One of the biggest misconceptions among forex traders is that forex is prohibited in the US. This is incorrect. Online forex trading is regulated and allowed in the US under the supervision of CFTC and NFA. Nevertheless, there are some limitations.
Although it could be a double-edged sword, leverage is what makes forex trading compelling for investors. The leverage enables traders to open orders for larger contract size with little capital. Some offshore forex brokers offer leverage up to 2000:1 to attract clients. On the other hand, US authorities believe that high leverage encourages investors to overtrade and take high risk without really understanding it. This is why regulations in the US restrict leverage to 50:1 on major forex pairs and 20:1 on minor pairs...