Because brokers are regulated and licensed, they have an obligation to act in the best interests of their clients. So the first sign that your broker most likely works against you is that 1. the broker is not regulated by the appropriate institutions. They behave more like a backyard casino operation on the market and are NOT trusted FOREX brokers. Some brokers are unprepared to give clear answers to your questions. They are 2. lying about the location from where they are calling and refuseing to give an address for visits from customers. Another sign for scam is that the broker insist for money 3. transfer via sites like Bitcoin, Neteller, CashU, Payza, etc. If you ever decide to make a transfer 4. the name of the holder of the bank account does not match the name of the company. Other illusion for the inexperienced trader is the high leverage. 5.The high leverage brings huge commission impact and huge risk for potential loss. By offering high leverage some market makers encourage traders to trade extremely large positions. Some retail brokers will insist inexperienced traders to do 6. as much trades as possible with 7. various financial instruments for the purpose of generating commissions. One of the most undelightful fraud by brokers is 8. the welcome bonus. It takes a big time period and many trades to complete the requirements to become valid. The main reason not to take a FOREX bonus is that it will lead to withdrawal issues. Most traders will never get to withdraw the bonus. As in every regulated business the income is also regulated, many of the regulated broker companies are looking for alternative ways to gain more than only from the commissions and spreads. Here are coming 9. the social trading plans, trading robots and any trading scheme used to defraud traders. Testing of trading system's parameters and optimization codes causes unsuspecting traders to do nothing more than gamble. A popular modern-day scam is the 10. signal seller. Absolutely illegal the broker gives you trading signals and push you to enter the market right now, guaranteeing phenomenal results.
FOREX fraud is a growing problem, making for many the foreign exchange a negative-sum game. Though there is no guaranteed way to avoid forex fraud, it is possible to minimize the chance of becoming a victim of a forex scam, and prosper in the market. What is the point of opening a forex account if the funds we deposit will be unsafe with the broker? It is self-evident that a beginning trader should only risk the amount that he can comfortably afford to lose. In that sense, the initial deposit requirement of the broker should never be more than what we can afford. First try with several demo accounts and do your own thing.
FOREX fraud is a growing problem, making for many the foreign exchange a negative-sum game. Though there is no guaranteed way to avoid forex fraud, it is possible to minimize the chance of becoming a victim of a forex scam, and prosper in the market. What is the point of opening a forex account if the funds we deposit will be unsafe with the broker? It is self-evident that a beginning trader should only risk the amount that he can comfortably afford to lose. In that sense, the initial deposit requirement of the broker should never be more than what we can afford. First try with several demo accounts and do your own thing.