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The Forex market is thriving: millions of people enter this niche in hopes of making significant profits, and dozens of brokers compete for new clients, trying to attract them with better trading conditions or bonuses. However, there are also many scams on the market, so traders should be very careful when choosing a financial intermediary. In this article, we explain how you can spot a scammer and what to check when you’re trying to understand whether you should trust a certain broker or not.
Is Forex trading legit at all?
First of all, many traders still consider Forex trading as a whole a scam. However, it is a perfectly safe and legit way to invest your money. While profits are not guaranteed (just like with any other financial instrument), you can still make notable profits here even with almost no prior experience. The market is pretty old and well-known, and many Forex brokers are supervised by huge financial regulators that make all intermediaries comply with the same strict requirements applied to banks. Of course, there’s always a small risk you can meet a dishonest broker, and that’s why you should learn how to spot one and avoid the most obvious Forex trading scams.
How to spot a scammer
The best way to spot a scammer is to check out the regulatory info of any broker you encounter. Make sure to check out whether a certain broker is well-regulated: if it is supervised by several regulators, it is most certainly a legit company. Don’t forget to check out the list of supported countries: even if your broker is legit, there’s a chance it’s not available in your country or prohibits you from trading specific assets such as options. Find out whether the broker is licensed: visit its website and try to find at least some legal information: fake brokers usually avoid providing any information.
Other users’ reviews are also a valuable source of information about any broker. Check them out and find out whether your broker has any delays in withdrawals or hidden fees. Make sure to compare the pros and cons of all brokers to find the best one. Finally, it’s a good idea to use common sense: if your broker promises extremely high profits without any risks or efforts, that’s most definitely a scam. While Forex trading is indeed a profitable endeavor, no financial intermediary can guarantee you profits with complete certainty since trading is inherently risky.