How To Protect Your Investment By Identifying And Using An Honest Online Forex Broker
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 where they are registered; is it in the FSA? Is it in NFA? Is it some other financial authority? Enter their live chat/mail support and ask for the link to their official registration page; if they won't give you that, it is very likely that they're not registered anywhere and it is a sign for you to leave the site right away.
When you've acquired the link, read the entire page thoroughly as sometimes there are cases where the broker registered as inactive member. For example: at the time I wrote this article, FXCBS is registered with the Dubai Gold and Commodities Exchange, but they're stated 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 NOW with one-time-offer or other means, but this is simply a trick so you do not have enough time to check out their company.
After you select your online forex trading broker, don't ease up yet; watch for these factors:
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. Support
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 may wonder why I don't suggest checking forums for thoughts regarding 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 other reason is there are always novices who would blame their broker for their loses and start posting bad things about the broker everywhere while the clients who have received good services won't even bother to post on forums. This is may not entirely 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" all over any forex forums.
Please note that I'm not against using forums for information source. I'm simply pointing that there are too many inaccurate information regarding forex broker in the forums, but if you are seeking other info such as trading strategies or discussing experiences, forums are a good place.
Choosing an online forex trading broker is a bit tricky and you may have to do some research, but the effort will be paid in the long run. Later when you've found one that can meet your expectation, all that you need is a dependable trading system and you'll have your earnings from the foreign exchange market in no time.
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