Should you have learnt forex trading for a while, you should know that placing your money on a local forex broker that apply exceptionally high spread is a fatal mistake; place it in an online forex trading broker is wiser decision. Online forex broker has advantages over your local broker such as lower spread, zero commissions, and willing to facilitate different forms of automatic trading.
Of course, selecting an online forex trading broker is not as easy as comparing their benefits. Many of them are just dishonest brokerage whose only goal is drain your fund as quickly as possible and their common strategy is attract potential clients with sugary promises and benefits. In order to survive long enough in forex trading, watch for these in your online forex trading broker before making decision:
1. Registered in an Official Financial Authority
This is the simplest way to check them out. Ask their live support exactly where they’re registered; is it in the FSA? Is it in NFA? Is it any other financial authority? Ask them to give you the link to their registration page, if they can’t give you one, there is high probability that they’re operated without any government knowledge and that is a bad sign.
If you’ve got the link, read throughout the page; this is important because there is possibility that they’re not registered as an active member. For example: at the time I wrote this article, FXCBS is registered with the Dubai Gold and Commodities Exchange, but they’re listed as an inactive member there.
Additionally, you should check whether they blacklisted by any particular financial authority or not. For instance: both CySEC (Cyprus Securities and Exchange Commission) and UK FSA (Financial Services Authority) have issued warning against Forexyard.
Confirming their registration is an important step, but even with that you still can’t be 100% sure that they’re honest forex broker.
2. You Heard about Them via Incoming Offers that You didn’t Asked
Be careful if you know the forex broker via unsolicited fax or email, especially if they are:
– Sound too good to be true.
– Guaranteed returns; high returns signify high risks, so watch out for any promise that offer you high returns while keeping your money safe.
– Trying to have you send your money RIGHT AWAY with one-time-offer or other means, but this is just a trick so you don’t have enough time to check out their company.
Once you select your online forex trading broker, don’t ease up yet; watch out for these points:
1. Withdrawal Process
Deposit your fund always a smooth process, but you may not have the same leisure in withdrawal case. If your broker makes the process more complicated that it has to be, prolonging the withdrawal, or even ignoring you, then you’re in the hand of a scam forex broker.
2. How they Handle Problems
Usually, you’ll find their support staff is really friendly and willing to help for regular questions, but when bigger problem occur, you can see their real professionalism. If they keep giving you empty promise, keeping your money, or even completely ignore you, then they’re scam forex broker.
You might wonder why I don’t suggest looking at forums for thoughts concerning the broker, but I have good reasons not to do so. Forums are place where everybody can post their opinions, so it is very unlikely to find 100% unbiased argument there as a fake forex broker can pay someone to post fake positive reviews; on the other hand, their rivals can also post negative reviews to damage the broker’s reputation.
The second reason is there are a lot of incompetent novices out there who will always make excuses for their losses and blaming their broker is the first thing they will do; you’ll find many complaints from these novices in various forex forums and these complaints can be very misleading since usually the other traders who satisfy with the broker services won’t even bother to post positive review in forums. This is might not solely their fault; maybe it is connection issues at a bad time, but nevertheless you’ll read posts about “my broker cut the connection and my profit” and “my platform freeze at an important time” throughout any forex forums.
No, I’m not suggesting that you avoid forums when you’re looking for information. I’m just pointing that there are way too many misleading information regarding forex broker in the forums, but if you’re looking for other info such as trading strategies or sharing experiences, forums are a good place.
Selecting an online forex trading broker is a bit tricky and you may need to do some research, but the effort will be paid in the long run. Later when you have found one that can meet your expectation, all that you need is a dependable trading system and you’ll have your earnings from the forex market soon.