Let’s face it: the Forex Business, sadly, is plenty of scammers. Nowadays, specially for Novice Traders is easier than the past, to fall into forex scams and then being scammed by a dishonest Forex Broker. Not only: for the scammers, it’s easier than you might think, to open a Forex Broker online and then to create a “good reputation” for the Brokers, to lead people to their website and then convince them to create an account with them.
As we have explained in this article, there are different types of scams. Being able to recognize a scam, depends a lot on the scam that we are facing. Sometimes we may say just from the first look, that a certain Forex Broker is a scam. Whereas, sometimes it can be really hard to recognize it as a scam: it can even be possible that we won’t be able to say “It’s a scam!” until we get scammed.
Thus: how can we recognize a scam, as fast as we can? Or at least, before we decide to open an account and do a deposit with our money? Not an easy question. Today there are so many ways, to make look a website as a trusted one and to quickly create a good reputation for the website too.
The first thing from where you can recognize if the Forex Broker that you are seeing, is a scam or not, is from the layout of the website, the graphic of the website and the look itself of the website. Does it look like nothing special? Or does it seem a “professional” website or not? Just from these questions, you can have a general idea about the Broker with which you will deal: a Forex Broker that has a good, responsive, well-crafted and good-looking website, has less chances to be a Scam. Because to create a website like that, the company (Or people) behind it, had paid for sure a lot of money. Or at least, more money than the average. Whereas normally, Forex Brokers that are “genuine” scams, don’t care too much about their website: they just want to have a website that works and nothing more.
Of course, this is a way through which you can have a first and general idea about the Broker. You have to dig deeper to understand if it is a scam or not. We would never stop stressing the following fact: use Google or any other search engine, to search reviews and opinions about the Forex Broker that you have found. It is really important. The most you will know about a Broker, the less the chances that you will be scammed. Reviews are like gold or even better. Through reviews, you can know almost everything about a Forex Broker: how it works, if the customers support is good or not, how much fast are with the withdrawals, if the platform is good, etc… . You will get all these information, without even creating an account with that Broker.
This is perfect. So we will just have to read reviews and we are done: the problem is fixed. We will never run into a scam. Well, to be honest… no. Not everything that glitters is gold. Reviews can be fake ones. The Forex Broker can hire without problems some people to write positive reviews on different websites and even forums. For this reason, beware of the “5 star reviews” that say “everything is so perfect!” and look too much as advertisement and not a real review. The best thing to do when searching for reviews, is to read reviews posted on forums about Trading: there are a lot of traders that are registered to different forums, where they share their knowledge and experiences. They often leave reviews about the Brokers that they use. In this way, you can obtain honest reviews about the Broker. However beware of this fact: avoid to read the reviews left by users with just 1 post or less than 10 posts. Normally these reviews are left by people that work for the Broker: in fact just think about it. Why someone would register to a forum (A place where you can share your opinions/thoughts) to post just a review and nothing else? Because by doing this, he/she will earn something. As said before, a Broker can easily hire different people to leave reviews on different websites and forums.
We would suggest you, to not search just for reviews about the Forex Broker. But to search about the company that is behind the Forex Broker too. You would be impressed to discover how many precious information you can get by doing this. Where is the location of the main office of the company? Is located in a “tax heaven” or not? If it is not located in a “Tax Heaven” country, it can still be a scam. In fact, it is pretty easy to open a company in a country and then to choose the location of your main office to another one. Or simply, to hide the real country of your company and to choose another country, as a cover. Search for the address of the main office of the company of the Forex Broker. From the address you can learn useful information. In fact to have an address for your company, it is not so difficult: you can even have an address in a certain country by simply “buying” a virtual office. A virtual office provides communication and address services without providing dedicated office space (For a cheap price). You can recognize if the address is used by a virtual office, if there are more than one company registered to that address.
At this point, you should have gathered a lot of information about the Broker: you have read different reviews (On forums too), you have searched for the company name and for the address. You have even took a look to the website of the Forex Broker. What is next? If you are still not sure about the reputation of the Broker, just contact them through their customers support: ask a question or a clarification for a doubt. See how much time they will need to answer to your question and if heir answer is professional or not. You can even call them if you wish, to speak with someone that works for them (Here a tip: the more phone numbers available for different countries has a Broker, the less the chances that is a scam. It means that they have hired a lot of people, to manage their clients from different countries).
Lastly, if possible, we would suggest you to try opening a Demo Account if it is available: in this way, you can test the reliability of the platform of the Broker. After that, if everything seems fine, you can open an account. We suggest you to deposit a small amount at the beginning: do some trades, then try to do a withdrawal. In this case too, see if everything will be fine or not, with your withdrawal. Because if you will encounter problems with a withdrawal of let’s say, $100, you can imagine the problems with a withdrawal of $1000… . Our last tip is this one: avoid the Forex Brokers that ask you to deposit more and more money on your account. It means that they only care about your money and not about you, as a trader.