7 Facts to Check to Avoid Forex Trading Scam
Choosing forex brokers in the US can be a tedious and upsetting process for many investors. Knowing “what is forex trading” is never enough. The commissions and fees charged by forex brokers are needed to consider. However, it is important to make sure of the legitimacy of the forex brokerage company before starting forex trading.
- A broker that is regulated by a trustworthy regulatory body
There is no need to report an unregulated broker to a governing body. Any way of scamming their clients, whether glitches or malfunctions that cause severe slippage in their system, not processing withdrawals (stealing money) will be unfortunate. There is nothing to do aside from posting bad reviews online since these brokers have no legal authority to answer.
Be aware that some disclosures at homepages may seem to look like a regulated broker. There are warnings of risks of CFD trading and legal sections too. Have a further examination of the legal section as it may be a false claim of registration or license.
Check the authority of the governing body that regulates the broker. Verify its legitimacy by searching its registration number on the website.
- A broker that does not offer profits or rewards for opening an account
Brokers who make claims about the success rate or return of profits are a scam. Forex brokers should not promise any returns may be big or small. A broker that is promising to make money is a scam. Another usual scam practice is an advertisement of expensive cars that will be a giveaway to lucky investors.
A promise of a big return on money either a binary option or forex broker is a scam.
- A broker that does not offer a cash bonus for opening an account
This is usually in a promotional offer and clicking around to know further information will redirect to a sign up for an account page.
Promotional bonuses for opening a new account in most regulated regions globally are not allowed. United States is an exemption which is for US and Asia citizens only.
- A broker does not offer automatic trades or signals to guarantee profits.
A lot of scam brokers offer automated trading that claims to make money. It claims that robots trade-off signals to generate money.
No company has a way to consistently produce huge profits using automated or signal trading and even if they do, it will never be for free.
- A broker that has credible information.
A broker that has no information about its executive team, its location, and customer support is a scam. Do not sign up for an account if there are no honest reviews about the broker. Check for disclosure documents which contain broker information.
Stay away from a broker that does not have information such as the executive team, location of the business, corporate history, or any financial information and honest reviews.
- Verify the legitimacy of awards cited by the broker.
Scam brokers claim to have excessive awards. They purposely post fake wards from the past years since it is harder to verify than the newer ones.
There are times that the awards are from reliable media outlets, but it is fake. Real awards would have a clickable link and can be viewed or found via Google Search.
- Not all brokers who become a sponsor are trustworthy.
The final scammer trick to avoid is to assume that it is trustworthy because it is a sponsor of a club or professional athlete. A major sponsor paying for a name to be printed does not mean they should be trusted.
In conclusion, answering “what is forex trading” and knowing its strategies will not be enough. Protecting your hard-earned money should follow by choosing the best trustworthy broker.