Forex Broker Scams: How to Identify them
Research Forex Broker Scams
When you are looking to start trading forex, it is important to do your research and know how to identify forex broker scams. A quick internet search on forex broker scam, will send shivers down your spine. It’s shocking!
The bottom line is to do your research properly to avoid falling into one of these scams. It is important to identify brokers that are reliable, viable and regulated; and to avoid the ones that are not. Before depositing a large sum of money, you must go through a series of steps.
Fact from fiction
If you only look at forum posts, articles and review websites on brokers, you will think that all broker companies are scams or all that all their traders fail and never make a profit. These types of traders that fail to make profits will post it online and blame the broker for their own failed strategies.
Traders mostly complain about the fact that the broker was intentionally trying to cause a loss; in their opinion. These types of situations are common among traders and most of the time it is not the brokers fault.
The biggest thing you as a trader can do to make sure you are dealing with a legit broker; is to always keep the communication channels open. The communication between a broker and trader should never break down. You have to start seeing red flags when you are not receiving responses from your broker or when your broker is providing you with vague answers.
Conduct Research to protect yourself
- Do an online research for the broker you are looking to use. Start with a generic internet research to at least see what pops up.
- Make sure there are no complaints about not being able to withdraw funds.
- Read through all the fine prints and documents that are available online on the brokerage.
- Make sure the brokerage is regulated (FSCA, Cysec, FCA).
If you are satisfied with your research, open a standard account and deposit the smallest amount of capital possible.
As an authorised financial service provider it is very important to maintain your license. We at Khwezi Trade (FSP Number 44816) would like to ensure all our clients that we follow all the required procedures from The Financial Services Conduct Authority (FSCA).
Consumers can check whether a company is authorised to conduct services and is licensed and registered on the regulator’s website, www.fsca.co.za or through their toll-free number, 0800 110 443.