Despite what you might hear, most Forex brokers are actually honest people doing an honest job. It’s the few bad apples you need to watch out for. In any case, telling an honest broker from a dishonest one is probably the first thing a Forex trader should do; literally the first thing, at least when it comes to Forex trading. Here are a few hints and tips to help you manage your situation.
First and foremost, the authorities are on the job
The number of actual Forex frauds has been on a constant decrease during the last few years, but this does not mean you are not in danger of losing money. Crooks are being discovered and caught all the time, but this is of little comfort to their victims, as only a tiny fraction of the stolen money ever gets recovered. Nevertheless, few crooks can sustain their operations without a hitch for more than a few months, while legitimate Forex brokers stay in business for years, building and maintaining their reputation. So before you place any meaningful sum in their care, make sure they won’t take actions against your interests. Their reputation is a good way to start.
Next step: get real legitimate Forex brokers
You do realize many traders fail to make a profit and sometimes blame it on the broker. And even good reviews can be fabricated, so don’t take anything for granted, and always keep a healthy dose of skepticism when reading those. Blogs and forums are full of stories how (il) legitimate Forex brokers conspired against their clients, how slippage was always present, markets suddenly change direction at the worst possible moment etc. Who is behind these claims can make all the difference. A rookie will trade based on feelings rather than logic, and many experienced traders count on this. It is not uncommon for “traps” to be laid for rookies who take the bait. In all fairness, legitimate Forex brokers could warn people of this, but this is not their primary duty. However, brokers do tend to drop the ball every now and then, more often than they would like to admit, and incur losses for their clients. But this is far from an everyday occurrence. You need to look for complaints from experienced traders and specific (large) single losses. But if they accuse brokers of not responding to calls or being unavailable, refusing to provide specific information to direct questions, being vague and pushy, this is something you need to take into account. Being unable to withdraw funds is the absolute worst when it comes to telltale signs. So make sure your broker is reputable, make a small account and go easy at first. And read the small print inside the contract; it’s small and illegible for a reason.
If you do end up with a crook, there is little you can do. Other than reporting them and writing reviews, there is little recourse. Just make sure your accusations are true before making them. Legitimate Forex brokers are not a scarce “asset class” and you can find plethora of honest, open and transparent broker in our website.