Forex broker scams

Believe it or not, there is still some Forex Broker Scams out there. You can easily identify Forex Broker Scams by how they execute your trades.

If you notice that your trades always get executed late and with a different price.

Or your stop loss always closes with a different price(slippage), you need to make a serious research on that broker

I tell you, issues concerned with money are not easy. Even Judas,  Jesus’s friend betrayed him because of money and got Him killed.

So don’t feel so comfortable to think that because you said no to robots and trade signals, you are very safe.

I should bring it to your attention that some of the brokers in the markets are fake and cheats.

Before we learn how to identify Forex Broker Scams, Let’s first take a small recap on who are the brokers?

Who are the forex Brokers?

Forex brokers are firms that bring traders access to a platform that allows them to buy and sell foreign currencies.

They act as a middleman between you and the market.

The market comprises of other traders and the liquidity providers,(inter bank system).

In other words, if you want to buy or sell currencies, your broker matches you up with either a respective seller or a buyer in the market.

Each time a trader trades, the Forex brokers earn from spreads.

Spread is the difference between bid and ask price.

Unfortunately some brokers have the ways they manipulate the bid/ask spreads to make more money. These are the Scam brokers.

Forex Broker scams

As mentioned above, Some brokers manipulate the system, change the spreads and put big spreads.

Scam brokers intend to earn from a few points in spreads of the trades you take.

Normal spreads on majors can range from 2 – 3 pips. If it exceeds that, know there is some thing wrong.

Also, if you notice that your trades always get executed late and with a different price.

Or your stop loss always closes with a different price(slippage), you need to make a serious research about that broker.

Other brokers may hunt your stop losses. You set a stop and a few minutes in a trade, it’s ran over and then the trade moves back normally to your prediction.

This may however not be the reason for your stops closing pre- maturely. But in case you have some doubt, you should find out.

The fact that the Forex Market is a big global financial institute, it involves different people around the world.

However, the regulatory agencies may not manage to control the whole world.

Some countries have tried to set rules to protect the traders from scam brokers unfortunately others do not have such rules.

How do you avoid forex Broker Scams

You should choose a Forex broker that is registered with a regulatory agency.

This will earn you protection from the agency in case of any kind of fraudulent act.

In case the broker is not registered with any of the national agency, do not accept to work with them.

Make some due diligence and research and find out all the necessary information you may want to know about the brokerage firm.

Again, Work with a brokerage firm that is registered under the regulatory agencies. That’s the most important of all.

Let’s see now the list of the major regulatory bodies.