There are a number of scams that plague the forex market. While the number of forex brokers that are scams has decreased in recent years you will still find them on the market. It is important that you know how to determine if your forex brokers a scam or not. You should also know what to do if you are already using a broker that is a scam.
What is Fact and What is Fiction
A lot of forex traders will never make a profit and a lot of others are only going to break even. There are a very small percentage of traders that make a profit from the market. You have to keep this in mind when you read reviews on forex brokers. A lot of these losing traders are happy to place the blame for their failure on the broker, which makes it important to separate fact and fiction when reviewing a broker.
A lot of broker reviews have problems of the market turning once the trader had placed their position or their position being stop hunted. These are actually problems that all traders will face at some point and have very little to do with the broker. A lot of new traders are unable to separate their emotions from their trades and this leads them to feel that everyone is out to get them when they lose on a trade. This often relates to a bad review of a broker because they feel the broker was out to get them.
Protecting Yourself Against Scam Forex Brokers
It is important that you try to protect yourself from fraudulent brokers. There are a few steps you can take to do this:
- Read all the fine print when opening an account. Scam brokers often try and hide things in the small print to seem more legitimate. Reading all the small print ensures that you are not impacted by additional terms or conditions.
- Doing an online search for broker reviews is still a good place to start. Of course, you have to filter the results you get and determine which ones are based on poor broker performance and which are based on poor trader performance.
- Open a mini account to start with. If you have done research and are happy with the broker open a mini account first. These accounts do not require large amounts of capital so even if the broker is a scam you are not losing too much.
- Look for complaints about withdrawals. If you find a complaint about a trader not being able to withdraw their funds you should try and get as much information as possible about this.
What To Do If Your Broker is a Scam
If you already have an account with a bad broker then your options are very limited. You should read through all of the terms in your agreement with the broker again to see if there were terms you missed. If there are then unfortunately you only have yourself to blame. If you have certain problems try contacting support about it. You should be firm about what you want out of the resolution and what action you may take should the problem not be resolved. Try and be as polite as possible and do not come across as threatening as this will only make matters worse.