Canada, the land of maple syrup, moose, snow, Prime Minister Justin Trudeau and debatably the most polite people in the world. Of course, these are perhaps stereotypes or exaggerations, but one thing that is not exaggerated is the power of the Canadian forex brokers, traders, and its own dollar. With the seven most powerful currencies in the world, in terms of market share volume, the Canadian dollar sits comfortably among them. This is unusual as Canada remains on the low end of the ranking of economically powerful countries on an international scale in terms of GDP. It holds the position as the 10th most powerful economy in the world, coming from countries like Brazil, France, and even India. Nevertheless, because of its volume in the international market, its currency has earned a place among the major currencies, and it is revered by many Forex traders.
Browse below a list of the trusted Canadian Forex brokers.
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In comparison to the forex market in the United States, Canada has a much more relaxed environment for forex traders and brokers, however, it is not to say that there are no restrictions. As Canada is in a unique position as a country with a currency tied strongly to the export of oil and gas, it was imperative that they plug any perceived risk to their citizens’ well being in the financial market.( After all, It has the second largest oil reserve in the world). With the restricting derivative regulations that it imposed on the financial sector in 2015, it has allowed for more stability and security in the country’s forex market.
Coupled with that, one of the reasons why many traders have begun flocking to Canadian Forex Brokers is the Canadian Investor Protection Fund or the CIPF. This Fund acts as a protection layer, offering traders up to 1 million in case the Canadian Forex Broker declares bankruptcy or has its assets liquidated for some reason or another. This is not the only type of fund of its kind. The United Kingdom has a similar fund with the FCA which provides 50,000 euros for similar protection for traders. On that front, we can observe that Canada is going the extra mile to protect traders. This is especially helpful for those clients/traders who have significant sums of money invested with these Canadian brokers. This guaranteed protection gives them the peace of mind to be able to conduct their business within this environment without fear, and this allows for a more productive and competitive environment within Canada, which is always good for the economic health of their country.
One of the essentials when choosing a good forex broker is being able to identify the broker with the best spread and commission offer. Now, for those who are seasoned forex traders, this may seem obvious, but with the excitement of learning about the possibilities of trading forex, a new trader may completely bypass this essential portion of choosing a broker. And if they do this, they may very well end up with a company with very high spreads, and or commissions that eat into the profits that they may make.
In economics, we can observe that within a protected market in which the players are scarce, there is usually vast freedom for them to set whatever prices that they choose to because demand for their services is high and competition is low. In a free market, however, the opposite is true. Vast competition drives down prices, which is always great for end consumers.
Now, you may be wondering what that economic principle has to do with forex, or even with Canada Forex brokers. Well, the same principle applies in the currency market. Unlike many developed countries across the globe (the United States included), Canada remains one which allows its citizens to trade with overseas brokers who do not have to possess a valid Canadian regulatory license. Yes, you read that correctly. While this may seem like a rather crazy thing to do for some people, it is, in fact, a smart move, made to benefit the consumer.
To some, this move may be seen as counterintuitive to the protection that Canada offers with the CIPF, as its citizen become exposed to potentially unscrupulous brokers overseas, but the move is meant to drive competition within the Canadian market, as Canada FX brokers will now be competing with not only their local counterparts but with every other forex broker in the world that offers their services to Canadians.
So how does this benefit you? This intense competition drives companies to offer better spreads and commission rates to their clients, to attract more investors and to keep the clients that they already have. After all, it is all too easy to switch brokers in the currency market.
When choosing a broker, the best Canadian Forex brokers will be the ones who offer very competitive rates relative to the type and quality of service that they offer, which leads us to the next point.
Canada has a multitude of agencies dedicated to ensuring stability and proper regulation within the financial sector. For traders who are contemplating using FX brokers Canada, they should be aware of these agencies, and they should find out which brokers are regulated by which institutions. It is recommended to avoid forex brokers who are not regulated. Only top Canadian FX brokers will go the extra mile to obtain licensing from a regulatory body, as this ensures that they are maintaining certain standards of quality and integrity in their interactions with clients. And if you are a person planning to do business in the financial sector, those two qualities are extremely important.
The main regulatory bodies within the country are as follows:
There are these many agencies across Canada because the country does not possess a centralized regulatory system, which allows all relevant financial regulations to be governed by one central body. Instead, each of these institutions has differing responsibilities with regards to regulating the various financial firms within the country. This means that traders must be vigilant of where exactly their forex brokers are located within the country, as brokers located in different territories may have slightly different regulations. In the world of trading, knowledge is power, so in order to be fully secure when conducting their transactions traders should be fully aware of the type of regulations that their brokers are held to.
One of the last things that forex traders consider when choosing a broker, is probably one of the more important things, not necessarily for the trading itself, but for everything else. That thing is customer support from their broker. The truth is that as forex traders, we rely on best Canadian Forex brokers a lot, not only to process our trading orders but also for many other transactions as well. Think about it, most brokers require you to confirm your identity in some form, before you are able to open an official account with them. This means that you have to provide them with sensitive information about yourself, whether that may be your passport information, or drivers license, and your bank statement or a utility bill with your name and address. When uploading these documents, you are placing a large degree of trust in the broker that they have integrity (that they won’t sell your information to identity thieves and other unscrupulous persons) and that they have the security capacity to protect your information.
The fact is however, that customer service extends beyond the issue of providing a secure space for clients. It also extends to simple support in everyday transactions. Helping a client to set up an account, answering questions or concerns in a timely and friendly manner, and overall making the client’s experience a personable and comfortable experience. Most brokers do not do this, and this is why they fall short. It is this extra touch that separates the good brokers from the truly great ones.
Whenever choosing any broker, whether it be a Canadian Forex broker or one from the other side of the world, the trader should remember that knowledge is power. And with the ability to research everything about the broker online, then that power is always in his hands.
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