How to Avoid Forex Scams

Forex Trading has allowed many people in India and UK to become forex traders online, turning the forex market to be one of the most appealing market globally.

 However as every online activity, every trader needs to be very careful deciding in which platform to open a trading account. There are a lot of trading platforms online, and some of them are not regulated. This means traders can be scammed easily if they don’t follow certain steps on their trading platform decision.

To protect against scams and to feel more confident when trading is very important to pay attention at the following steps.

REGULATED BROKERS ONLY

When finding which Forex platform to use, it is important to look carefully for the best ones to use and to check that they are regulated.

A broker is regulated when its entity has been officially registered by at least one of the worldwide forex regulation authorities:

  • Cysec
  • FBA
  • FCA
  • ASIC

These are some of the main ones. Then for every country there are internal regulators. The most important entity is Cysec. If a broker is registered by them, it means it is secure to trade with.

So if the broker is not regulated by one of the main authorities, do not use them! To ensure that you find your best trading platform make sure that they’re regulated.

Trading with a regulated broker means you will be able to withdraw your money whenever you want.

RESEARCH YOUR BROKER

As well as confirming that any Forex brokers are regulated, it’s also important to do some online reading.

Online there are a lot of accurate broker reviews. Usually each review covers the deposit and withdrawal system, demo account, regulation, client assistance and platform usability.

For example here there are some reviews of the best trading platform UK.

Specifically talking about scam and regulation, it is very important to look for users reviews of their withdrawal requests.

A regulated broker always allows traders to withdraw their money whenever they want. These platforms required some documents (proof of identity and proof of residence) to their traders in order to identify them and prevent any type a fraudulent use of the platform, for example money laundry.

Once a trader has uploaded those documents, he is entitled to withdraw his money every time he wants.

This means that the main difference between regulated and scam brokers is the possibility to get the money back.

READ THE SMALL PRINT:

Like every term&condition signed online, it is very important to read the small prints in it. This is like a contract between the broker and the trader.

Usually in those conditions are written the rules to trade and withdraw the money.

If a broker doesn’t provide a Terms&Conditions, it is a sign o scam.

DO THE DEMO ACCOUNT

When beginners want to start trading, every regulated platform offers a free demo account.

A demo account is a trading account where people can use virtual money to train and learn how to trade.

Every broker offers one.

Usually a demo account comes with a sum of 10.000$ virtual money which can be used for how long it is required to.

INTUITION IS THE KEY

Go with your gut intuition.

If an offer sounds to good to be true, it probably is. So maybe avoid it.

An example are the 100% guarantee gain. This is something impossible in forex trading. An other sign could be the fact that a broker calls potential users to make them sign up to their platform.

If this happen it is a sign of scam, and it is suggested to avoid any registration.

The world of online trading can be very profitable, but potentially dangerous. Online scams are in every sector at the moment, but if you pay enough attention you can avoid all of this and find you regulated trading platform.

It is also important to remember that there are also reputable and regulated brokers out there too, so any potential traders can still find the best forex broker that fulfills their trading needs.

Image Credit: Scam via Imagentle/Shutterstock

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