These days, most of us refer to online reviews prior to purchasing anything significant online.
From booking a holiday to buying that super sleek new TV, many of us look to the opinions of others prior to parting with any of our hard-earned money.
Sadly, not all services are scrutinised in such comprehensive fashion, and forex investing is a sector where scammers and fraudsters have been particularly able to thrive.
It seems crazy, given the amounts that people are willing to invest, that they aren’t doing their due diligence into the brokers that they are trading with. Simply assuming that a brokerage has your best interests at heart is dangerous indeed.
It’s interesting, because it’s not that difficult to explore whether a broker is to be trusted, in fact it only takes a few moments to do your research to see, at the very least, whether the broker is regulated and whether your money is safe should the worst happen.
Here are a few pointers to get you started:
Licensing and regulation
If you were planning to open a legitimate and trusted business, you would want all of the licences and approval that you could get your hands on.
Sadly, not all forex brokers have that same psychology, and many are happy to cut corners in order to start fleecing their clients.
It would be rude to name names, but there are some ‘soft’ regulators in the forex sector that are happy to dish out licenses to all and sundry. We implore you to check who has given approval to any broker you are considering using.
Where possible, stick to firms that are regulated by the leading authorities such as the FCA, CySEC or ASIC. That way, you are at least minimising the risk of investing with a dodgy operator.
The scammer list
Happily, some sites may have already done the hard work for you by publishing their own Forex scammer list.
This will reveal the brokers that have aroused suspicion and for whom question marks remain. It goes without saying that these are firms best avoided until a resolution is found.
Reviews and opinions
Even if you know nothing about a particular broker, take the time to read the latest reviews about them online. Within minutes, you will have a much better understanding of their areas of strength and, also, whether there are any grave concerns about a company’s ethics.
The forex investing community is a strong one, and traders are happy to help their counterparts by recommending brokers that are up to the mark and reviewing those that aren’t. Take this time served advice on board so that you don’t make the same mistakes as others.
Try before you buy
It’s not the ideal way to find out if a broker is a scammer, but if you do have any concerns about their integrity, then only deposit a small amount of your money with them.
Better still, see if you can open a demo account without making a deposit, so you can test their levels of service without the financial risk.
Frustratingly, an industry as popular as forex trading will always attract scammers and chancers, so don’t take any chances – follow the steps in this article and you will minimise your risk of falling foul of such a scheme.