What are the misconceptions investors have about foreign exchange platforms?

Facing the increasing number ofForex PlatformHow can investors quickly and easily determine the formality of the platform? What are the misunderstandings?

Investors have several misconceptions about foreign exchange platforms

1A license does not equal a regular platform

This is the biggest misunderstanding, because the license is divided into (ranked by degree) invalid license (directly fake or empty license), deck (using someone else's license), beyond the scope of operation (rubbing the edge, some just sell insurance, financial consulting) and non-full authority license (this is actually a half valid license, but it is still not easy to use. The main difference is that "cannot hold customer funds", which is a professional term, don't worry about the literal meaning). Therefore, a valid full license must be considered a regular foreign exchange trading platform.

2Market makers do not mean irregular

The market maker license is actually the oldest and largest among all foreign exchange platforms. This license has different requirements according to various regulatory agencies. Generally speaking, the market maker license means: you are qualified to become a market maker. For example, banks can give you loans, and small loan companies can also give you loans, but the level of banks is different. Although banks can have various financial means, such as printing money, they are the largest. I don't know if this metaphor is appropriate.

However, the nature of market makers was to gamble with customers. However, if they gambled maliciously, they might be fined by the regulatory authorities, and the fines were extremely high. Therefore, market makers generally had a good reputation.

Except for domestic market makers, there is no regulatory agency in China, and many market makers who conduct business in China do not have market maker licenses at all, so they are black money.

Under the market maker license is the common "broker" English Broker, which is the most common. Generally, the retail foreign exchange trading platforms you can see are all brokers. If you want to use an analogy, it is a regular bank loan, but it is more like a bank's loan department or business manager to provide you with services.

3Domesticaccount openingIt is different from opening an account overseas.

What's the difference? Foreign companies use the FCA license, but domestic companies may use the ASIC license, but in general, it is not a deck or a fake, but the account-related processing is slightly different, more to better correspond to domestic special policies.