Posts Tagged ‘Customer Support’

How Forex Brokers Cheat Traders?

Gil BZ asked:

The Forex market has evolved a lot since the days before the retail Forex market existed. Every day a new Forex broker open up shop, and every day new Forex trader fall into their traps. That is not to say that every single Forex broker is a scam, that is simply not true. However, unfortunately, there are many brokers who take advantage of new traders by promising them things they cannot deliver upon.

Whether the broker is offering exclusive bonuses to open an account, extraordinarily high leverage with which to trade, or competitive spreads on the various currencies, many brokers make promises and then deliver nothing other than disappointment.

It is important that traders understand how the whole Forex broker thing works. Depending on the type of broker, it is a common occurrence for your broker to take the other side of your trade. What this means is that when you lose, they gain and so their best interest is to make you lose. Now, does that sound like a broker you want to depend on for customer support and a stable trading environment?

Some of the tricks a Forex broker will play on traders is execute the trader’s requests with a delay so that they gain from the late response, as well as other tactics to make the trading experience all that more difficult.

I am not even going to talk about the full fledged scams out there that actually take a trader’s money and do not allow them to withdraw funds after they made some nice profits. Sounds pretty insane but that is the unfortunate reality of the Forex market.

It is for this reason that reading Forex reviews and doing research before choosing a Forex broker is not al luxury, it is a necessity every Forex trader cannot afford to miss.

Make the right start with FOREX picking the right Broker

Regulated Forex Brokers

David R Bailey asked:

The Forex broker who is regulated is a member of a regulated financial authority. Meaning, that their corporate activity is checked and scrutinised, ensuring they observe a set of strict rules and procedures, put in place by the regulatory authority.

Forex Regulation means a Fx broker wishing to be regulated is required to adhere to a list of minimum requirements, at all times. The requirements are rules, such as keeping appropriate financial assets (ensuring the trading continuance of the Fx broker) along with adhering to rigid working standards and procedures set out by their regulatory authority.

Another important feature of Forex regulation is the requirement for the Forex broker to maintain a high level of financial records transparency. Comprehensive financial records are also a requirement – failure to produce timely records can result in termination of membership. The same penalties can apply when if the guidelines are not kept to.

Using a regulated Fx broker is the best strategy Forex brokers, who are regulated, have to stick to a set of strict guidelines; these have been created to safeguard and preserve the service levels expected by their traders and clients. Regulation also ensures the Fx brokers are held to account for action taken, to the regulatory authorities of which they are members.

It is important to note that clients’ monies are kept in a different place to separately held company funds. According to the regulations, clients’ deposited monies under no circumstances must to their money be used to prop-up the Fx broker’s operating activities – this ensures the security of clients’ money. Regulation offers further safety to clients should their Forex broker become bankrupt; creditors cannot be repaid using funds deposited into client’s accounts. The personal information of the client, the QA standards adhered to by the Fx broker, fraud prevention and customer support & help are also covered by the industry regulatory authorities.

Ensuring a Forex Broker is regulated Checking a Forex broker is regulated is easier than you might think. Due to past problems in the financial markets, each regulated Fx broker must display their regulation status, and other financial authority memberships they hold on their website. Using this information you can also gain an insight into the past performance of the Fx broker.

Country jurisdiction means each Forex broker is regulated by the local authority in their country. Dedicated regulatory authorities can be found in countries such as the UK, Euro Zone, USA, Japan, Australia and Switzerland. The Euro Zone Forex brokers and regulated by MiFID and CySEC authorities. In the USA it’s the NFA and Commodity Futures Trading Commission (CFTC) and Financial Services Authority (FSA) in the UK. By visiting the websites of these financial authorities you can easily read their regulatory standards.

It is not mandatory for Fx brokers to join more than one regulatory body Each authority mentioned will act to prevent fraud and unscrupulous trading practice. It is extremely importance though; that the Forex broker you use is a member of at least one regulatory authority.

Therefore, take your time when selecting your Fx broker, and ensure they are regulated. This means your chosen Forex broker will be adhering to a set of industry recognised standards, and in the worst case scenario (Fx broker becomes bankrupt), any funds deposited into your account are safe.

Either start right with FOREX or don’t start at all