The NFA, Corruption, And A World Of Hedging That Thrives

After the inexplicable ruling by the NFA against hedging, it's taken a while for the dust to settle and for everyone to see the new forex landscape. It's not that bad. Indeed, things look good. Hedge trading has actually gotten more attention than it might otherwise have received if the NFA hadn't taken such a ridiculous position as they did in attempting to regulate against it.

There's also now a long list of brokers in the United States who are not only negotiating with the NFA to get the anti-hedging regulation reversed or eliminated, but also allowing hedge trading seamlessly through offices overseas. So, there has been zero interruption for hedge forex trading, which is especially important for my family of FX Power Hedge traders (www.fxpowerhedge.com).

For a brief moment in time, it looked like we were facing disaster. Thankfully, that was a false alarm over a pointless ruling that will (in my opinion) end up merely disappearing into that long list of profoundly stupid things regulatory bodies like the NFA occasionally attempt to impose on free trade in the United States. So stupid and contrary to free enterprise, indeed, that it leads one to speculate on the real motives of the NFA.

Ironically, this again points out that while the United States is a world leader when it comes to capitalism and free trade, the U.S. is also home to some of the most out of control and potentially corrupt regulatory bodies in the world...many of whom cross legislative boundaries with reckless disregard for our rights on a routine basis. This NFA ruling against hedging is just the latest example.

It has made me proud to be an American, however, as I watched our still robust free economy respond to this senseless regulation. Countless brokers in the U.S. continued to allow hedging, and communicated the fact openly with hedge traders such as myself.

I prefer not to list the many brokers who allow hedging in this post only because it changes almost daily. More and more brokers are either changing policies or opening off shore offices to allow hedge trading. Any list I put here today would be outdated in a week.

I'll just offer that if you're looking for a U.S. based forex broker who allows hedging, just Google the topic. You'll get a list from Forex to FXCM and many other very reputable, solid and strong brokers who have a comprehension of the definition of free trade and have worked hard to get around the NFA to allow hedging. They should be applauded, because their efforts and rapid response are nothing less than the true demonstration of capitalism and free enterprise at its best.

What should also be noted is the list of major brokers NOT allowing hedge trading. What is their motive? What is their objection to free trade? Behind the walls of these brokers, in my opinion, are the likely hidden motivations of the NFA. I don't have facts, so I can't offer anything of substance here. But, I believe it's easy to see who opposed hedging, and if you know a little about differences between dealers and brokers...you can figure out what might really have been going on here. It's sad, and betrays potential evidence of possible corruption just like we've seen in so many other institutions in the U.S. recently. Let me put it this way...it wouldn't be a surprise if there was some other motive besides the stated attempt to "protect the consumer". That always sounded really questionable to me.

This is why it's so important to note another fascinating outcome of the turmoil created by the NFA's poor judgment in seeking to ban the long established, ethical and profitable trading practice of hedging in forex. Many of us have finally taken the bold step to move our money out of the U.S. to join foreign brokers.

I have personally moved over to Alpari in the UK. I love them. It's a great company. Their trading platform is great. They're diverse and large enough that I have zero worries about the safety and security of my funds. The same was true of FX Pro, also based in the UK. They were the close second for me, and (frankly) it was a toss up. Literally, I almost flipped a coin between the two. So if you're looking to move your money to a foreign broker, you should also check out FX Pro. I love everything about them. There are, of course, other very strong, reputable brokers in the UK and beyond those borders. What really impressed me is that I didn't have to search long or hard before I was 100% satisfied with my options.

So, bottom line, the NFA regulation against hedging proved only how irrelevant this regulatory body is and how totally free Americans are to trade anywhere in the world. We engage in commerce via the Internet. The "world" of forex literally encompasses the entire globe. We're dealing in the business of trading global currencies, so why should our personal geography impact what we do in any way?

It's wonderfully liberating and exciting to realize this new global reality...or perhaps just have the fact hit home in a very real way. And, again in the most ironic twist, this widespread liberating enlightenment resulted from the NFA in the United States attempting to regulate free trade to the extent of implementing socialist policy on forex traders in the U.S.

So, I suppose I just want to thank the NFA for being so profoundly foolish and clearly mindless when they passed their regulation to ban hedge trading in forex. You opened my eyes and the eyes of countless other profitable hedge traders to the fact that we do not need you, and we do not need to keep our money based in the United States. Indeed, in today's economy with exponentially growing problems resulting from a government out of control, we've found it may be safer to put our money in accounts with truly global brokers overseas. I can tell you I feel much greater peace of mind with my account safely in the hands of a global broker based in the UK.

Could something bad happen? Of course. Anything's possible. I just don't think President Obama is likely to take over my UK broker and start running it himself through some puppet board of bureaucrats who know less about forex trading than the NFA. In the U.S., all bets are off based on recent events.

Is this good for the American economy? No. But, then again, I don't buy stocks on the NASDAQ or NYSE. I've gotten rid of all my rental real estate. All I do is trade forex. And now I'm free from the regulatory dictatorship of misguided organizations like the NFA. I'm free from the growing threat of government takeover, which (clearly) can happen in any industry at any time in the current administration's never ending quest to redistribute wealth.

So, again, I want to thank the NFA. By overstepping your bounds to such egregious extent, you finally made all of us see how totally irrelevant you are in every way. You woke many of us up to the opportunities for enduring free trade overseas. It's a sad day for America because the real shift of wealth of overseas, but it's liberating for forex hedge traders.