Like you, I am suspect of the gurus crawling all over YouTube talking about trade set-ups, coming nefariously close to guaranteeing a certain level of returns on your trade accounts, showing their trading screens, or trying to sell “free training.” How do you increase the chances that you are dealing with a reputable advisor?
If someone solicits you to hire them as an advisor to your foreign exchange trading, ask them if they are registered as a commodity trading advisor.
The National Futures Association is designated by the U.S. Commodity Futures Trading Commission as the registered futures association that acts as the self-regulatory organization for the U.S. derivatives industry. The NFA defines a commodity trading advisor as an individual or organization that, for compensation or profit, advises others, directly or indirectly, as to the value of or the advisability of trading futures, contracts, option on futures, retail off-exchange forex contracts or swaps.
According to the NFA, all registered commodity trading advisors who manage or exercise discretion over customer accounts or provide commodity trading advice based on, or tailored to, the commodity interest or cash market positions or other circumstances or characteristics of particular clients must be NFA members.
7 USC Section 12a requires that commodity trading advisors be registered with the Commodity Futures Trading Commission as well.
There are exemptions to registering with the CFTC. These exemptions are specified under CFTC rules found at 17 CFR 4.14. In a nutshell, according to the NFA, an organization is exempted from registration if advice was provided to 15 or fewer persons over the past twelve months and the organization or entity does not hold itself out to the public as a commodity trading advisor, the entity is registered with the CFTC and its advice is incidental to its business or profession, or the advice provided is not based on knowledge of or tailored to a customer’s particular trading account or trading activity.
While the majority of trading advice professionals may be in compliance, there are a number of bad apples out there. Before retaining an advisor, you can check their registration status at https://www.nfa.futures.org/basicnet/.
Alton Drew
16 August 2025
DISCLAIMER: The above post is informational purposes and is not provided as legal or trading advice. Trading is risky. Before embarking on your trading journey, retain professional trading advice.
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