Forex trading is a booming industry nowadays and millions of people have participated in this market. And like all big markets, there are scammers lurking in the dark of the forex market as well. In this market, traders trade with forex brokers, not with each other, so the only way of scamming is from brokers to traders. Now, how do forex brokers scam forex traders? There are too many ways. Instead, you can learn how to tell whether a broker is a scammer based on these following steps.
Forex regulation is important, if not the most. If a broker can acquire a regulation from a country, that means it can conduct forex trading legally and the authority will protect you when something bad happens. The financial organizations that regulate brokers are very strict and difficult. Brokers have to prove that they are legitimate. Once they have a regulation, they will put it on their website immediately. When you see a broker without regulation, it can easily be a scammer. Never trade with brokers who don’t have forex regulations.
Scammers can never be transparent. They will always try to hide as much information about them as possible. A reliable broker will have no problem putting their offices’ addresses, phone numbers, fax numbers, or company history... on their website. So remember to check those information before trading. A phone call or a quick Internet research to guarantee your safety. Why not do it? Some brokers can take transparency to the next level. They don’t hesitate to show all their financial records and reports on their site. Traders are welcome to check how they handle business and how many people choose to trade with them. To me, that’s real transparency.
The two categories above are the basics of checking if a broker is a scam. However, there are still more ways to guarantee your broker is serious in doing business instead of cheating traders. Forex bonus is a good indication. A big and famous broker rarely has bonus. Why? Because bonus is one of the most effective tool to attract new traders to a broker. Therefore, new and small brokers (scammers sometimes) offer a lot of forex bonus programs so that traders will come to them. The bonus amount may seem very large. However, they only need to tie many conditions to that bonus and then you’re stuck with it. Eventually in time, you will lose more money than the amount of bonus given. This is a very clever way to trick new traders. So remember: a lot of bonus is bad. A broker with only one or two bonuses is good.
Now there are other features that contribute to the credibility of a broker like forex awards, promises, forex forums, sponsors... You can easily check those things on the Internet. It only takes some times. If you can prove all the information a broker post on their site is legit, then you’re good to go. You don’t really need to care about how do forex brokers scam forex traders. Instead, you can protect yourself by some simple steps. To know which brokers are the most reliable, click here.