Always check your Forex broker
With so many online scams at the moment it is very hard to put a trust into Forex brokers, especially these days as most of them had recently received a bad name due to market making activities. We have seen it number of times – a website that looks great and user-friendly but the end result is always some kind of a scam. Believe it or not, most Forex brokers use exactly the same tactics as online scam artists which we will get into later but for now, below is a guide on what to do when you are looking for a Forex broker.
Always check where the Forex broker is based. We tend to find that the majority of ‘scammy’ brokers are based in countries where legislation is poor. If you try and argue your case, you may find that your country’s legislation may not help you and if you were to approach them individually, they are too far away. A good piece of advice is to try and choose a broker that is within your country; at least to begin with. There are still a few checks that you need to make but at least they are ‘local’ and that makes correspondence a lot easier.
Licences and regulation
Always ensure that they are regulated by the top financial authority and that they have obtained the necessary licenses to operate as a legitimate Forex broker. If they are within your country, it is easy to find and rely on the licences that companies require. However, if they are abroad, chances are licences are easier to obtain or some may not even be required. If they are abroad a lot more research will need to take place to devise a list of all regulatory terms and licences these companies have to obtain.
New Forex brokers
Realistically, the age of the company should not be a factor. A lot of people are scared of new brokers but they all have to start somewhere. In fact, a lot of companies that have been trading for years still use ‘scammy’ tactics to upscale their customer base yet they are trusted by others only because of their age. Admittedly, a degree of caution has to be exercised when analysing a new broker but they should still be in the equation if they comply with regulatory laws.
Always beware of broker websites telling you that you can make thousands of dollars in a week, your losses will be replaced or that they can teach you how to trade like a pro in a week. Let us get something straight here. Trading is hard. The reason why it is hard is because it is not just about the markets. It is also about keeping your discipline and emotions at a level where traders are constantly in control. Without this control, traders usually fail. This is something that takes months or even years to master alongside successful trading strategies. If a broker is telling you that they can make you into a world class trader and promise offers that are simply too good to be true, it is better to continue your search elsewhere.