How Forex Trading Changed in The Last 2 Years

There has been a lot of goings on during the last 2 years on the forex market. We've seen a lot of new brokers coming out and now all of them are going back. Some major changes happened and surely impacted the forex trading all over the world. So is there a change of how we will choose a forex broker to open an account with?

Regulation

All countries are tightening their markets by applying massive regulations against money going out of the country. The first was USA and Dodd-Frank which came into force back in October 2010. The CFTC (the US financial regulator for Forex) issued an act that imposes restrictions towards foreign brokers opening accounts to US citizens. In fact the Forex brokers were no longer allowed to open US accounts unless they are registered with CFTC. It is a difficult task given that the minimum required capital to open a Forex broker is twenty millions US dollars. The next country decided to close its market was Japan and no brokers were allowed to open Japanese accounts. Along with that the regulators imposed restrictions in leverage, hence in USA it was limited to 50:1 and in Japan 25:1. This means only the really big players to have the possibility to join the market.
India also decided to regulate its Forex market but they took even more drastic measures by applying restrictions to banks and not allowing them to execute outbound transfers if those were aimed for forex trading. Ouch, beat that! Turkey also recently officially closed its market, so the list goes on and on.

Forex brokers

Just an years ago there were 2 forex brokers registered per day. Regulated or not, they just needed to buy the MT4 software, have few people as sales staff and that's it. Now we see just the opposite. More brokers merge in order to have more stability. The large ones make no exception - ODL merged with FXCM. So if an year ago we saw a growing number of forex brokers, now the trend is down.

Automated trading

It was a huge business just two years ago. Some brokers started to offer free virtual private hosting service so traders can host their trading systems. We had automated trading systems such as zulutrade, tradency and currensee. Again there is a downtrend here. Most of the people came to the conclusion that there is no ever winning robot and of course this is exactly right.

What else?

All in all we can say that the trading volumes also are less than 2 years ago and overall the forex market is going to be more difficult for everybody.

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