The foreign exchange market is a very popular global decentralized market that allows traders to exchange different currencies; the field is perfectly legal in Canada, but there are many regulations that every Canadian Forex trader should keep in mind. While looking for the best Canadian FX broker, there are many things that you need to consider. To make your job a lot easier, we have decided to come up with a definitive guide that will help you learn more about the market and have a better understanding of everything that you need to know about FX trading in Canada.
Canada is a county in North America and it has ten different provinces and three territories. A very interesting thing about the Forex market in the country is that there are no nation-wide regulations in place and the market is regulated on a region by region basis. Forex trading with both, local and international brokers is very popular in Canada and it has been so since currency trading became available to retail traders. In the world, Canada stands to have one of the most heavily regulated Forex markets which ensure that every single trader can feel safe when they are starting trading in the country.
We believe that by having proper knowledge and enough information, you will be able to find the perfect Forex broker in Canada for your future trading. Follow this guide carefully to get as much information about the FX broker in the country as possible!
Being one of the countries that are very strict when it comes to FX trading, Canada offers traders a very safe environment thanks to the regulations that each of the different regions of the country are working very hard on. The regulations are very diverse and different in the regions of Canada, and it is very important to have a better understanding of all of them to be successful while trading.
Something that every broker needs to keep in mind before allowing people to trade on their platform is that they need to comply with the financial regulations that are enforced by the Investment Industry Regulatory Organization of Canada (IIROC). The oversight is provided by the Financial Institutions Supervisory Committee (FISC), they also coordinate regulatory activity and set different types of policies for many financial institutions around Canada.
While going through different brokers to find the best legit FX broker in Canada check their website well to learn about the authorizations that they have, in most cases, the information regarding the regulations is shown at the end of the page. If you could not find the information that you were looking for, visit the official website of the IIROC, where you will be able to access the link of the list Forex brokers in Canada that are regulated by authorities.
However, always keep in mind that there are different regulations in different parts of the country. For example, in Ontario, the regulations are the work of the Ontario Securities Commission, the British Columbia Securities Commission takes care of the financial sector in British Columbia, and the regulatory body of Quebec is the Autorité des Marchés Financiers.
Another thing that IIROC ensures is Rule 100.2, which specifies the maximum leverage and margin for every Forex trader. The thing that you should always remember is that the lower the margin rate is, the higher the leverage ratio becomes. The IIROC also has strict criteria for its retail forex trading services representatives in the Canadian financial services market.
Something that makes understanding the regulations of Canada the most difficult is that there are fifteen government bodies that regulate the field of Forex. The fact that the field is heavily regulated does not necessarily mean that Forex trading is safe in the country, something that we want you to keep in mind is that even if you are trading with the top Forex broker in Canada, there are always huge risks applied to forex trading.
So, always be sure to try and be as safe as you can. Look for different types of reviews of the brokers to better understand the pros and cons, the way they work, etc. Also, the more information and knowledge you have, the safer you are! So always be sure to take advantage of any type of educational offerings that a broker might have, and in the Canadian market, there are many Forex brokers that offer different types of E-books, webinars, and many more.
We have already talked about the regulations that are in place in the Canadian market, but something that many have been talking about is that the regulations do not really work the way they should, because they are basically taken from the regulations of the US.
Many are saying that the biggest issue that the Canadian market has is that there are many copied laws from the US regulators and these regulations need to be worked on. However, it should be said that because of so many regulations, top Forex brokers in Canada continue to attract many traders on their platforms. It is considered to be one of the safest places for traders, but there is always a room form improvement.
Something that everyone should remember is that simply taking the laws that work in one country and trying to fit it to another does not mean that it will also work there. The financial markets in different parts of the world are very different and it is very important that the regulations that are in place are created especially for that market since there can be some laws that are not needed at all.
However, all of the regulations and hard work of companies like IIROC make Canada one of the safest places for Forex traders and it attracts many people around the world.
The Canadian dollar, sometimes called the “Loonie”, because of the loon bird which is drawn to the Canadian $1 coin, is the 7th most traded currency in the world. This kind of popularity of CAD comes as surprise for many since the economy of the country stands at 10th place around the world, and at the same time, it also represents the 11th largest export economy in the world. It is a well-known fact that the major of the currencies that are being traded in the world of Forex is supported by central banks, in the case of CAD, it is the Bank of Canada.
Something that every Forex trader in Canada should keep in mind is that the price of CAD is largely influenced by the relations of the country with the US. The US and Canada have a very active trading relationship and since USD represents one of the major currencies around the world, the relationship affects CAD very much.
What is especially interesting about the relationship between the United States and Canada is how things vary. Canada’s financial market system helped the country escape many of the bad mortgage issues that have plagued the US. On the other hand, technology companies are less significant to Canada’s economy, and this led to the relative weakness in the Canadian dollar during the tech boom in the United States in the 1990s. These are a few of the many important factors that every FX trader in Canada should keep in mind before starting trading the loonie.
There are many people who are saying that regulations are not needed at all and all they do is that they hurt the field. However, when it comes to something like Forex, regulations are very important. Not only do they make sure that your funds can be kept safe, but they also are vital for the success of the whole field.
Because of the regulations that are in place in Canada, the field is safer than in many other countries where the regulations are completely ignored. Top Forex Brokers in Canada are regulated by several regulatory bodies that make sure that both the broker and trader can feel safe while doing their job.
Forex is one of those fields that are already very risky, so taking additional risks just does not make sense. So be sure to always check the regulations that are in place and try to follow the guidelines that were created by professionals to make sure that your funds can be safe. Canada offers a lot in this regard, so if you have decided to start trading in the country, be sure to learn about the regulations that are in place as much as you can.
CBs are government agencies that monitor their domestic currencies to maintain a healthy economic environment, balance exports and imports, prevent inflation, and stimulate economic growth. Central banks, in particular, currency rates, have a strong effect on the capital markets.
The Monetary Committee of the Bank of Canada responsible for rates is known as the Board of Directors. It includes the Bank of Canada Governor, a senior deputy governor, and four deputy governors. The BOC has set a 1-3 percent inflation target a year, and over the last 15 years, this target has been met to date.
We have already talked about the regulations in the country, and as we have noted, different regions of Canada are regulated by the different organizations. The Central Bank of Canada is not responsible for the regulations of the field, however, its job stands to be as important for the success of the field, especially for those who are trading CAD, since the organization ensures the safety and inflation of the national currency.
One of the most important things when it comes to the Forex brokers is the payment methods you can use to fund your trading account. Canada has many diverse offerings in this regard, and you can enjoy different means of payment while trading with the top brokers in the country.
Among the most popular tools of payments are credit cards like Maestro, Visa, and Mastercard; you can find these methods on most of the trading platforms in the country. These methods of payments are very fast, especially compared to other means of payments, like, for example, wire transfers, which are also very actively used in the Canadian market. Wire transfers can take anything from two to five banking days and they are made either in person or can also be made with the help of online versions of the banks.
Forex trading brokers in Canada also offer you to go more traditional and use checks for payments. If you decide to use this method to fund your account, remember that it can take up to ten days to make your payment, and most of the time the check should be written either in CAD or in USD.
On the flip side, you could go with the more modern methods of payment like E-Wallets which are very popular among the Forex traders in Canada. In most of the cases, this represents one of the fastest ways of payments, and in addition to the speed, many top brokers in the country do not have additional fees for E-Wallet payments.
The thing about FX brokers in Canada is that each of them is using different types of Softwares and you can have a very different experience with each one of them. Many brokers in the country are using Softwares that were developed especially for them, but there are also some of them that using are using Softwares that are very popular in the market around the world.
First of all, we need to talk a little about MetaTrader 4, (MT4) which is probably one of the most popular trading software around the world. Over the years, it was able to set a gold standard among the different platforms around the globe. MetaTrader 4 is known to be a great option for those who are just starting out in the business since it is very easy to use, especially compared to other software.
In addition, if you use a top Forex broker in Canada that uses MT4 you can benefit from many things, including copy trading, with the help of the Expert Advisors. This software is also very popular among those who have been trading for a long time because of the advantages that it offers, including advanced charting capabilities and tools for technical analysis. It also offers traders to use it on their smartphones, which is a very big advantage in the world of forex.
There also is a newer version of the software available on the market known as the MetaTrader5, which offers even more benefits to traders. Canadian top Forex brokers who trader stocks and commodities are using this version very actively since it supports more timeframes compared to its older version, has a built-in technical indicator, analytical and graphical objects, and many other things.
In addition to all of these, if you do not feel like downloading the program, you can enjoy its offerings through a web-based platform. You can enjoy the offerings of these amazing platforms directly in your browser, with the MetaQuotes WebTrader. With this great option, you can have access to different markets with most of the devices and browsers and it is considered to have very high-security standards since the data transmitted between trader and broker is heavily encrypted.
Compared to most of the countries around the world where Forex profits are regarded to be income, in Canada, the money that you get from trading is treated as Capital Gains. In most cases, this means that 50 percent of the money that you get from trading is taxable, while the other 50 percent is not.
However, since the regulations regarding the taxes and fees are ever-changing, always be sure to check the information before you start trading so that you won’t make any mistakes, the best thing to do is to contact a professional who you will know that has the most up-to-date and trustworthy information.
When it comes to fees, they are different for most of the brokers in the country. The fees applied to your deposits can also be different according to the payment methods you are using, fees are very different on every platform so always be sure to check the information carefully to get the knowledge that you need.
We have talked a lot about the field in Canada, but why should anyone start trading with the companies that are functioning here? Well, among many other reasons, we believe that the most important one is that Canada has one of the strictly regulated FX markets in the world.
With its regulations, the country stands to be one of the most popular places for traders around the world. The regulations make sure that your funds can be safe at any moment of the day. The companies are working very hard to make sure that you can stay safe while trading with some of the most well-developed platforms in the world.
The diversity that the country offers is something that makes it so popular around the world. No matter what you are looking for in an online Forex trading in Canada, you can find it very easily. Though there is some research that goes into it, the results are worth it!