Today, is plenty of Forex Brokers on the web: just google “Forex Broker” to see how many results you get. Unfortunately, among these results, probably you will find a lot of Shady Forex Brokers or even Forex Broker Scams.
Full of Forex Broker Scams
Scammers, as you probably know, are everywhere: specially in business where they can scam people with ease and at the same time, they can do a lot of money from their scams. It’s easier than you might think to “open” a Forex Broker today, especially if the purpose is to scam Traders. We will divide these Brokers into three different categories: let’s dive into the third one for now.
Shady Forex Brokers
Lastly we have this type of Broker, one of the most deceitful Forex Broker that can exist. It’s very difficult and in some case, even almost impossible to recognize a Forex Broker like this one. Why? Because this type of Broker, will look perfect from outside… and even from inside.
First: the reviews. There will be a lot of positive reviews about these Brokers, and few really bad reviews. The other reviews will be mixed, but always positive. By only reading the reviews, you wouldn’t be able to say with accuracy “This is a scam!”. You will have to dig deeper and deeper, reading different forum discussions to, probably, discover the truth about them. Because these Forex Brokers, are “scam artists”: they are able to scam their clients in different ways and without letting them notice it or realize the fact that they have been scammed.
Sometimes these Brokers, have thousand and thousand of clients, most of them happy. Happy because they are really happy or because they are fooled by the Brokers and think to be happy (Whereas they have been scammed somehow). These Brokers won’t never scam all of their clients: just a part of them. Which? The ones that will earn more (The big fishes) and thus will generate to them the biggest losses. But beware, by scamming we are not saying that they will just freeze the accounts of these successful clients or just opening random positions with their money.
They would never do something like this: they have a reputation to defend. So, How can they do it? Easy. They will create troubles only to these successful clients, as connections issues, delays when they have to open/close a position, higher charges/spreads and so forth. They can even freeze some currencies during the most profitable time of the day (Only for these clients) so that they won’t be able to trade and earn more money.
Saying in other words: they will work as the Casinos do. How? Never been to a Casino? Do you know what type of clients, a Casino would like to have? The ones that always lose, the newbies, the tourists and so forth; or at least, few clients that win but win small amounts of money. Whereas, they will do everything that they can do to send far far away the successful clients (As by “kindly” suggests them to leave the Casino immediately).
In the same way, these Forex Brokers will work. For this reason, being the majority of traders not successful (It’s not the place to debate about the data: it can be 99%, 95% or 90%: the fact that matters, is that the vast majority of traders is not successful), there will be only few clients to “kindly” send away. Whereas the other will always be happy clients, leaving good reviews and even suggesting the Broker that they are using, to friends and other people. Until they do not become one of the “Big fishes”, a successful trader and thus, a problem for the Forex Broker.
How to avoid these Brokers? As said before, it’s almost impossible to recognize these types of Forex Brokers. Reviews are mixed and the vast majority of them would be positive one. Yes, there would be negative ones but remember this: it’s true that you can pay people to make good reviews on different websites/forum, but you can pay people to make bad reviews for other Brokers too. Reviews are a tricky factor: normally they can give you a general idea of how the Broker’s reputation is. But you can be 100% sure of the reputation of a Broker from just reading reviews on websites and forums.
For this reason, we would suggest you to contact directly the Broker through the customers support, see how much time they need to answer to your request; read carefully the contract agreement when you open the account, if you really want to accept their welcome bonus, you should read very carefully the policy for the bonus; search on Google for the company behind the Forex Broker (The best thing would be having the name of the CEO or of someone that works for the Forex Brokers); deposit a small amount firstly, try to do some withdrawals and see how they go; see if they are more interested to your money or to you as a trader; and so forth. The best advice that we can give to you is to use your brain (As you always should) and always being careful.