5 Things To Be Wary Of When Working With A Forex Broker

A Forex broker is of great importance for you to be successful in the Forex market. Due to this, you need to be very cautious when hiring a broker. Here are some of the things that you need to be wary of:

Guaranteed Profits

If you come across a broker promising to give you 30% or 40% return in two months, chances are that the broker is promising something that he/she can't deliver. These claims of giving you massive profits are false and are tricks to lure you into investing your money with the broker.

Lose Recovery

It's common to find some brokers saying that they will help you in recovering any loses that you make in the Forex market. This is usually false. Remember that the Forex market is very risky and you may end up losing all or part of your money. To be on the safe side you should never trade an amount that you can't afford to lose.

Interbank Market

You will most likely come across some brokers who will try to lure you into trading in the interbank market so that you can get more money. You should never invest your money in this market as only speculative and short-term currency transactions are negotiated. In addition, unstable network of banks and large companies participate in these negotiations.

Performance Record

Before you make a decision on whether to work with a given Forex broker, you should ask the broker to give you his/her performance record. All reputable Forex brokers are members of NFA or CFTC; therefore, you should always countercheck the information that the broker gives you.

If you ask a broker for his/her track record and he/she fails to give it to you, you shouldn't invest your money with him/her. You should also avoid working with a broker who isn't registered with CFTC or NFA.

Comments

Users usually leave comments on the websites of the brokers. You should visit the comments section and read what different people have to say. If all the comments are positive, chances are that the broker is trying to play games with you. You should try commenting and see if the comment appears on the site. For ideal results, you should leave a negative comment. You should keep track of the comment and find out if it remains on the site.

Conclusion

These are some of the things that you need to be wary of when working with a Forex broker. As rule of thumb you should avoid any broker with questionable behavior.

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