Posts Tagged ‘Doing Research’

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

How to Find a Reputable Forex Broker

Jon Arnold asked:

One of the easiest and quickest ways to find a Forex broker is by contacting your local licensing authority. They are responsible for issuing brokers their licenses so that they can be in business. If a prospective broker does not have a license, avoid dealing with them. Avoid the scam artists who pose as brokers and offer fantastic deals that sound too good to be true. Start out cautiously so that you don’t get taken advantage of before you get some experience.

Brokers Build Reputations

Good or bad, Forex brokers build reputations that can be uncovered either by doing research online, by word of mouth and by contacting governing authorities to see if any complaints have been lodged. You can also consult other traders to see if they have any recommendations that you can research to find a good broker.

Protect Yourself

The Forex broker you decide to deal with should have safeguards in place to protect their clients. You will want to check and see if they are regulated and by whom. In addition, see what kinds of financial protections are in place against fraud and bankruptcy.

Take Advantage of Free Trial Offers

Many good Forex brokers will offer you the chance to participate in trial trading for free. This “play” money will give you a chance to see how the Forex trading system works without you risking any of your capital. If you profit, you don’t actually get any money, but it is a safe way to get your feet wet. Forex brokers will sometimes offer training videos and will work with you one-on-one to guide you to successful trading. Service and communication are essential, and through a free trial you can see how the prospective company treats customers and how they operate.

What Are The Benefits Of A Forex Broker

If you find that you are dealing with a reputable broker, see what tools they offer, their processing fees and trading advice pricing. Good Forex brokers will usually offer basic lessons to get you started, online trading and a DVD How-To guide that will teach you the business. As well, they should have a 24-hour customer service facility read to answer any questions.

Forex Broker Costs

Forex brokers should be able to quote costs in the beginning so that there is nothing hidden to slap you later. They should be fully transparent in their operations and costs, and many good Forex brokers will also offer package deals for frequent traders. When asking questions, listen carefully to the answers. You should get clear, concise and trustworthy answers to your questions.

Comparing Forex Brokers

As it is with anything, some Forex brokers are better than others, so before settling with any one, it pays to do some comparison shopping. There are websites that have comparison charts about the larger firms that allow you to see snapshots of the pros and cons of their offerings. For the smaller brokers, you will have to build charts yourself in order to ascertain who is better to go with. Consider the fees they assess – larger broker typically assess larger fees, while smaller brokers frequently offer more competitive fees.

Forex Brokers and Trading Platforms

One thing that’s extremely important to consider is the broker’s trading platform, currencies traded and the differences between the bidding/asking prices and the spread. In order to figure this out, simply open practice trading accounts between the brokers you want to compare, and then look at the differences and similarities of offerings. Finding a good Forex broker can be straightforward if you take the time, get the best information and perform quality research prior to going with any of them. In the end, getting into the Forex market and finding a reputable broker you want to work with takes action. The sooner you get started, the sooner you’ll see a return on your investment. Why not get started today and start comparing.

So you think you can start FOREX Trading before gaining experience with a DEMO Account?