How to distinguish honest and scam Forex brokers?

In today’s era of Industry 4.0, online business fraud is rampant in various fields. Starting from a simple online store business to an online trading business, Forex scammers often do not offer real trading services. but only used as a cover to attract the attention of the victims.

due to fraudulent broker actions Many people view Forex trading as an illegal business. on the contrary, forex trading It is a legal activity that is legal in countries around the world, from the UK, USA, Japan, Australia to Indonesia. There are also many honest forex brokers.

Most experienced forex traders understand the existence of genuine and fake forex brokers. However, aspiring traders are often confused about how to tell the difference between honest and fraudulent forex brokers. This article will help you measure the credibility of a forex broker using practical tricks, let’s have a look.

1. Forex broker license check

Honest forex brokers should have licenses from official regulators. Forex regulators already exists in many countries So you just need to check the company profile or license information displayed on the broker’s website. Some of the top forex regulators are: NFA and CFTC in USA, UK FCA, ASIC Australia, JFSA Japan, CySEC Cyprus, BAPPEBTI INDONESIAand so on.

Sometimes, there are forex brokers that are not regulated and claim to be in the process of applying for a license. Prospective traders should doubt such claims. This is because the official regulator will not allow any company to Therefore, the classification of forex brokers according to their regulated status consists of only two groups: officially regulated forex brokers and forex brokers that no control

2. Don’t be fooled by the promise of high profits.

Do you know why so many people are attracted to scam forex brokers? One of the main reasons is because they dare to promise extraordinarily high profits. From tens of thousands to thousands of percent per year. In fact, real forex brokers only act as an intermediary connecting traders to the market. It’s like a real estate broker that connects home buyers and sellers. No business intermediary can guarantee sales and purchases end profitable for either or both parties.

All trading activities and investing in any business There is a risk of loss This applies to forex trading. stock trading even real estate investment or restaurant business Success and profits can only be determined by the perpetrators. That’s the trader himself. The broker as an intermediary is only responsible for serving traders orders. They are then paid in the form of commissions or spreads. Therefore, bona fide forex regulators prohibit regulated forex brokers from promising profits for traders.

3. Be careful with broker bonuses and promotions.

Scam forex brokers often try to lure traders with great promises and lucrative bonuses. For example, $100 cash bonus, 100 percent deposit bonus or free trading robots. They brag as if traders are just sitting around making huge profits in such a short amount of time. In fact, all of this is just a trap for prey. You will only be aware if you are having trouble withdrawing money from the broker.

Honest forex brokers always promise transparency. coupled with the convenience of depositing and withdrawing money They will not make excuses to complicate the withdrawal. But they try to make it easier for traders by responding to all complaints and requesting withdrawals quickly. Their promotional activities are limited to events such as trading contests. Prize draw for products Referral Refund or providing free analysis tools

read: Which is the best ECN or STP forex broker for traders?

4. Check the brokerage office and test the customer service.

in forex trading activities You will surely encounter technical problems such as disconnection. suspended platform Or just confused about how to deposit and withdraw funds from your account, the customer service (customer service) from honest brokers will respond quickly to your questions and complaints based on their working hours. Complex or difficult to contact answers

more clearly Honest brokers will not hesitate to include their full office address on their website. You can visit their offices in real time or check through Google Map. Conversely, fraudulent brokers will not dare to specify the exact address but the PO box or even the name of the country of domicile.

5. Check the testimonials from the broker.

One of the easiest ways to choose a broker is through a referral from a friend or family who has experience in forex trading. However, not everyone has access to such accurate referrals. If you need external references Try searching through the google online merchant forums. or social media website example forexfactory.com and forexeacarmy.com

An honest forex broker that has been around for many years should have a large number of registered traders. These traders are not silent. but actively vouch for especially in this age of social media. Both positive and negative broker testimonials should be transparently broadcast and displayed on the company’s Facebook or Twitter pages.

read: Best and Trusted Forex Brokers in 2020

However, you must be objective in evaluating the broker’s testimonials. There are traders who give bad testimonies to brokers even if they suffer losses due to their own mistakes. Fraudulent brokers often get not only the slightest bad testimonials. But there are still many complaints about failed withdrawals or withdrawals that have been cut into hundreds of dollars.

Conclusion

There are many ways to distinguish honest forex brokers from fraud. Here are 5 points to be summarized.

1. An honest broker must be officially regulated by a trustworthy institution. While fraudulent brokers are not licensed in good faith.
2. An honest broker will never promise great profits. While fraudulent brokers make profits to attract attention.
3. Honest brokers do not offer trap promotions and bonuses. while fraudulent brokers only facilitate at first. Traders will definitely find it difficult when trying to withdraw money from fraudulent brokers.
4. Honest brokers have clear office addresses and responsive customer service. Fraudulent brokers are often reluctant to include office addresses while slow customer service.
5. Honest brokers have a large number of traders participating. Few people complain about trading facilities. On the other hand, many traders complain about fraudulent brokers online. Especially in case the withdrawal fails.

Now that you know these points, consider evaluating one of the brokers you know. Is he an honest broker or a scam? Remember, do not rush to join any forex broker. without having to check first