As we all know that the Forex market is full of scams and including the scam brokers. However, the Forex market is now started to get regulated by different countries after reporting a huge number of Forex scams and now there are many regulatory bodies working towards the betterment of Forex market worldwide.
We all know the importance of a good broker. Whether it is Forex trading or stock market trading or investing, every investor or trader needs a good and reliable broker to execute their orders on time and give them the opportunity to make money out of the market. But there are many brokers who are in the market not to serve the client but to scam them by doing unethical practice.
In this blog, we will try to educate our valuable clients to help them in selecting a good and reliable broker to trade with. We will explain a process of selecting a broker including the steps to identify a good and a bad broker to help our client in making the final decision regarding the broker selection before depositing the money with them. As a broker plays a very important role in the trading success and if you end up depositing your funds with a bad broker then it might result in a loss of capital because a bad broker can make profits generation nearly an impossible task for traders.
Broker Research to Protect Your Funds
Protecting your funds form an unscrupulous broker in the very first priority of every trader and to do the same a trader or investor should follow below-given steps which can help them in selecting a good Forex broker.
Reviews and feedback of brokers
Searching for reviews and feedback from past clients online is always a good idea. It gives you the insights and hidden information which can help you identify the flaws and wrong practices of the broker.
An in-depth and open-minded internet search about the reviews of the broker can give you the insights about the broker, but you must do it with an open mind as there is a possibility that a negative comment is posted by a disgruntled trader who made losses himself but blaming the broker for his losses or it is from someone more serious.
A good and reliable source of this type of information is BrokerCheck from Financial Industry Regulatory Authority; in this, you can find all the legal details about the broker which includes the details of outstanding and ongoing legal actions against the broker.
Easy and trusted withdrawal process
This is the second and most important step in identifying a scam broker or a good broker. An investor should always make sure that the fond withdrawal process is easy and transparent and there are no complaints about not being able to withdraw funds from the broker from a client as this can clearly state whether the broker is a scam who just want to take your money away or a genuine broker.
To ensure a smooth transition of funds and easy withdrawal process an investor should always read all the related documents and fine prints carefully before opening an account with a broker to get a clear understanding of all the contingencies regarding fund withdrawals.
Start with a mini account
After going through all the above mentioned steps if you are satisfied with the results you get form your research about the broker, you should not jump in with all your funds instead you should open a mini account or an account with a small part of your investment with the broker and start your trading with this small amount of capital only. You should trade with this small deposit with the broker for at least a month and after that, you should request for the withdrawal of the fund to check all the process and time the withdrawal process takes or whether the broker is letting you withdraw your money or not. And only if everything has gone well, then you can deposit more funds with the broker as it is much safer now after all the testing and research.
But on the other hand if you have faced problems in withdrawing funds or in executing your orders with the broker, you should attempt to discuss the problem with the broker and if they fail to give a satisfactory reply and unable to solve the problem you should post a review about this scam broker to educate others as well.
The Bottom Line
Forex is a very huge market and unfortunately a very open and unregulated market which attracts thousands of new traders on a daily basis. These new, as well as old traders, constantly search for a good and reliable broker to execute their trader and help them make money out of the market, but that doesn’t happen every time. There are many scam brokers who are active in the Forex industry and it is becoming more common nowadays to get stuck with a bad scam broker.
To save your investment and trading funds from a scam broker a trader should study and conduct an in-depth research on a broker before opening an account with them. If a trader follows the above-mentioned steps before opening an account and depositing the funds with a particular broker, every trader can reduce the risk of getting into a scam broker.
By getting a positive outcome of the research conducted on a broker and ensuring a smooth and on time trade execution and a transparent fund withdrawal process by opening a small account with that broker a trader can reduce the risk of blocking their investment with a scam broker which helps them in making money out of the Forex market.