If you’re an active forex trader, you’ll realize that the USA retail forex industry has been consolidating since 2012. Today, there are few brokers who provide the needed liquidity but they are continuously growing their client base as well as asset totals. Other forex brokers have ceased to operate their brokerage firms. In 2012, most experts believed there was a slight drop in total client deposits which just continued the 3% retail trading volume drop in 2011. Speculations on why such events occurred: poor performance of strategies, high consumer debts, and choppy yet flat forex market.
The US forex retail market is said to be maturing because investors are becoming more discerning, demanding, critical, and aware. A lot of potential forex traders have been studying the market for quite some time now. They know about brokers’ services, reliability and security. The internet has a wide collection of horror stories about illegitimate and unscrupulous brokers. As such, potential traders are now going after the quality of forex brokers. They won’t make any deposit to brokerages if these brokers don’t have any outstanding reputation.
Some people in the industry feel that the harsh regulatory requirements were somehow instrumental in the forex market consolidation. In fact, a lot of big brokers have already left to move elsewhere. A lot of brokers have started turning away US clients because the SEC had been very demanding of such brokers. As such, there is a only few retail brokers left in the United States of America. Because of the maturing clientele, future developments seem to point to a less predictable yet faster growing forex market wherein only reputable brokers thrive.