In contrast to trading stocks, futures or options, currency trading does not occur in regulated exchanges. It is not controlled by central government agencies, there is no clearing house to guarantee the trades and there is no arbitration panel to adjudicate disputes. All members trade with each other under the credit agreement. Basically, business in the largest markets, most liquid market in the world depends on nothing more than a metaphorical handshake.

At first glance, the ad-hoc arrangement must seem confusing to investors who are used to structured exchanges such as NYSE or CME. However, this arrangement works very well in practice: because participants in FX must both compete and cooperate with each other, self regulation provides very effective control over the market. Furthermore, the leading retail FX dealers in the United States to the National Futures Association (NFA), and thus they agree to binding arbitration in the event of a dispute. Therefore, it is essential that every retail customers who are contemplating trading currencies do so only through an NFA member firm.

FOREX.com is a registered Futures Commission Merchant (NFA ID # 0339826) and the division of GAIN Capital Group. A pioneer in online foreign exchange, GAIN Capital Group provides forex trading & asset management to institutional investors and professional money managers in 140 countries.

Where the commission in FOREX?
Investors who trade stocks, futures or options typically use brokers, who act as agents in the transaction. Brokers take orders for the exchange and efforts to implement them according to customer instructions. To provide this service, brokers are paid commission when customers buy and sell instruments that can be traded.

FX market does not have a commission. Unlike exchange-based markets, FX markets are the only actors. Company FX dealers, not brokers. This is an important distinction that all investors must understand. Unlike brokers, dealers assume market risk by serving as a trading partner for investors. They do not charge a commission, but rather, they make their money through the bid-ask spread.

In FX, investors can not try to buy at the bid or sell in such offering in the market-based exchange. On the other hand, when the price of cleaning the cost of deployment, no additional fees or commissions. Each get a single penny is pure profit for investors. However, the fact that traders must always overcome the bid / ask spread makes scalping is much more difficult in FX.