How to avoid scam forex broker
With participants coming from multinational corporations, to speculators, to banks, professional traders and governments, Forex market is growing to be one the most active trading market across the world.
The instability of foreign currency prices can bring both benefits and loss for an investor in the trading market. Nonetheless, it is not the only risk an investor should be concerned about when it comes to Forex trading. It is important for investors to be aware of the forex broker scams that are intended bring them loss. The highly insignificant nature of trading in forex industry with slack market rules can leave investors vulnerable to Forex scams and frauds. Internet on the other hand plays a significant role at encouraging fraud forex brokers with fake names and credentials.
Prior to making an investment with these brokers, it is essential to understand the nature of forex frauds and the effective ways to avoid them.
Forex broker scams:
Many common forex frauds start with selling software which is intended to benefit the customer, structuring a false account for the customer, implying that it would help customers generate commissions and huge money. This is outright theft and phony marketing that you should never believe in.
Scam artists are improving at Forex scam as it is plastered all across the internet. The first thing to do is prevent yourself from putting faith into a site that claims that Forex trading is simple. The truth is, the actual forex trading is not easy and requires both patience and hard work.
The scammers typically capitalize on the nature of human beings to be haste, wanted things quickly, easily and conveniently. They use this knack of human beings to use it against them and profit from their impatience. Therefore avoid being lured by easy and quick profits.
“Secret trading system” is a new developing scam trend in the forex market. Many fraud brokers claim to have access to a system that is like a secret trading technique or a holy grail which ensures your profit overnight. Investing on such a scam ultra-secret trading method is only your ticket to bankruptcy. Do not fall prey to such lame bragging that are only meant to cheat you.
Moreover, it is important to verify the methods of income on the site you are connected to as it is one of the most effective method of successful trading. All the reliable sites provide an income proof. The income check proof is generally a good sign implying that a Forex broker is reliable and ready to help you
Note however that a reliable income method is not a guarantee statement for the trading methods a site or broker undertakes, it only suggests that the system may be legitimate.
Reading reviews is another great way to save yourself from scam. There are many professional websites that provide upcoming and potential traders with the information about reliable and fraud brokers online. For example, if you read reviews about Onada or FXCM, who are the two famous brokers you will find yourself in utter confusion. However, reading any review about them will also tell how a serious broker works and achieves a status and name in the forex market. Furthermore, the legal brokers always undergo a regulation process in their region. Demand for a license or legitimate certification that states of the accreditation of broker at a government level.
Education and experience of the broker:
If you are new at forex trading, it is absolutely important to equip yourself with the appropriate knowledge of forex trading. Learn about the education of the broker. What tools does the broker provide to you? Is there a library that allows you to access information such as Reuters?
Are all the relevant fees disclosed by the broker? Is the information of currency pairs clearly stated and fixed? Question this from your broker. Forex brokers offering no or low spread are often regarded as forex scams.
The relationship with the broker is like a two way street. The broker should be flexible at helping you start with small investments and grow into a more sophisticated trader. For instance, does your broker offer you tiered accounts? A genuine forex broker ensures that your trading is supported by personal account manager who will be guide to you in making the first investments in the forex trading. As you become a confident trader you will grow into becoming a professional personal dealer supporting the forex trading and understanding the market better.
Many scam websites are basically scam software. The simple “online” status does not mean that you are dealing with a human being and not a robot. A genuine online broker would definitely provide an address with official physically located offices somewhere in the world. No developed business remains vital for it is threatening for their success. Furthermore, a genuine broker will always leave contact like email or phone through which you can discuss the trading methods better. Complain about a few things and see how the “site” answers.
The rise of social networking has made it much easier to differentiate between a genuine and scam forex broker. Is your broker participating openly in social communication with the clients and customers? Genuine brokers are prompt at social networking like Twitter, Facebook and Linked.
Forex trading scam has become one of the most threatening frauds. Reports have claimed loss of millions of dollars in the name of trading investments that scam websites later run away with. The worst thing about internet trading scam is the inability to file for a case. If you suffer from fraud you are likely to find no assistance in recovering the loss. Provided that, trading itself is a risky business. Once you invest in the foreign exchange market you are always at the risk of loss. To ensure that you secure yourself of at least the threat of scam it is significant to sign up for a reliable and genuine forex trading broker.