Statistics indicate that the Forex market is trading more than $1 trillion per day. Add to this all currency options and futures contracts, and the amounts could be another couple of trillions traded on any given day.
The International Exchange Committee of the Bank for International Settlements, in one of its latest reports, indicated that it is feasible that the overall amount of Forex-related transactions was around $3.0 trillion. With this amount of capital floating, Forex scams can only increase with the fascination of earning fortunes in limited amounts of time.
Many of the old prevalent frauds have decreased, forced to serious enforcement measures by various regulatory bodies and quality brokers such as the ratings of the FXPro broker to set an example. Despite having on hand the best brokers, many scams still exist, and new modalities emerge every day.
Good vs Bad Forex Broker: How to Know?
So, question by question is how to distinguish a good Forex broker? First, you must know the main characteristics of the best as listed below:
It is the initial and most significant thing to investigate in a Forex broker. After all, you will be making a deposit, and you should be able to entrust your investment to this company. A Forex broker is solid if it operates under a license granted by a regulatory body.
2. Operating costs
Forex brokers generally generate their profits through spreads and commissions. Therefore, before registering for the services of one of them, you must confirm the transaction costs and commissions.
4. Banking Options
Provide a wide range of deposit and withdrawal methods so that operators can make deposits and withdraw profits easily and safely, without problems. Forex brokers have deposits to simplify trading for traders. So the best of them make it as easy as possible for traders to withdraw their winnings.
5. Trading Platforms
Forex trading is done on the trading platform offered by the Forex broker. Therefore, before registering, traders must ensure that their broker’s trading platform is stable and accessible to use. Operators should also show if there are features such as graphics tools, technical tools, news, etc. In other words, the platform must include all the information and tools necessary to carry out a successful operation.
6. Customer Support
The online Forex broker must offer excellent customer support, preferably 24 hours a day, seven days a week. Customer service agents must be accessible, friendly, and helpful.
Forex Scams You Should Know About
After knowing the information presented above and having some knowledge when choosing, it is significant to know some of the most common types of scams and thus have a point of differentiation, such as those listed below:
1. The old Forex scam
It was founded based on computer manipulation of supply and demand spreads. The point of difference between supply and demand reflects the commission of a round trip transaction processed through an intermediary. These spreads often differ between currency pairs.
The scam occurs when those differential points differ widely between intermediaries. Brokers often don’t offer the standard two to the three-point margin on the EUR/USD, for example, but range from seven points or more. This scam has subsided in the past 10 years but beware of unregulated outside sales brokers or your home country. These trends still exist.
2. The Signal Vendor
The Signal Sellers are people who may be a retail company, a joint asset manager, a managed account company, or a private merchant who promises to market based on professional recommendations that will enrich anyone. They promote their long practice and business skills with the support of people who practically testified before a court regarding how great the person’s merchant and ally is, and the great fortune this person has earned for them.
All the unsuspecting merchant has to do is give you a number of X dollars for the privilege of commercial recommendations. Many of these people simply collect money from a certain number of merchants and disappear.
3. Scam in the Current Market
A persistent scam, old and new, occurs in some types of trading systems developed by Forex. These people tout the ability of their method to produce automatic parts that, even while sleeping and gain great wealth. Currently, the new terminology is “robot”, due to the ability to function automatically. However, many of these systems have not been submitted and approved by an independent source for formal review. This will cause unsuspecting merchants to do nothing but a gamble.
Although there are proven systems in the market, potential forex traders should investigate the system they wish to implement in their trading strategy.
There are other scams and warning signs when brokers do not allow the withdrawal of money from investors’ accounts, or when there are problems within the trading station. If you cannot withdraw money, the warning signs should flash. If the trading station does not meet its liquidity expectations, the warning signs should again go off.
With this information, as to what to expect and what not, you can be sure to choose your best Forex broker.