Over the last 10 years, the popularity of forex has rapidly grown, resulting in hundreds of new forex brokers and making it increasingly difficult to choose the right one for yourself. What happens when there are so many of them? Your fears might be right – some of them aren’t as genuine as they seem at first glance on their shiny web page.
Your first step in getting an idea about forex brokers, might be a simple Google search of “forex broker scams”. It will give you a clear idea of how many unfair and bad brokers are out there.
How do traders select a broker?
1. A trader that you follow referred it to you.
2. A friend referred it to you
3. You attended a webinar or a seminar and you heard there about specific broker
4. From add on internet
Those are most cases how you stumble with a broker. But how can you tell that you will be satisfied with that broker?
Forex Peace Army will get you the best clue about each broker. There you can learn is broker regulated and under what licenses. Read about their client’s experiences with them. And finally, see what grade each broker has, meaning what is an average rating that their client gives them. It is the most important source of information about each broker. But, don’t judge yet. Some brokers with bad reviews and a bad rating, are actually among the best. I even know a broker that is among the top 5 brokers Worldwide and has a very poor reputation on Forex Peace Army. So, consider Forex Peace Army just one of the ways to check up on your potential broker.
Trustpilot is another great place for checking users reviews and grades for your broker. Those 2 sites will give you a pretty good idea about what can you expect and is your broker “fishy”. If the majority of the reviews are positive, go for it. There will always be people who complain on the Internet or have had a bad experience because of their lack of trading knowledge, not because the broker was scamming them, so you may have to take some reviews with a dose of skepticism.
Forex Factory is among the most popular Forex Forums. There is a variety of financial threads and group chats. There you can learn all about different Forex Brokers, Trading Systems, etc.
Nothing can beat the word of a friend or a family member who is already trading, and have no personal interest in misleading you with false information.
This article showed you about all the ways how to verify if the broker is legit, with good benefits for the trader, or have some issues which will turn very bad for a trader. The worst option of course is to end up with a total scam broker.
So what are the signs of a bad broker:
– Recently established
– Not regulated
– Bad online reviews with a poor rating
Always remember that there are clients who will express negative opinions. Don’t get discouraged after reading a few bad reviews. Use all information available on all websites I mentioned in this article and make your conclusion. If you are a serious trader, time invested in a search for a right broker for you, will save you much time and money later.