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Why is not possible to trade forex in usa in 2017?

Forex trading, also known as foreign exchange trading, is a popular form of investment that allows individuals to buy and sell currencies from all over the world. Due to the global nature of the market, forex trading is a 24-hour operation that can be conducted from anywhere in the world with an internet connection. However, despite the popularity of forex trading, it is not possible to trade forex in the USA in 2017. In this article, we will explore the reasons behind this restriction and the alternatives available to US traders.

The main reason why forex trading is not possible in the USA is due to regulatory restrictions. The Commodity Futures Trading Commission (CFTC) is the government agency responsible for regulating the futures and options markets in the USA. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was introduced, which included provisions that required forex brokers to register with the CFTC and comply with rigorous regulatory standards. These regulations were put in place to protect traders from fraud and abuse in the forex market.

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One of the key requirements of the Dodd-Frank Act was the implementation of a maximum leverage ratio of 50:1 for major currency pairs and 20:1 for minor currency pairs. This means that traders can only trade up to 50 times the amount of their account balance on major currency pairs and 20 times the amount of their account balance on minor currency pairs. This is a significant reduction from the previous maximum leverage ratio of 100:1 that was allowed by many forex brokers. The aim of this regulation is to protect traders from excessive risk and potential losses.

Another requirement of the Dodd-Frank Act is the segregation of client funds. Forex brokers are now required to keep client funds separate from their own operating funds. This means that in the event of a broker’s bankruptcy, client funds will be protected and will not be used to pay off creditors. This regulation is designed to protect traders from broker insolvency and fraud.

Despite the benefits of these regulations, they have made it difficult for forex brokers to operate in the USA. The high regulatory costs and requirements have meant that many brokers have chosen not to register with the CFTC, making it impossible for traders to trade forex through these brokers. In addition, the maximum leverage ratio and segregation of client funds have made it less attractive for traders to trade forex in the USA.

So, what are the alternatives available to US traders? One option is to trade forex through overseas brokers who are not subject to the same regulatory restrictions. However, this comes with its own risks, as traders will not be protected by US laws and regulations. Another option is to trade other financial instruments such as stocks, options, and futures, which are regulated by the Securities and Exchange Commission (SEC). These products offer similar opportunities for profit and can be traded through US-based brokers.

In conclusion, forex trading is not possible in the USA in 2017 due to regulatory restrictions imposed by the Dodd-Frank Act. While these regulations are designed to protect traders from fraud and abuse, they have made it difficult for forex brokers to operate in the USA. US traders must explore alternative investment options or trade forex through overseas brokers at their own risk.

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