Anyone looking to start trading Forex must first of all choose a broker. They are the ones in charge of your funds and allowing you get into the multi trillion dollar market from your home or office.
In fact it is safe to say that they are as important as your trading strategy when it comes to trading the Forex market.
When you are looking for a broker to work with, there are a couple of ways you can go about it, first is by using a broker you know is being used by a friend or relative, the second is reading through reviews online and seeing what people think about a particular Forex Broker.
Sadly with the amount of money that changes hand in the Forex market, it is only natural for scam and deception to be present. This is why you can find scam brokers that are only out to gather client’s money and vanish into thin air coming out with a campaign whereby they pay certain people to fill the internet with positive reviews about them.
Unsuspecting victims read these ‘good reviews’ and sign up with these brokers only to find out that they have been scammed. On the other hand, image of good brokers are also tarnished by fake ‘bad reviews’. This leaves people hunting for new brokers in a dilemma.
To avoid this, only use brokers that are located in your country so you can walk down to their office if anything happens. If there are no brokers in your country then only use those that are certified by their host country. The certification must be verifiable otherwise, it holds no meaning.
Here are a few factors you can keep in mind when trading with a particular broker. If you witness any of these more than once in a month then you should consider changing your broker.
This is a scenario whereby your trades do not get filled immediately. Instead of getting filled, you will get a notification asking you to enter at a different price. If this happens when the market is moving fast, then it is not out of place but if it is rather frequent, it is a huge red flag.
This is another bad scenario where trades get filled at prices far away from where the trader made entry. It usually happens during fundamental releases or other high volatility periods. A slippage of 3-5 pips after spread could be ignored but anything higher is bad for your trade. Some genuine brokers will refund the trader if he or she gets affected by huge slippage but most scam brokers will not.
This is a scenario where your stop loss level gets triggered even though the market is yet to get to that point. This happens when a trader is in a trade with huge big funds and market price is getting near to his or her stop level. These scam brokers immediately manipulate a price spike that will trigger the closure of the position at a loss.
On checking other broker platforms, the trader would confirm that price never touched his stop level. If this happens even once to you, change broker the next morning and if possible, press charges against them with a captured screen shot of what happened.
It is hard to pick a trustworthy broker but many of them exist. It only takes a little bit of searching and carefulness to find them.