Written by Patricia Tunstall
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Investing is hardly on the same scale as spending $200 on an electronics item for the home. For one thing, investing requires larger funds. Also, if the $200 item doesn't work, it can be fixed under the warranty that comes with it. There is no such safety net for investments, yet many consumers spend more time researching the electronics item than they do speculative enterprises. The Commodities Futures Trading Commission (CFTC) notes that investors, generally, do not understand that trading on margin means they are responsible for the loss of funds far beyond the specific amount they deposited.

Self-education is the key to maintaining profitable investments. There are many resources, frequently online, that can offer information from glossaries to legal requirements for forex brokers. Federal government websites are available to provide not only the text of applicable laws, but interpretations that are helpful to novice and experienced money managers alike.

Investigate Brokers

Not many people would willingly hand over $500,000, or even $5,000, to a stranger. Many investors do just that when they entrust their funds to a broker or firm they have not investigated. Although the spot forex market itself is not regulated on a global basis, the brokers and firms making offers to the general public are regulated in the United States.

Consult the website of the CFTC for registration requirements for these brokers and firms. Better yet, make sure that the money managers you are considering for your investments are actually registered with the CFTC. Such registration at least indicates a significant degree of legitimacy. Do your homework. Investing is a risk, but it need not be a foolish one.

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