Here is what this means for the retail Forex trader:
Forex is a market that is massive and highly complex with several levels of access. Retail Forex traders are on the outside with limited access to the real Forex market. Retail Forex traders are trading against their brokers rather than in the general Forex market. The impact that will be felt is from the broker fills for Forex Retail Traders. Many brokers will be required to meet the new regulations for Forex trading and clearinghouse rules.
The disruption of the Forex market from confusion, changes to structure, defining parameters of what must be cleared, how this will change the business models for institutions, and how long it will take to fully integrate the new regulations and clearinghouse rules are factors that retail traders must not ignore. While on the surface things may seem the same, the underlying hidden activity that retail traders do not see may cause problems for retail that they are not expecting.
Forex trading may become more volatile. Certainly Forex options and ETFs based on foreign exchange pairs will increase with more and more activity in these two exchange platforms.
All retail Forex traders should do as the institutions are doing which is to check out alternative instruments to trade Forex, such as Forex Options or ETFs based on pairs. With the lower risk aspects of Options trading, many Forex traders may find that their profitability rises as their risk drops.
Options Forex trading is a solution for the institutions at a time when the Forex market is facing massive disruptive changes. Retail Forex traders need to also investigate all of the different ways they can trade Forex.
Get started Trading and Investing at my website here http://www.technitrader.com Martha Stokes, CMT Chartered Market Technician and CEO of TechniTrader "The Gold Standard in Stock Market Education" learn How To Trade and Invest For Consistent Success (c)copyright 2014 Decisions Unlimited, Inc. dba TechniTrader also a registered trademark
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