a holder of currency reserves.

In addition, the Bundesbank works in cooperation with the German financial regulatory agency the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) for the regulation of commercial banks. BaFin, which stands for Federal Financial Supervisory Authority in English, is an independent federal institution under the supervision of the Federal Ministry of Finance. This is the main regulatory agency responsible for monitoring and regulation of the Forex brokers and all participants in the financial markets.

BaFin issues licenses to Forex and CFD brokers based in Germany. It also has the right to enforce certain legislative measures designed to prevent financial irregularities and consumer abuse. The agency has introduced several guidelines that require brokers to follow a certain code of conduct and ensure transparent operations and a safe trading platform for investors.

German Forex Payment Methods

Germany has a well-advanced banking industry – in fact, its banking sector is among the largest ones in the world. All major payment methods are available to local traders, including credit cards, online banking services, mobile payment apps, e-wallets, and more. What German traders should look for is a reliable Forex and CFD broker who accepts their preferred payment method and processes deposits and withdrawals in Euro.

Luckily, all major online brokers have implemented the Euro as their base currency, which means that German clients will not have to pay additionally for currency exchange fees every time they load funds into their trading balances. For most traders across Germany, online banking remains the safest way to fund their trading accounts and withdraw the money they have won. Internationally accepted brands such as Visa and Mastercard are available on the websites of most Forex brokers. Deposits through debit/credit cards are instant and usually free of charge. Withdrawing money to these cards, however, takes 3 to 5 business days.

Online banking is also often used for online Forex trading. Services such as Sofortüberweisung, which means “instant bank transfer”, are quite popular among German traders. Sofort, in particular, allows them to instantly move money to and from their bank accounts in a safe and reliable manner. The typical online banking transfer, on the other hand, may be delayed due to the various checks conducted by banking institutions.

According to a recent survey into Germans’ preferred methods of online payment, the vast majority of people pay via invoice, direct debit, or PayPal. In fact, the e-wallet is among the most popular ways to pay online in Germany, with 32 percent of the surveyed saying this is their favorite online payment method. Many of the leading Forex brokers also offer PayPal – transactions are convenient, instant, and secure.

Popular Trading Software in Germany

One of the most important things to look for when searching for Forex brokers is the variety of trading platforms they offer. Some Forex brokers focus on creating proprietary software but the majority of online brokerages offer third-party platforms to facilitate the trading operations. But why is the choice of a trading platform such an essential part of trading?

A software platform is a tool that allows investors to buy and sell financial instruments on the global foreign exchange market. Probably the most important thing is the performance of the platform – the fast, nearly instant execution is essential, especially to day traders and traders on the foreign exchange market where price fluctuations may occur very quickly. It is, then, important to be able to close or open a position whenever you want without delays.

Traders should also take the interface of the platform into consideration – good trading systems come with clear and intuitive design. Beginners should look for a type of software that is easy to use and offers a multi-lingual interface. Actually, many of the trading platforms are available in German, while Forex brokers offer German support, as well.

One of the best options for traders based in Germany is to use MetaTrader 4 or MetaTrader 5. The two platforms are not the same but they were developed by the same company, MetaQuotes Software. They offer demo versions with fully functional demo accounts, access to the foreign exchange market, as well as great professional trading tools and functions – a wide range of technical indicators, market analysis, customization options, auto trading, etc.

While MT4 was intended for Forex trading specifically, MT5 was developed with varied types of trading in mind. It gives traders access to global stock exchanges and all the instruments that are being traded there. Along with these two trading platforms, which are considered the most popular software suits for FX trading, German clients can also use systems that are just as effective and functional, even though not as popular – cTrader, TradeStation, NinjaTrader, ZuluTrade, and many more.

Netherlands

• 22 Marzo 2021
• by: Lpfcmdst1959 
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Netherlands Forex Trading Brokers

The capital is where the Amsterdam Stock Exchange is located. The latter was founded at the beginning of the 17th century, which makes it one of the oldest securities exchanges in the world. In the fall of 2000, it merged with the stock exchanges of Paris and Brussels to create Euronext, the biggest cash equities market on the Old Continent.

The Netherlands is also renowned for its healthy and well-regulated foreign exchange trading scene. Its main partners in trade are other stable economies like France, the United States, the United Kingdom, Belgium, Russia, and Germany.

The country ditched the Dutch guilder for the Euro in 2002. The Forex sector is thriving in the Netherlands, with many brokers being able to service Dutch traders provided they do so in compliance with the rules of the Autoriteit Financiële Markten (AFM).

The Netherlands Forex Legislation

Forex brokers can legally operate in the Netherlands as long as they receive official authorization from the local regulator, the AFM. The Dutch regulatory framework largely overlaps with the requirements outlined by the European Securities and Markets Authority (ESMA).

Licensed brokers must be fully transparent about their operations and provide the local watchdog with regular reports about their trading volumes. They also need to notify the AFM in case their issued capital has fluctuated by more than 1% within three months.

The companies are expected to submit recurring financial statements. This enables the AFM to closely monitor the financial activities of its licensees and make sure they remain compliant with its policies. It also prevents them from indulging in any fraudulent or unfair practices.

Perhaps more importantly, Forex companies looking to provide trading services in the Netherlands must establish local offices and receive the necessary permits before they can start doing business. Under MiFID rules, brokers licensed in other top-tier EU jurisdictions are authorized by the AFM to legally operate in the country.

The companies’ operational capital and their customers’ funds should be stored in segregated accounts. The policy aims at ensuring the safety of clients’ money in the event of a given brokerage declaring insolvency.

These rigorous operational guidelines serve as a major incentive for local Forex traders. They can enjoy high levels of safety along with better trading conditions without having to stress about the risks associated with financial scams and irregularities.

The website of the Dutch regulator contains a very useful registry that enables local traders to verify whether a given firm is authorized before they choose its services. Public notices about malpractices and newsletters are published regularly so that the Dutch public can stay abreast of the latest financial frauds.

The Forex regulatory structure in the Netherlands undergoes routine updates to ensure it upholds the current standards of supervision in Europe. One of the latest changes occurred in 2019 and concerns the regulations that govern retail trading with contracts for difference (CFDs) and binary options.

Effective since April 2019, the new guidelines disallow the advertising, distribution, and sale of binary options to retail traders from the Netherlands. Permanent restrictions were imposed on offering CFDs as well, in line with the prescriptions ESMA issued earlier. The measures apply to companies based in the Netherlands as well as to those that hail from other member states of the European Union.

Brokerage firms that enable Dutch clients to trade CFDs with margin must adopt negative balance protection policies similarly to other EU countries like France and Germany. This measure prevents retail customers who trade with leverage to lose more money than what they have in their available account balance.

Each CFD broker must publish a standardized risk warning on its website to show what percentage of its retail customers lose their money due to leverage. CFD providers are also prohibited from incentivizing new clients with bonuses.

Maximum leverage caps on opening positions are in place to prevent inexperienced investors from suffering significant losses. The exact limit is product-specific and varies based on the respective instrument’s volatility.

The rule of thumb is the riskier the product, the lower its maximum allowed leverage. Respectively, the leverage ceiling is capped at 30:1 for major Forex pairs, 20:1 for minor/exotic pairs, major indices and gold, 10:1 for other commodities, 5:1 for individual equities, and 2:1 for cryptocurrencies.

The Netherlands Financial Regulators

The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten or AFM) is the main overseer of the financial markets and services in the Netherlands. The AFM was set up at the beginning of March 2002 as a replacement for the previous regulator, the Securities Board of the Netherlands.

The legislation that led to the creation of the AFM greatly expanded its scope of supervisory responsibilities. The AFM is now tasked with overseeing a broad range of financial products, including insurance, savings, foreign exchange trading, stock exchanges, and investments. The AFM is an autonomous administrative entity but is still accountable to the Dutch Ministry of Finance.

The Dutch regulator participates in the European Securities and Markets Authority (ESMA). The latter is an independent body whose main purposes are to ensure the stability of the EU financial system, safeguard investors, and promote balanced financial markets. Because of its ESMA membership, the AFM aligns most of its regulatory policies with the guidelines of the EU financial regulator.

There are several important aims the AFM pursues, including promoting confidence in the local markets, assisting traders in dispute resolution, sanctioning violators, and ensuring smooth operations for all marker participants. The AFM operates in conjunction with the central bank of the Netherlands (De Nederlandsche Bank), which is a member of the European System of Central Banks (ESCB).

The Netherlands Forex Payment Methods

It is the norm for Forex brokerages to try and expand their market share by offering their customers multiple account types and a broader choice of payment methods. Most Dutch-friendly companies offer demonstration accounts funded with virtual credits traders can use to practice or test strategies.

Once Dutch customers have gained sufficient experience with the demo, they can open live accounts and fund them so they can invest real money into the Forex markets. Netherlands-friendly brokers offer multiple ways to deposit and withdraw money, including standard wire transfers and credit or debit cards by Visa and Mastercard.

Virtual wallets are also rather common at Dutch-friendly brokerages. Although Skrill and Neteller are widespread, PayPal beats them in terms of popularity – it is the preferred method of payment of more than 1.6 million Dutch residents. No matter which of the three options you choose, you need to undergo registration, verify your account, and fund the balance of your new e-wallet.

Some brokers cater to traders from the Netherlands with locally available payment methods like iDeal. This e-payment system is broadly implemented in the country, allowing users to conduct online money transfers directly from their bank accounts.

To use iDeal, Dutch traders must have accounts with an associated bank and sign up for its online banking services. The iDeal platform is supported by most major banks in the country, including RegioBank, ABN AMRO, Handelsbanken, ASN Bank, Van Lanschot, SNS Bank, ING, bunq, and Knab. Payments are completely secure with iDeal because the transactions are carried out via the respective banks’ online banking platforms.

Two other locally available methods you are likely to see at Netherlands-friendly brokers are Sofort and Trustly, both of which function on the same principles as iDeal, i.e. you need an online banking account at an associated financial institution. Payments carried out with any of the three platforms are safe, time-efficient, and cost-effective.

Before they pick a broker, traders from the Netherlands should check its minimum deposit requirements and lot sizes. These minimums very often depend on the type of live account one registers for.

Micro accounts are more suitable for novices and require a significantly smaller initial investment compared to the premium VIP accounts professionals prefer. We suggest you choose the EUR as your live account’s base currency so you can dodge the additional fees for currency conversion.

Popular Trading Software in the Netherlands

Many brokers operating on the Dutch market are practically the local branches of major trading providers based outside the Netherlands. Because of this, the software local Forex investors encounter most frequently is usually the same, the MetaTrader 4 (MT4).

Courtesy of the Cyprus-based developer MetaQuotes Software, MT4 has established itself as a standard in the Forex trading community. This is the platform of choice of traders all over the world and Dutch investors are not an exception. The MT4 has a simple and user-friendly layout that appeals to novice traders. More experienced users are attracted by the platform’s broad range of tools for market analysis.

Also featured is a customizable chart station that enables users to manually impose graphical objects onto their charts. There is a choice from three chart styles for displaying price movements – Japanese candlesticks, bars, and lines. It is possible to place orders by clicking directly on a chart.

Many brokers to service this region offer MetaTrader 5 (MT5) in parallel with its successor MT4. As a rule of thumb, MT5 is considered more suitable for well-versed traders who want to expand their portfolio with additional instruments like stocks, futures, options, and bonds.

Other common platforms for Dutch traders, albeit not as popular as the ones we previously mentioned, are cTrader, ZuluTrade, and the Sirix WebTrader. Some foreign exchange brokers develop proprietary trading software and offer it to Dutch customers concurrently with the platforms created by third-party companies like MetaQuotes.

Mobile Trading in the Netherlands

Desktop computers begin to gradually give way to mobile devices, which are broadly implemented for a variety of purposes, including online purchases, staying in touch with family and friends via social media platforms, browsing, and gaming. In the Netherlands alone, the number of active smartphone users exceeded 14.9 million people as of 2018.

Furthermore, the monthly smartphone usage is expected to rise in the years to follow reaching 16.6 million individuals by 2024 and penetration rates of over 96%. The Dutch Forex community has also jumped on the mobile bandwagon. An increasing number of investors from the country prefer to execute their orders on smartphones or tablets instead of being chained to their desktop computers.

Luckily, the Dutch cannot complain they lack options where mobile trading is concerned. The majority of brokers on the local market provide mobile access via downloadable apps that work on Android and iOS. The exact features and design of the apps vary between brokers, depending on whether they use propriety or third-party software.

Nevertheless, the apps are beyond useful because they provide Dutch traders with access to the Forex markets and their accounts at any given moment. Investors from the country have a chance to execute orders on the fly, monitor their open positions in real time, and track their portfolios.

The apps of the best Dutch-friendly brokers are inevitably easy to use and perform well across a variety of portable devices. Users can observe price movements in real time, trade a broad range of currency pairs as they go, and manage their portfolios in their native Dutch language.