Have you ever wondered how you can distinguish a Scam Forex broker from a regular one? What are the elements of a fraudulent brokerage firm that can, with certainty, confirm to you that this is a fraud that needs to be avoided to the maximum?
In short, there are ways to determine if you are a real or fake Forex broker. But, above all, for those who are just entering the world of Forex, it is imperative to know its primary role. A forex broker is, formally speaking, a financial company or a service that allows traders to access trading platforms for foreign currency exchange.
To find a good and reliable broker, it’s crucial to read brokerage reviews, such as the LBLV Review from 2021. However, if you don’t do that, check its regulation, customer service availability, account features. So, there clearly is a high possibility that you will end up with a scam broker.
Therefore, we’ve provided you with helpful information about recognizing a scam Forex broker that will be more than helpful to you. Let’s get started with the first and most important tip, shall we?
Good Forex broker research will protect you as a trader.
To protect yourself from numerous unscrupulous Forex brokers, it’s essential to follow these steps:
- Online research for brokerage reviews is a must. For example, a simple internet search can provide you with valuable information such as negative or positive comments from traders regarding specific brokers.
- You should always check whether there are some complaints about not being able to withdraw your money. In case you encounter these complaints, you can always contact that user and ask him to share his experience with the broker of your interest.
- It’s crucial to read all the fine print of the documents once you are determined to open your account. Sometimes these documents can be used against the Forex trader when he is about to withdraw his funds.
- In case you are content with the research of a Forex broker, you should open a so-called “mini account” with a relatively small amount of capital. It’s advisable to trade it for a month or even more, and then you should try to make a withdrawal of your funds. If all goes without any problems, it will be pretty safe to deposit more funds. On the other hand, if you encounter difficulties, you should discuss them with the Forex broker. If that also fails, it’s your responsibility to post a detailed account of your personal experience for others not to fall into the same trap as you.
Unregulated Forex brokers are often scam brokers.
As a serious forex trader, it is imperative to check whether your preferred forex broker is regulated or not. Regulation is a guarantee that you are dealing with a quality and relevant broker who will not deceive you.
However, if your preferred broker does not have any regulation, you can be almost sure that this is a scam when you need to avoid it as much as possible. Therefore, as a US resident, ensure that NFA and CFTC regulate your broker to protect your capital. European regulators differ from country to country.