Even with forex brokers becoming more regulated, there are still plenty of brokers that are willing to scam and rip you off. Forex Brokers like these work against your benefit thus making profitable trades even harder. How can you protect yourself from being ripped off by scam Forex Brokers?
Here are 5 signs to look out for now.
- Regulated Broker or Not?
If your broker is unregulated, there is no way to protect yourself from slippage due to server malfunctions or if they steal your money by not processing your withdrawal. If this happens, there is little that you can do. To check if your broker is regulated, see if they explicitly warn about the risks in trading CFDs. Next, did they post where they are located and their address? Finally, they should have a regulation number posted which is authorised by a trustworthy regulatory body. Each country has its own and examples of these include, FCA – United Kingdom, ASIC – Australia, FSA – Japan.
- Bad Communication
Is your broker responsive to your questions and concerns? If not or they give vague answers, this could be a red flag that your broker could be a potential scam. Communication between brokers to traders should display good customer service and are willing to help answer any questions and concerns in a clear matter. This is especially the case when a trader is unable to withdraw money from their balance and the broker must resolve such issues.
- Robot Scams
Brokers that offer the use of a bot, ai or algorithm and promise lots of profits are most likely scams. No program has ever been able to consistently generate huge amounts of profits automatically. If something sounds too good to be true, it most likely is.
- Cash Bonus on Opening Account
If the broker offers some sort of cash bonus for opening an account without giving out much detail, then it is likely to be a scam. These types of bonuses are typically not allowed as an incentive to create an account under the broker. Examples are $1000 extra for opening an account etc. Whilst there are a number of ‘reputable’ brokers that do this are scams however it is a common aspect of dodgy brokers.
Not all Forex Brokers are there looking out for your best interest and it is important to vet and review brokers. TradeProofer helps you find the best broker for your circumstance. We value finding no/low spreads and slippage from brokers and are out here to help traders have the best experience possible.