Scams involving forex brokers

Beware of forex broker rip-offs!

Some brokers, believe it or not, “steal” from their customers.

Manipulation of bid/ask spreads is one way they achieve this.

Scammers' spreads would be approximately 7-8 pips, while normal spreads between brokers would be around 2-3 pips.

Seven pips may not seem like much, but they add up quickly.

Consider a client who has to pay a 7-pi spread every time he trades. Consider what would happen if he only made a few trades per day.

You'd be raking in the money if you multiplied it by hundreds or even thousands of similarly dumb clients!

Stop hunting is another option.

Keep in mind that forex brokers are aware of where their customers' stops are placed.

They'll sometimes make a dash for those stops, leading their customers' positions to shut.

Thankfully, many, but not all, broker pranks are now deemed outdated.

These old scams have been clamped down on thanks to new restrictions from regulating bodies like the Commodities Futures Trading Commission and the National Futures Association.

A forex broker that is registered with a regulatory body is the best option.

In the United States, search for brokers who are both CFTC-registered Futures Commission Merchants (FCMs) and NFA members. Brokers who are not regulated by the CFTC or the NFA should be avoided.

The CFTC and the NFA were created to protect the public from fraud, manipulation, and abusive trading behaviors.

It may be difficult to tell the difference between regulated and unregistered forex brokers.

You can check a broker's CFTC registration and NFA membership status, as well as their disciplinary history, by calling the NFA at (800) 621-3570 or checking the NFA's website's broker/firm information section (BASIC)!

You're in luck if you're trading FX outside of the United States! Other countries, like the United States, have supervisory authorities that protect persons. They will be discussed in more detail later.

DO NOT DEPOSIT MONEY WITH A BROKER WHO IS NOT REGISTERED OR REGULATED BY ANY NATIONAL AGENCY. Don't blame us if you don't get your money back; we warned you!

Avoid companies that aren't regulated!

Don't be afraid to ask questions in our currency forums as well. Getting personal perspectives isn't a bad idea.