Is Your FX Rates Broker a Scam?
When you look at an FX rates broker you need to consider whether or not it is a scam. There are many scam brokerage companies trying to get your business. There are certain points that you should look at to determine the credibility of your broker. You also have to consider what you should do if you already have an account with a scam broker.
FX Rates Fact and Fiction
The first step in determining the credibility of an FX rates broker is to separate facts from fiction. This is very important because traders look at reviews when they determine credibility. All reviews should be looked at carefully because of the subjective nature of them. There are a lot of traders who state that they lost on a trade and it is somehow the brokers fault. You need to consider these statements carefully because there are times when traders will lose and the broker may not be at fault.
Of course, there are times when the loss is due to the broker. This could be due to order execution or an unreliable trading platform. It is important that you take the time to consider what the brokers fault is and what is not.
How to Protect Yourself
Once you know to separate the fact from fiction you have to know how to protect yourself from scam brokers. There are a few ways that you can do this with the most important looking at reviews of the broker. Reviews from other traders are still the best way of checking the reputation of the broker. When you do this you need to consider fact and fiction.
When you research the broker take the time to look at where they are located. Certain countries have stricter regulations on forex brokers than others. Many of these regulated countries insist that credible brokers register with a governing body. If the broker is located in one of these countries you should look at the governing body’s website and see what they have to say about the broker.
Reading all the fine print is essential in protecting yourself against scam brokers. Brokers that offer incentives to open an account could be hiding some terms that they want you to overlook. You also have to read the fine print in regards to withdrawing your money. There are scam brokers that state in the terms that you cannot withdraw for certain reasons.
If you have one your research and feel the broker is credible open a small account first. These small accounts have lower capital rates. This means that if the broker is a scam you are not losing a lot of money.
If You Have a Bad Broker
The problem is that some traders already have an account with a bad broker. If this is the case there are only two options available. The first option is to read through all the terms and conditions. When you do this you may be able to find information that puts the broker in the wrong. This gives you something to argue your case with.
The second option is to talk with the broker and try to sort out the problems. When you use this option you need to be firm, but also polite. You are more likely to get a resolution if you stay calm and polite.