How to Avoid Scammers in Forex?
You might ask yourself as a beginner trader “is forex a scam?”. Therefore, before you start trading in forex it is important to do thorough research about your broker. Checking the website of the broker is an essential part of any research. Also, finding an up-to-date and active page is very important for credibility. Moreover, the experience of the forex broker plays a vital role. This is because building a good reputation in the financial field is a hard task, especially when the reputation is maintained for more than a decade. The following are the points to consider when choosing your broker.
Fully Regulated Broker
Forex is the most liquid market globally. The trades happen day and night; hence, the size and scope of the market are challenging in terms of regulations. The forex market is decentralized; therefore, many governments and independent entities monitor forex trading. These include the Australian Securities and Investment Commission (ASIC), the Financial Conduct Authorities (FCA), and many more. To obtain such licenses and be regulated under those bodies, standards should be complied depending on each of its requirements for capital, regular audit, annual fees, communicating any changes with clients, etc.
Excellent Customer Service
Prompt response is very important for your forex broker. It means that you are a priority. Being able to communicate with the customer service and your account manager at all times, along with the efficiency of problem-solving, gives you the green light to sustain your trades with the broker.
Check the Online Reviews
Reading reviews written by traders can give you a brief about the broker. However, not everything you read is correct, especially regarding complaints. This is because some traders may write a bad review out of a lack of experience or not being familiar with the terms and conditions.
Information about the company such as contact details, history, and headquarters is crucial. It is important to have all company details like its regulatory bodies and risk alerts on the website.
Signs for a Forex Trading Scams
Here are some signs you should look out for that point to a forex scam.
No Proof of a Trading System
Forex brokers need to provide a trading platform for traders in order to buy and sell. However, scammers might convince the trader that the trades are made without his/her interference. And some offer to invest on your behalf as a trader. Those forex brokerage firms are suspicious and should not be trusted at all.
Spam Emails Asking for Personal Information
Some scammers will ask you to provide personal information to accept or decline your payments. Our advice is to never provide personal information, specifically your debit, credit, or prepaid cards’ information or even your bank details. It is only acceptable if you truly trust the broker or if you are using a trusted online payment.
Offered Opportunities that are too Good to be True
Forex is not magic. To be a good trader, you need to read, do research, and keep learning from your mistakes. No one can promise you anything. It all depends on the market, in addition to your methodology and your strategy to mitigate risk.
If the broker restricts you or not allowing you to withdraw your money, then this is a red flag. Though, this is not always the rule, because sometimes the fund is not released by the bank or the payment solution company in due time. This means that the delay is not caused by the broker, which in turn means it is not a scam.
Forex trading is legitimate and is not a scam because it is highly supervised by its regulatory bodies. Individuals, companies, and governments can only sustain by mitigating risk and hedging, for several purposes depending on the aim of each. However, it is the traders’ responsibility to research and look for the most suitable brokerage firm for investment because scammers may take advantage of those inexperienced traders desiring to enter the market.