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If you're looking for a good Forex broker for the first time, you have to be extremely careful. As the Forex market isn't regulated there are plenty of Forex broker scams.
The horror stories continue to appear every day. And until the Forex market starts to be a regulated market like stocks or futures markets, you need to do a solid research on any broker, before you send them any money.
There are several things that you should look at in order to avoid opening an account with the wrong broker.
Some Forex brokers trade against their clients. So, when you're buying for example EUR/USD the broker is taking the other side of the trade (they are selling EUR/USD). As a result, these kinds of brokers tend to manipulate prices in order to scare you out of your trade. In some worse case scenarios I've seen traders complaining that some brokers didn't fill their orders when they were in a winning trade. When they were losing money, the broker executed their trades in a matter of seconds.
Some brokers are from 3rd world countries. Usually this kind of broker isn't regulated anywhere. So, if you send them money, you can forget about the safety of funds. More than once I've seen people trying to withdraw money from their account, while the broker doesn't even answer their emails or calls. Some of these brokers have open offices in Switzerland so that you can trust them. Be extremely careful with where the broker is based.
Some brokers make their trading platforms freeze during key economic events. This makes impossible to a trader to exit a position. If a broker can't offer you a stable platform, you shouldn't use it.
Forex broker horror stories are all over the place. In order to protect yourself you should choose a solid and reliable broker based in USA or in Europe. This broker must be regulated and offer you easy withdraw conditions.
With all of this you need to be extremely careful when you're choosing a Forex broker. You must read everything you can about that broker. Make sure it's a regulated broker based in US or Europe. If you have any questions about them, make sure to contact them so that you know exactly that your money will be safe with them.
Besides this, you may also consider to search for broker reviews on your favorite search engine. Reading reviews allows you to know Forex customers experiences with a particular broker. Are they glad with this broker service, or are they mad and feel cheated?
Try to understand the situation that led to a specific review. Sometimes you can easily notice if it was someone that was mad with his broker and has no reason, or someone that is simply telling good things about a broker because he works there.
Make sure the broker has enough money to avoid bankruptcy. If you're choosing a regulated broker this task is almost complete because that's one of the standards a broker must accomplish in order to be regulated. If not, you'll be in trouble to know exactly the financial stability of the broker.
The Forex market is a difficult market even if you're with the right broker. If you start trading with a bad broker, you won't have many chances to make money on Forex.
I hope you understand all the Forex brokers' risks and scams, and make a complete research about them before you send them your money. You'll be glad you've done it.
About the author:
George S. White is the editor at TopForexEducation. By visiting the website TopForexEducation you can see some of the best Forex trading systems and Forex trading courses on the market.
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