Forex Brokers – How to Avoid Getting Ripped Off

Luke Arthur asked:


Forex brokers are your gateway to the Forex market. The vast majority of traders in the market access it through a traditional Forex broker. While there are some quality brokers out there, many people have mistakenly chosen scam brokerages to open an account with at some point. If you are interested in finding the right broker, here are a few things for you to consider.

Regulating Agency

When choosing a broker, it is important to find out where they are located and who they are regulated by. For example, if you are checking out a broker in the United States, they will be regulated by the National Futures Association. You can then get on the NFA website and see the broker’s customer service history. If the broker has a number of complaints against them, you will know it instantly. Most of the time, if a broker has a lot of complaints from traders, you should probably stay away. When you use a broker outside the United States, you should find where the broker is located and then find out who regulates brokers in that country.

Reviews

Besides checking with the regulating agency of your broker, you should also check out some broker reviews. There are many resources online that will allow you to read about user’s experiences with brokers. Many of these sites allow users to rate each broker and you can see their cumulative score. When you are interested in a particular broker, it helps to be able to see what others have to say about them. If the general consensus is that the broker is a rip off, you should avoid them.

Policies

You should also do your homework and find out what types of policies the broker has. For example, you should read about the deposit and withdrawal procedures for the broker. If a broker only uses some obscure third-party processor to process payments, you should be a little skeptical. Most legitimate brokers offer a few different deposit methods such as a bank wire or PayPal. You should choose a broker that gives you a convenient payment method that you can work with.

Spreads

The spreads that each broker offers is also something for you to consider. The spread is the difference between the bid and ask price on a currency pair. When you place a trade, the broker keeps the spread and this is how they are compensated. You want to find a broker that has reasonable spreads when compared with others in the industry. You should be able to find information about their spreads on their website. You can also download a demo account and watch the spreads on each currency pair.

Choosing a Broker

In this section, we will feature reviews on some of the different Forex trade signals services that you can sign up for. We will only recommend a signal service if it has a proven track record and looks to be promising moving forward. Just like you, we do not want to pay someone for signals that they are generating with a psychic squid or some similar method. We would appreciate some actual technical and fundamental analysis behind the signals. Before choosing a Forex broker, it is important to weigh all of the factors involved in the process. There is no perfect broker in the Forex market, but you can find some very good ones. You need to decide which factors are non-negotiable and which ones you might be willing to bend on. Once you look at all the factors, you can open an account and get started making money.

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