If you do an online search on fraudulent forex brokers, the number of results is mind-boggling. While the forex world is gradually becoming more coordinated, there are many fake brokers who should be identified and thrown out of the business.
According to investopedia, you can protect yourself from unscrupulous brokers by conducting an in-depth search for reviews of the forex brokers. Even if you’re satisfied with your research, make sure to open an account with limited investment and trade it for a month or two to see if everything is going well.
In this post, we’ll make you come across five fake promises/manipulations that forex brokers make and we’ll also highlight the potential ways through which you can save your hard-earned money from going into a total waste:-
- Easy Profits in a Short Amount of Time
The general misconception about forex trading is that you can make quick cash without putting in much effort. There are forex brokers who also claim the same and promise fast returns through automated solutions and EAs. However, the fact is ‘MAKING MONEY IN FOREX ISN’T EASY’.
Beginners generally make the mistake of collaborating with a fraudulent broker who persuades them with false claims of huge profit returns. Traders usually end up losing money which goes to the broker’s account. Keep in mind, the role of forex broker is to just facilitate the trades. Even if you’re a highly proficient trader, there is no such thing as guaranteed profits in the forex world. So, better do your research before trusting any false commitments and fake promises.
2. Use of Forex Robots to Make Guaranteed Profits
There is no denying the fact that automated trading solutions have simplified the trading procedures. Today, you can find hundreds of forex robots and other tools and resources that can help you make better and informed trading decisions. The problem arises when you have to find the reliable automated solution for your trades. There are brokers who claim to multiply your capital by using forex robots or EAs.
Forex market is highly volatile and uncertain and you cannot expect a broker to help you become a millionaire in just a month or two. Stay away from a broker if he is trying to be overconfident about his offerings.
3. Incomplete Signup Process
When a broker is a cheat, you will observe that things begin getting suspicious right from the start. You will notice that the broker’s proprietary platform is difficult to load and you should consider this alert a wakeup call. Keep in mind, any professional forex broker would not delay things. Ideally, they will provide you with a demo or live account as soon as possible.
4. Price Manipulation
There are brokers who exploit the prices that they charge. For example, they could rip you off on a spread markup. The genuine brokers typically have pips in between 1-3 for basic currency pairs. You can easily spot a fake broker if he is offering you high spreads on the same pairs.
As your own money is involved in this process, you should pay attention to all the indications; be it big or small to save yourself from the money-stealing scam.
5. Look for Communication Errors
Fraudulent brokers will try their best not to tell a lot of information to the traders. If at any point you feel that the communication between you and your broker is stunted, it’s a clear indication that there might be something dubious. Generally, they ignore your queries and confusions so as to not to leave a trace of their commitments. Thus, it is important that you do not compromise on customer service when selecting a forex broker.
Things to Consider Before Choosing a Forex Broker
The best way to avoid any possible forex scam is to give proper time to your research. Below you will find some of the factors that can help you select a reliable forex broker for your trades:-
The first and the most important aspect that a reliable broker must have is great security. Luckily, there are many regulatory agencies worldwide that separate the reliable from the scam. Do an in-depth research in that area. Read out independent and neutral forex broker reviews on the web.
Deposit and Withdrawals
Forex brokers generally have no solid reason to make it difficult for you to withdraw your returns. Keep in mind, a reliable forex broker will let you deposit and withdraw funds without any difficulty.
Make sure the trading platform of your chosen broker must be lasting and user-friendly. Look for the platform that comes with free newsfeed along with amazing charting tools. Lastly, make sure the services includes impeccable aftersales support.
Forex trading can be challenging at times. To earn good profits and to avoid the scams, it is important that you do thorough research on your part. Take a hint from this post and select the most dependable forex broker for your trades.