How To Recognize and Avoid Forex Scam Brokers
As you probably already know, scams now abound on the web. In binary world trading, many brokers turn out to be unreliable. You want to invest your money to increase it tenfold, but in the end, you win nothing, and you lose everything. But the fact that this kind of fraud happen frequently does not prevent trusted brokers from actually existing and enabling you to make a profit. The trick is knowing how to recognize forex scam brokers to avoid them, and then find the right one.
How Does The Forex Scam Work
After they convince you to trade on their platforms, the malicious and dishonest Forex broker allows you to trade like any other platform. And indeed, there is a decent platform with all useful features where you can trade and, when you win, you get your money in your trader account. The broker confirms that you’ve earned money. But the problem arises when you finally plan to pocket your real money winnings, you won’t be able to. You send a withdrawal request, but it goes unanswered. In some cases, you are notified that an additional deposit is required before you can make a withdrawal.
You then do as you are asked, but again, you increase the volume of your loss. Because from then on, you will no longer have any sign of life from the staff of the company. The Forex broker now holds your first deposit and the amounts you have invested in your transactions. However, you are powerless in front of this injustice because the Forex scam brokers have already cared to prepare. They are generally located in tax havens.
How to Avoid Forex Scam
The best way to avoid these Forex scam brokers is to educate yourself. Before signing up, do in-depth research on the broker in question, whether on its official website, in the forex related forums, or better, check with financial regulatory bodies in your country. Regulatory bodies list all unregulated brokers and those representing a risk. Since updated every couple a month, this list provides you with recent information on brokers to avoid. It includes brokers who have acted against market rules, those who are not regulated by financial institutions, and, of course, scammers. Be aware that some brokers, even registered on this list, are not necessarily crooks. However, they remain not recommended, since they could lead you into too risky investments.
Meanwhile, other brokers have already been on the list, but have been able to return to the market with new offers and new trading procedures. However, most of them are not highly recommended, given the bad experiences of other traders.
In any case, the important thing is not to be fooled by appearances, but to dig a little deeper. Only official lists are reliable because even in forums, it is possible to find fake testimonials.
How To Find The Right Forex Broker
But if you can avoid forex scam brokers by consulting blacklists, then how do you find trusted brokers? Recognizing a reliable broker is not that difficult. After checking that it is not in the famous blacklist, take a look at its regulation. A regulated broker automatically means a guarantee of security for you. Regulation involves regular checks of activities, as well as state-of-the-art security systems. A regulated broker is subject to strict rules and must, in particular, save all your data throughout your transactions.
Also, don’t forget to check broker reviews to ensure that you are dealing with a regulated broker. Although you may stumble upon paid reviews that aim to do the marketing for a specific Forex platform, most of the reviews tend to be objective and, therefore, useful.