Google searches for “forex broker scams” will show you how many unscrupulous and questionable brokers there are.
Why are they even in business?
And how do they scam traders?
What can you do to make sure your broker is trustworthy?
In this article, we will try to answer all of these questions.
When you’re ready to become a trader, it’s up to you to identify which brokers are reliable and which are not.
However, Trading Education is here to help you by guiding you through the steps you have to take in selecting a trustworthy and regulated broker to trade with.
Review sites :
- Sites like Trustpilot contain a lot of information about all kinds of companies, including forex trading brokers. The nice thing about these independent review sites is that they only contain comments from users.
- Furthermore, you can check the broker’s average rating, which is calculated based on all of the reviews left by customers. This can solidify your final decision further.
- Often novice traders get interested in the forex market because they know someone who’s been trading for a while. Nothing beats the word of a friend or a family member since they have no reason to mislead you.Even if they use another broker, they can surely point you in the right direction.
- An investment advisor may also be able to assist you. Since their reputations are on the line, it is unlikely that they will lead you to an unregulated, questionable broker.
- Regulatory information should be listed on the broker’s official website.You might also consider going directly to a regulatory organization, as legitimate brokers are legally required to register with the SEC in the US, the FCA in the UK, or the ASIC in Australia. A broker’s registration, status, or any disciplinary action against them might be listed there.
- These databases cannot be manipulated and will give you a clear picture of a broker’s past.
Check Social Media Channels
You should check the official social media channels of your broker, usually on their website. Be aware of signs such as:
- Followers versus engagement rates.
- Social media reviews left by customers.
- Comments left by customers onpublications.
- How efficiently the company responds to comments (if at all).
- The type and quality of content they publish, etc.
- Having a broker who does not respond to you may be a red flag that they are not looking out for your best interests.
- Do your research, check to make sure there are no complaints, and read the fine print on all documents to avoid being duped by a shady broker.
- Open a mini account with a small balance first, and trade for a month before attempting a withdrawal.
- Your broker may be churning if you see buy and sell trades for securities that don’t match your objectives.
- Review all your documents and discuss your course of action before taking more drastic measures if you are stuck with a bad broker.