If you're interested in Forex trading, there are plenty of brokers willing to take your money. A more important question for you is: Should you give it to them? Forex markets are becoming more regulated, but if you don't know what to look for in a broker, you could be scammed out of your hard-earned money. It's not just out-and-out thieves you need to watch out for; Forex trading for individuals is a fairly new investment opportunity, and many brokers aren't established enough to be trusted with your investment dollars. We investigate Forex brokers for you so you can invest with confidence.
If you've been the victim of a scam by a Forex broker, rely on our reviews of the top brokers in the world to avoid trouble in the future. If you're new to Forex trading, our reviews can help you find a full-service broker that you can rely on for both honesty and helpful guidance when making your first trades.
It's important to protect yourself from unscrupulous or undercapitalized brokers when you're making Forex trades. Our reviews will help your find solid brokers with honest business practices. With the uncertainty in today's political and fiscal climate, Forex trading is exploding in popularity, and new brokerages are being opened every day. That means you may have to make up your mind about a broker with limited information available to you. Here are some handy tips to help you avoid a scam:
People become very angry when they lose money, and it can cloud their judgment. Many reviews of Forex brokers use words like scam, fraud, and other over-the-top language that is a result of anger more than fact. Take wild claims made in reviews with a grain of salt -- whether they're good or bad. Look for calm statements of fact about a business that can give you a good idea what to expect when you're investing.
One common aspect of scammers is to plant good reviews online, or pay to have them planted. If every review that a broker receives has nothing but praise, be on the lookout for a scam. While it's possible that a great broker will have many satisfied customers, it's very unlikely that everyone will be happy with any broker, no matter how honest or capable they are. If all the reviews sound like the same person wrote them, you should ignore them.
If you see dozens, or even hundreds of glowing recommendations of a broker that don't mention any information about the trades themselves, that's another giveaway. Paid reviewers don't have any idea what they're reviewing, and simply say how happy they are. Look for egregious misspellings as well; they're an indication that freelance writers in third-world countries are writing the reviews for a few dollars.
Forex trading for individuals is fairly new, and it's subject to international laws that can be obscure, but it's not unregulated. The secret is to find the appropriate regulatory agency for the country that the broker is working from. Don't make the mistake many novice brokers make when they assume that the broker is subject to the laws of the country of the currencies they trade in. An American broker can handle a trade in Japanese Yen and Canadian Dollars, but the currency is irrelevant to how he is regulated. He still must comply with the trading laws and statutes of the United States. Look carefully on any broker's website to find out where they are trading from, and research their name at the appropriate regulatory body. Most everything is searchable online now.
Brokers use the promise of big deposit incentives to entice investors to sign up with them. It's tempting to simply shop for the biggest matching deposit, but that can turn out to hurt you in the long run. Bonuses are not free money, and the strings attached to them have to be understood fully if you want to avoid surprises later.
Be especially wary of brokers that offer very high incentives if you make very large deposits, but then have very low maximums on each trade you make. If there's a minimum trade threshold you need to reach before being able to withdraw your original deposit, they can legally hold on to your money for very long periods. That's a recipe for disaster if the brokerage goes out of business, and in any case, the money will be working for them, not for you, when it's in their bank account.
Many investors leave scathing reviews of brokers simply because they didn't understand the market they're investing in, and then turn around and blame the broker for their losses. Reputable brokers spell out their terms in black and white, and you should read everything before investing. If you're new to the markets, you should invest with full service brokers who can walk you through the process.
You can find out if others have had a problem with a broker by reading our reviews. Remember that people that have truly been scammed are sometimes reluctant to admit what happened to them out of embarrassment. Many claims of scams are simply disgruntled investors who lost money. The best reviews are generally from people who have learned by their mistakes, and are willing to caution others. You're much more likely to find out about problems people had with particular aspects of their trades in reviews, like withdrawal problems, unfair policies and procedures about slippage, and unfavorable stop order practices.
Investors that were truly scammed are much more likely to report their problems to regulatory agencies than in online forums. Scammers have even been known to post claims of scams from their honest competitors. You can always trust reports of scams from regulatory agencies, because they're investigated and reported fairly.