Looking to do more with your Forex investments? You will need a reliable forex trader to do all your transactions.
If you are wondering why you need to hire a forex broker, here is the answer. Hiring the right forex broker can make your trading life easier for you, as you would know that the trading platform is taking care of your money and you have nothing to worry about. You could go on with your daily transactions, and buy and sell currencies without a worry.
However, while a good Forex broker can work wonders, fake ones could cost you a lot of money. Be careful because the market is full of fraudulent brokers. Getting involved in a scam can lead you to lose a significant amount of money. If you want to eliminate that possibility, you must do your research well before committing to one broker.
The Ten Simple Tips to Know Whether a Forex Broker is Scamming You
Scams have certain giveaways. You just have to spot them and stay far away from that broker. Here are ten ways to detect a Forex broker scam.
Look through their marketing images and videos:
Sometimes, brokers think they can get away with a scam by incorporating hidden conditions or misusing a language barrier to their advantage in their marketing content. However, everyone ends up making slight mistakes that you can spot if you analyse all the content thoroughly. You will notice the discrepancies clearly if you are feeling critical. A huge difference in what the company promises vocally and what they show in their marketing videos is a huge red flag.
Check your Forex Brokers’ reputation on the Internet:
The Internet is a weapon, and you must use it to your advantage. You can always look up reviews of the broker companies you are considering to get a clear idea about how they treat their customers. If you find that all the available reviews are completely positive and too good to be true, pause and think. Even the best Forex brokers have some kind of a flaw or what may appear to be a flaw to particular critics.
Discuss with other traders:
Joining a Forex forum can help you in a lot of ways. You will be able to consult other professional traders before taking any decision. This can be helpful when you are trying to choose a Forex broker for yourself. If you are unsure about a company’s reputation, throw the question open to the forum. If nobody has heard of it, then it is wise not to hire them. They might be a new broker company, but they still need to make themselves credible. On the other hand, if someone talks about a very bad experience with the broker, stay far away!
Do not go for free blogger sites:
You might justify it to yourself saying that the broker has started out with minimum capital and cannot afford to host his own site right now. But do remember that you will be handing over your precious dollars to a person who would definitely love some capital. If you want good service, you have to look for brokers who have already established themselves. Those who operate from a free blog are a big no-no!
Look for minor design faults in the website:
Have you ever tried to distinguish a fake article from the real one? The packaging is vital because it contains most of the indications. Similarly, the website of a broker can be an important giveaway of the firm’s true intentions. If you find anything unusual, like small fonts, unnecessary spaces and suspicious promises, steer clear of that broker because they are clearly trying to run a scam by deceiving people.
The sign-up process is not complete:
When a Forex broker is not genuine, you will find that things start getting fishy right from the signing up process. You will also find it difficult to download the broker’s proprietary platform, and that should immediately alert you to foul play. Any good Forex broker would want to start a business with you as soon as possible. They will give you a demo or live account with minimum hassle. You might think that the mistake is on your part, but brokers should not be given the benefit of the doubt considering that money is involved.
Look for Price Manipulation
Some forex brokers can manipulate the prices they charge. For instance, they could overcharge you on a spread markup. Legitimate brokers will generally have pips between 1 to 3 for major currency pairs normally. Fake forex brokers could offer you high spreads on the same pairs, as they would want to lure you to the scam.
That, in itself, is a major sign that they are playing you. Since it is your money, you should always be careful when analysing the result. Look for even the smallest indications that the company is trying to pass off fake results as real because they can take this a step further by stealing your money.
Look for communication flaws:
Forex brokers who are running scams will try their level best not to disclose a lot of information. If you find that the communication between them and you is stunted, understand that there might be something fishy. They will leave your questions and doubts unanswered so as to not leave a trail of their promises. Do not settle for anything but excellent customer service when choosing a broker.
Do not go for guaranteed returns:
Any Forex broker who assures you of a certain amount of profit every month is bluffing. The trade is very random, and hence one cannot predict the outcomes unless they want to make it happen artificially. Usually, other traders’ funds are used to meet your return value in the beginning to gain your trust, and then they show you their real self.
Evaluate your trades:
If you are already stuck with a Forex broker, then analyze your trade thoroughly looking for signs of churning.
Making the Right Moves
If you are a beginner wondering which platform you should join, the Forex or the Foreign Exchange Market is one of the best marketplaces to be in. The trading volume of Forex is almost four times the global GDP, which just goes on to show how big the platform actually is. Trading worth 5.3 trillion dollars is executed in the market every day.
It could be a bit tough as a beginner but focusing on the basics will help. Here is a golden saying – if it’s too good to be true, it probably is. You need to tread your feet cautiously in such a scenario and test it deep before investing your hard-earned money.
Knowing to detect the Forex brokers who can spell disaster for your trading career, will ensure you’ve nothing to worry about!