I’m sure you’ve heard it countless times before, that trading Forex is a scam. The reality is that Forex is a market that can be traded; however, those who do not do their research or those who are complacent are the ones who are most susceptible to scams. There are those who fear losing their money and believe that perhaps it would be wise to invest in traders who are experienced. Perhaps, maybe even following a copy trader (Read our Article: Trading Normally vs Copy trading – Why you shouldn’t risk YOUR CAPITAL with someone else) or signal groups.
There are also those who say that forex brokers are scams. So that is why we are here to make sure you don’t get duped by scammers and be turned into a sucker.
RESEARCH YOUR BROKER
Choosing a broker is one of the hardest things to do. The market is flooded with them. There are unregulated brokers, offshore brokers, and regulated brokers. So, which one do you choose? The answer here is that there is no wrong answer. The only factor you need to take into consideration is whether or not the broker can pay out your withdrawals. The best way to know this is to test out the broker for yourself with a low deposit that you yourself aren’t afraid of losing. If the broker can payout your withdrawal without any issues, then it is more than likely that the broker won’t be out of money any time soon.
The key indicator of a broker suffering from cashflow problems is one that has trouble processing withdrawals. However, also please be aware that withdrawals that are large in the amount may take time to process due to regulatory and anti-money laundering issues. Brokers whether unregulated or offshore must adhere to the basic principles outlined in AML policies.
On a scale of the most trustworthy brokers are those who are regulated by an international regulator. This regulator ensures that the brokers are adhering to international guidelines set out to curb money laundering and terrorist financing. It also provides a certain degree of peace of mind knowing that it won’t be easy for the broker to close down and run off with client’s money. However, that does not mean that a regulated broker is immune to closing down. The reality is that any broker facing cashflow problems may close down eventually. Does it mean that it’s a scam? No, it doesn’t. It simply wasn’t a successful business.
RESEARCH YOUR SIGNAL GROUP
There are lots of signal groups on the market. They are there to help traders find an entry point into the market or help solidify an individual’s analysis to enter the market. However, there are many cases of individuals being scammed or ripped off by signal groups. Some signal group owners may charge for their signals, and whether the signal performs or underperforms is the risk. Regardless, the groups make money for themselves.
The key indicator of a signal group that is trustworthy is one that shows that they know what they are doing. They will provide an outlook, forecast or analysis of sorts when providing their trading signal. Otherwise, they could just be making up signals up and no one would be the wiser.
RESEARCH YOUR COPY TRADER
Thinking of copy trading as your answer? Think again. Statistics indicate that over 80% of traders lose in the financial markets. So why would you give yourself an over 80% risk of losing from the get go. Empower yourself and learn to trade. Forex takes time and practice, but you will never have the power you have if you copy a trader. You will never be able to minimize a risk for yourself.
Want to know more about why you should research your copy trader? Read our article: Trading Normally vs Copy trading – Why you shouldn’t risk YOUR CAPITAL with someone else
KNOW YOUR STUFF
When you know what you are doing, you won’t need a signal group or a copy trader. All you will need are the tools and knowledge that you have to ensure your own success in trading the foreign exchange market. You won’t be fooled by individuals looking to make a quick buck off of you. Whether they throw around terms like “ECN account” or “STP” or “Market Maker” you will be better off on your own. While no one wants to lose in the market, no one can confirm or deny whether or not these guys are losers; but, you yourself will be able to know whether or not your are a loser or a winner.
”Luck favors those who are most prepared.” – Napoleon