FOREX Account Statements
Statements
Before we move on to account statements I just want to touch on segregation of funds. In times past there was a
danger that
traders who deposited money with their broker who did not segregate their clients money from their own companies
money were at
some risk. The problem arose if the broker misused the deposited funds to either reinvest or otherwise manipulated
these deposits to
enhance their own standing. There were also instances were the broker became insolvent and many complications
ensued as to what
was the clients money and what was the broker's money. With the advent of regulation most broker now segregate
their clients
funds from the brokerage funds. Deposits are normally held with banks or other large financial institution that are
also regulated and
bonded or insured. This protects you money should anything happen to your broker. The deposit taking institution is
normally aware
that these deposits are client's funds. Depending on regulation in the particular country you live, each client may
have their own
segregated account or for smaller depositors they may be pooled. The point is that segregation of funds is a
safeguard. Ask your
broker if your funds are segregated and who actually has your money. Just as with a bank you should are entitled to interest on the money you have on deposit. Some broker may stipulate
that interest is
only payable on accounts over a certain amount but the trend today is that you will earn interest on any amount you
have that is
not being used to cover your margin. Your broker is probably not the most competitive place to earn interest but
that should not be
the point of having your money with him in the first place. Payment on your account that is not being used and
segregation of funds
all go to show the reputability of the company you are dealing with.
In this section I will discuss briefly the basic account statement. I have to keep this basic as there are as many
flavors of account
statements as you can imagine. Just about every broker has their own way of presenting this. The most important
thing is to know
where you stand at the end of each day or week. Just because your broker is Internet based and has all the bells
and whistles does
not mean they are infallible. Many of the actions taken before information is imputed are still done by hand and if
humans are involved
there will be a mistake at some point. The responsibility lies with you. It is your money so make sure that all the
transactions are
correct.
Also see: [ Forex statement example ]
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