The Forex market is so huge that it’s become a daunting task to regulate it. With over $6 trillion trading volume happening on a daily basis, this market poses a great potential to every inspiring trader and investor out there.
In Forex trading, transactions happen online, thanks to the internet. But this advancement has also paved the way for fraudsters to trick people into giving their hard-earned money – and this is a sad reality. When you’ve been exposed to Forex for a while now, you’ve probably heard about the scams surrounding it; scams that come in different forms.
How to find the best Forex company?
As we’ve previously discussed, you need the best Forex broker to access the Forex market. Brokers are like your gateway to trade currencies because they provide you the tools needed like the trading platforms. When you make a quick search of Forex brokers on the internet, you’ll find a long list of FX brokerage companies, which makes the task of finding the right broker a difficult task. How can you tell if a broker is legit, or just another bogus broker that tricks its clients?
In this blog, we give you some good tips on how to identify a fake Forex brokerage company.
Explore Online Forex Forums and Review Sites
As online Forex trading progresses, so are the scams. And that’s what Forex forums want to combat. Such forums have emerged to help traders, especially the newbies, a spot not just fake brokers but also fake FX signals providers and expert advisors.
Forex forums are where traders from all over the world come together to help one another. And you should take advantage of this too! Explore different Forex-related forums to read Forex broker reviews and see which brokers have more positive feedback and those who have more negative reviews. Of course, it will only make sense to stay away from brokers with negative reviews and only entertain those 4 or 5 starred Forex brokers.
Forex broker review sites also have a unique feature that allows you to compare two specific Forex brokers and see how they match. Let’s say you have two brokers in mind that you’d like to trade with, you can compare these two brokers and see which one is better for every feature – spreads, execution speed, leverage, and even regulation.
Check the Broker Website
By merely visiting a Forex broker’s website, you can tell if something’s fishy. If you find errors in a certain broker’s website, say for example some typos or grammatical errors, it can be a sign it’s not run by professionals. This isn’t to say that they’re complete fraudsters; what we’re just saying is that a legit broker can afford to have their website done professionally to make it a pleasant-looking website.
Furthermore, look for the management names and their bios. If a Forex broker can be trusted, it will provide details about the people who run the company. It will also help you identify their credibility by looking at their bios on search engines or even LinkedIn. Now if you’ve tried hard enough but still couldn’t find the people behind a broker, then maybe it’s a sign that you should never engage with them.
Look Out for Regulation
Last but definitely not the least, look out for a broker’s regulation. A trusted and safe broker maintains a unique license identification number that traders can search directly on the broker’s regulator’s website. Some of the well-known Forex regulators include the Financial Conduct Authority in the UK, National Futures Association in the U.S., and Australian and Securities Investments and Commission in Australia. If a Forex broker is regulated by any of the mentioned agencies, then it’s more likely a company that you can entrust your money with.
Regulation is arguably the most important thing you should look out for. When a Forex entity is regulated, it means it strictly adheres to the guidelines and rules of the authority that oversees its activities. This ensures that your funds are in safe hands.
Before jumping into real trading, we recommend that you follow the three tips mentioned above. You should know by now that Forex trading itself is risky, and what makes it riskier is that there are companies and even individuals who will try to trick you into investing your money. Thus, due diligence is needed.