The foreign exchange (Forex) market is one of the most exciting, fast-paced markets in the financial world. Every day, currencies from all over the globe are traded on this market. And every day, people lose money because they choose to work with illegitimate Forex brokers. In this blog post, we’ll show you how to spot a legitimate Forex broker so that you can avoid becoming a victim of fraud.
There are many Forex brokers out there, but not all of them are legitimate. Here are some things to look for when you’re trying to decide if a Forex broker is the real deal:
1) Does the broker have a valid license?
If a broker does not have a licence, it is not regulated by any government body. That means that if you deposit money with this kind of broker, you have no guarantee that you’ll ever see that money again. Make sure that the broker you’re considering has a valid licence from a reputable regulatory body such as the US Securities and Exchange Commission (SEC), the Financial Conduct Authority (FCA) in the UK, the Cyprus Securities and Exchange Commission (CySEC) in Cyprus.
What are the major regulatory authorities in the world?
US Securities and Exchange Commission (SEC)
Financial Conduct Authority (FCA)
Australian Securities and Investment Commission (ASIC)
Cyprus Securities and Exchange Commission (CySEC)
Investment Industry Regulatory Organization of Canada (IIROC)
Federal Financial Supervisory Authority (BaFin)
Dubai Financial Services Authority (DFSA)
2) Is the broker registered with the National Futures Association (NFA)?
If you are from USA, you need to look for it. The NFA is a self-regulatory organisation for the US futures industry. All US-based Forex brokers must be registered with the NFA. If a broker is not registered with the NFA, it should be considered suspect.
Read Also: How to Choose a Forex Broker?
3) Does the broker have favourable reviews online?
If you can’t find any information about a broker online, that’s a red flag. And if you do find information, make sure that it is from credible sources. A good place to start your research is on forex forums such as BabyPips or Forex Factory.
4) Does the broker offer 24/7 customer support?
If a broker does not offer 24/7 customer support, it should be considered suspect. Legitimate brokers know that their customers might need assistance at any time of day or night and they will be available to help.
Conclusion
Fence before entering into any agreement with a Forex broker. By following these simple guidelines, you can help protect yourself from becoming a victim of fraud.
