4. Mechanisms and Legality Forex

4. Mechanisms and Legality Forex

Another factor is the issue of legality. Try to imagine in a forex investment. You have to invest forex and generate hundreds of percent profit from your forex trading. Then it was time to withdraw your money. And it turns out the company you invest in the forex company belonging to escape and illegal enterprises. Well up here, the dream ended already enjoying the hundreds of percent profit.

In forex beginners and those who are directly involved in it tend to prefer viewing platforms that served or regulation of trade in favor of the consumer. But I tell you: Platform nice and regulations that favor the consumer does not guarantee your place to invest Brokerage legal!

So read this article well if you do not want to fall into the trap of the Forex Scammer!

Here is a chart of forex trading mechanism:

The mechanism of forex transactions

Just as in a buy-sell trade normally, in any forex trading basically requires both sides of the buyer and seller. But here's the difference, buyers and sellers never do direct physical encounters and never happened handover physically as well. Everything is done in the form of agreements and brokered by the agency arvbitrase commonly referred to as Broker / Broker.

Task Broker / Brokerage Company is to become a kind of collector retail transactions made by investors under it to then be forwarded to the market or exchange. Bursa here is the meeting place between the seller and the buyer in the transaction. Other languages ​​are market. And yes Indonesiakan market if in the same market. So indeed is the market exchange, a meeting place for the Seller and Buyer.

Differences exchanges with the conventional market is the stock exchange does not usually occur in retail sale and purchase transactions of individuals but usually accumulated and then executed.

Well, Suppose an investor, just say the name Amir, see the opportunity that currency GBP (remember, GBP means Great Britain Pound currency or United Kingdom) will strengthen against the US Dollar. Then of course as a good investor and looking for profits he bought GBP appropriate calculation is then stored until ready GBP strengthened and Amir will sell it back.

Say Amir buy as much as 10,000 pounds. In forex 10,000 units commonly called 1 lot. So all transactions are calculated based on the units of this lot. 1 lot, 2 lots, 3 lots, and so on.2 lots yes means currency 20,000 (depending on the currency bought / sold). So in forex transactions, we do not know the purchase of 15,000 pounds, for example because the figures were 1.5 alias odd number of lots. And 1.5 lot is not known in the world of forex.

To make purchases of GBP her, Amir purchase through a brokerage where he invested.Order was made. And bim salabim ... with a single click on its forex platform, Amir just take action to purchase 10,000 British Pounds.

Easy as that. But the question for us layman: What actually happens typing Amir make purchases through forex trading platform?

Well, the answer is within a fraction of a second is indeed basically has occurred Amir account transactions in which he bought 1 lot Pound (do not ask what it is I am again a lot! I already explained above.

Then who sells GBP her to Amir. Well in this case the time a transaction takes place between Amir with a broker. Broker holds all orders placed Amir and colleagues of other investors who invest through the same broker. So for the time a transaction takes place between Amir and brokers.

But as I wrote above, the transaction is for the time being only. Next broker will forward all orders placed by the customer to the institution of higher above which stock exchange or other big banks. Investors need Brokerage Company since investors can not directly access the stock market or the big banks.

Well, the stock is basically like had I mentioned earlier, is the meeting place between the seller and the buyer a big party. The perpetrators are mostly large banks, brokers or other financial institutions as well as the big boys. Regarding the big boys, will be discussed in the module "Expert" and not here.

In exchange all such transactions reunited total lot of buying and selling. Total forex transactions (spot, swap, forward) is actually quite massive: reach 3.8 Trillion US Dollars per day for the entire world. Yes it is enough to finance the state budget Indonesia a few years :).

With a total market of this magnitude, where Amir Brokerage Company can continue to transact orders Amir. So, brokers get what she needed and so is Amir. All that thanks to a mechanism called this Bursa. Meanwhile, from the Amir, he did not bother with the forwarding of orders by the broker firm favorite. He just enough to know that in a split second, orders have been met by Broker and then Amir just waiting for prices to move up in accordance predictions. If the correct price rises, yes Amir will have an advantage. If you find that prices move inversely, yes of course Amir loss. Pity him if loss ...

Well, that's the forex trading mechanism in the everyday world. Bursa here there are many.In Indonesia, trading berjangkan in regulasikan by PT BBJ (Jakarta Futures Exchange).American has the NYBOT, London has the FTSE (pronounced "Footsie") and Japan have the Tokyo Commodity Exchange (TOCOM).

Keep in mind here, the forex market despite the exchanges in various countries, but not just centralized in exchanges such as the stock market. If in stock, say Telkom shares (code TLKM) can only be transacted on the stock that has been where the shares are listed ie on the JSE and the NYSE (great also Telkom could nemplok on the NYSE J), then in the forex market system is not so, the forex market is open market is not closed market like a stock that can only be traded on the stock exchange. Everyone can trade currency, everyone is using the money in the deal. You do the currency exchange with the dollar amount was already included as part of the forex market. Where there is a difference in the exchange rate difference, then that is where speculation and investment occur.

"Up here is clear the children?"

Do I hear the words: "Yes, teacher ...."?

Legality

Now we get into the issue of legality. Something that is often overlooked by the novice forex.

In an investment issue of legality is one that plays a central part. It's known an investment company normally also play a role to collect public funds. This is particularly crucial in the event of fraud or the problems of default by the company to its customers.

Well for that is why we need a regulatory agency of the government that oversees the activities of investment companies like this. Banks have the BI (Bank Indonesia) as a regulator. While the insurance company regulated by the Insurance Directorate under the Ministry of Finance, the securities company has Bappepam as a regulator.

So what about the Forex?

Forex belong to the futures exchanges. Namely investment derivatives (derivatives) from stock investment products and his friends. At first derivative product is preceded by the index and commodity trading. Then grow a new member that is named foreign exchange trading forex.

Ah, it was already explained in previous modules, namely "The structure of investment in Indonesia". Please reread the article.

Because it is no longer classified as investment securities, then the forex trading also has its own regulatory agency joint index and commodity trading which is his twin brother.

Who is it, then?

In Indonesia, the regulator that oversees the activities of the brokers are under the authority Bappebti (Supervisory Board and the Commodity Futures Trading), BBJ (Jakarta Futures Exchange) and IAC (Indonesia Derivatives Clearing). In the United States who are pioneers trading margin trading, is under the regulatory authority of the CFTC (Commodity Futures Trading Commission) and NFA (National Futures Association).

CFTC and NFA can be regarded as a role model for other regulators in each country.Broker regulated under them must follow strict rules and strictly selected anyway. That is why international brokerage firms that are members of the CFTC and NFA are so proud of their membership status.

American law prohibits its citizens to invest in a brokerage company that is not regulated under these two institutions. Even the brokerage firm which is not a member of the CFTC and NFA also banned US citizens open a forex account through them. Yes it's known, superpower. Anything can be done. Cheaters ... How good Indonesian citizens if we get the same protection.

Well, so here I think there was some light for those who are totally blind to the issue of legality. One thing is certain: never open a forex account at a broker that is regulated under government bodies anywhere. PT permit alone is not sufficient to establish a brokerage firm! So do not easily tempted by good platform and regulation that seems profitable customers, but when they only asked permission company argued that the permission is being taken care of or even say they have a permit establishment of the company. Remember, being taken care of means not yet have a license!

In fact, do not immediately believe the sweet promises marketers your brokerage firm.Indeed, the task they deliver what is good. Yes his name is also marketing. If unfavorable ya kept well for himself alone lol ...

Now the question arises, is there any brokerage firm which does not permit regulators mengantogi illegal brokers aliases?

There is.

Many!

Yes a lot. Both brokers and abroad. His name alone is already illegal. So did the initial intention was not to do business but deceiving. Remember, you know, business is not a fraud. There is no fraudulent activity can be sustained. But there is a Chinese proverb which says that the business is classified lasting if he can stand for three generations. I've never heard of a deceptive activities lasting for three generations.

This illegal brokerage companies have many ways to seduce people to invest through them. Yes of course no avail alias investment fraud. Usually they wear the sweet promises by seasoning so impressed sense. Some promise them something like this:

"Get the benefits of up to $ 1,000 in a week"

"We guarantee your investment profit of 30-40% per month"

"However the state of the market either up or down, you still get a profit!"

"We promise to refund any losses that may occur from your investment."

Well, is it too good to be true? Too good to be true? Come learn English a little ...

Even though they do not trust to come with the transaction history they were seen rising from the bottom left to the top right to persuade you invest your funds in the company.

Guess what, I can also make history as it really. Just need a little touch of the computer or with Photoshop and then ... it all magically appeared. We will never know that it's true or not.

Now let I extracted some suspicious signs that you need to be aware of prior to invest your funds in a brokerage firm:

1. Be suspicious of any investment scheme that is too good to believe.

The bad news forex is not a get rich quick scheme. Forex together with other businesses.Requires diligence and hard work of the investors to come forward.

2. Avoid companies that promise huge profits for the funds you invest.

Yes, I have already explained this a bit above. All comments above are issued a broker need you suspect.

3. Avoid companies that promise no risk at all in trading forex through them.

It's the biggest nonsense I ever heard. Bah! Even selling out at no risk of losing any market especially with forex investment? We did not discuss the risks of forex trading here, but think carefully: what business there is no risk? Even crossing the street there is any risk.

For those of you who think investing without risk I say: Do not dream disiang hole! Wake up! If you want to be successful there is no way a substitute for perseverance and hard work. Work hard to determine the investment policy. The hard work of determining the correct timing. Working hard for the analysis of capital and risk management. What these things do not need to think about?

4. Do not carry out margin trading unless you know what that means.

Margin trading is like a magnifying glass. He is useful to increase the chances of your profits. But he also can meperbesar your loss. So, watch out! Again, learn at least the risks in forex before you start investing.

5. Question those who claim that they are trading through the "Interbank Market"

Some brokerage firms claim that they pass on customer transactions through the interbank market so that they can obtain better prices for themselves, so no need to burden customers with transaction fees and other costs.

Interbank Market is usually used by world-class banks for the process of granting and filing of intercompany loan banking institutions. Interbank Market does not involve smaller banks especially brokerage company assets "only" hundreds of millions of dollars. Well, something is exaggerated when a broker named said they had access to the area.

6. Be careful for each process payments via the internet and does not involve the transfer between banks.

Some brokerage firms opened ease of payment via e-gold, pay pall and a myriad of other payment methods. It is not believed, however, customers often forget to look at the information beneficiary (beneficiary) of funds due to payment methods already overdo easy and just click on it and then finished. Once they click they usually just remembered where the funds are transferred or through what and where the recipient's address. Yes it was too late anyway. Many brokerage firms like these are not members of the NFA and CFTC.

7. Usually the illegal brokers menyasarkan campaigns to developing countries or ethnic origin.

Psychologically it is easy to understand. The lack of knowledge of those who are rich in countries such as Indonesia makes fraud action becomes easier (duh ... the fate of the citizens of developing countries so yes this time deh). Well why BelajarForex.com website is made. One of its missions ya be an educational tool for all forex enthusiasts. Arise my people, rise up my land, do not be deceived by anyone, including those who claim to be from overseas. They both eat rice kok (eh wrong ... eat bread), so why think that they are smarter? He ... he ... he really so patriotic like this anyway.

8. Make sure you know the track record of the company you invest.

Well how else track record that speaks. It is a testament to the dedication and the work of the brokerage firm. So it can not be fooled. If they do not even want to tell their track record or background of the company, leave it and look for another place for investment.

9. Find a third opinion from those who have invested there

This is tricky. Some lots are also accomplices of illegal brokers try to convey a positive campaign on the independent forums for mengatrol their position. Smart looking. Again start with the opinion of too good to be true is not true. Suspect those who commented so positively to filter all of the information.

10. Contact your investment advisor before investing

Well, if you are still unsure, contact them more understanding about forex trading and ask you if the security fund to invest in companies that wish to select.

You can also contact BelajarForex.com through info@belajarforex.com to know suggestions from us or which were deemed competent broker to invest. Learn Forex ready to investment advisors do not leave anyone with the principle of customer oriented and balanced information. Yes ... a little promotion lah.

Thanks .. it at length also described above. The more readable it feels more and more confusing. Ha ha ha. If you dizzy, do not forget We opened the opportunity to ask questions through the column contact us. So, do not keep all your confusion alone.