Is my money safe with a forex broker?

Against what people are afraid of — the broker going under or disappearing with the balance — yes, and there are concrete mechanisms you can verify yourself before depositing a euro: a real licence, in the name of which entity, and segregated funds. Against what actually empties accounts, which is trading badly, no regulator covers you. Three different risks, and only one of them is about your money being safe.

Which three risks are being blended?

• Market risk. That you lose the money trading. It's yours, it's the big one, and no protection exists against it.
• Broker risk. That it fails, freezes withdrawals, or simply never was what it claimed. This is the one the question is about.
• Execution risk. That the price you're given, or the moment you're closed, works against you. It lives in between: it doesn't take your balance, it erodes it.

Almost the entire "safety" debate is about the second while people lose money to the first. Both deserve an answer, without mixing them.

What protects your money if the broker fails?

Three mechanisms, all from the same source: a recognised regulator supervising it.

• Segregated funds. Your money has to sit in accounts separate from the broker's own. This is the key piece: if the firm becomes insolvent, your balance isn't part of the estate creditors divide up, because it was never theirs.
• Capital requirements and audit. The entity has to hold its own buffer and submit to review, which lowers the odds of reaching that point at all.
• A compensation scheme. Some jurisdictions cover part of the balance if, despite everything, the money isn't there. It exists in some and not others, and the amounts differ — one of those things to check for your own case rather than assume.

On top of that, where it's mandatory, negative balance protection: the account can't be left in the red.

And what doesn't protect you, even though it looks like it does?

This is where people come unstuck, so it's worth being explicit:

And one trap with a name of its own: clone firms, which copy a regulated firm's details — licence number included — to look legitimate. Which is why the check is never done on the broker's own website.

How do you actually check?

Find out which entity is holding your balance. It's the one signing the contract, not the one on the logo, and it's the only one under any obligation to keep that balance segregated. That's the check this question actually calls for, and it's exactly the one almost nobody runs: people look at the brand and assume the rest.

The rest — a real licence in the register, leverage as a tell about the jurisdiction, a small test withdrawal — is the same filter you apply when choosing a broker, and it's laid out, in the order worth doing it, in how to choose a forex broker.

A detail almost nobody explains

When you trade retail forex you usually don't hold currency: you hold a contract with your broker that tracks the pair's movement. Your balance is in your account currency, and the position is an obligation between two parties.

That changes the question. You aren't storing euros somewhere waiting for them to appreciate: your exposure depends on your counterparty performing. It's precisely why fund segregation and supervision matter more here than at a bank, and why "is my money safe?" isn't answered by looking at the market but by looking at who you signed with.

The essentials

• If the broker is genuinely regulated, failure is the small risk: your balance is segregated and there's somewhere to claim.
• The big risk is still losing money trading, and there's no compensation scheme for that — only risk management.
• Everything that decides the first is checkable before you deposit, in a public register, in ten minutes.