• Forex Margin Trading How to Prevent Forex Scams 5 - Some Brokers are also Scammers

    read:2023/2/25 6:11:47


    Did you know that some cashback forex forextradingaccountsregister also scammers? Believe it or not, there are brokers who scam their clients forex trading accounts one of the ways they do it is by manipulating the buy/sell spreads The normal spread for brokers should be about 2 to 3 points, while the spread for scammers is about 7 to 8 points 7 points doesnt seem like much, but it adds up to a lot assuming the client pays 7 points per trade Imagine if he only made a few trades a day and put that and hundreds of other clueless If you add up the spreads paid by hundreds of other clueless clients, youre in the money! Another way is by trailing stops. Remember, brokers know where their clients stops are placed and sometimes they chase those stops, causing clients to trade off. You should choose a broker that is registered with a regulatory body in the U.S. Look for those who are CFTC futures agents (FCM) and forextradingaccountstype members Beware of brokers who are not regulated by the CFTC and NFA You should know that the CFTC and NFA were created to protect the public from scams, backdoor manipulation and oppressive trading practices According to the NFA website, there are 2,000 retail forex brokers Businesses and attorney accounts are not controlled by the new regulations except for those 2,000, there are only 24 registered member firms! Do the math, thats only 1% of all brokers You can check a brokers CFTC registration status and NFA membership status and their disciplinary history by calling the NFA hotline at (800) 621-3570 or visiting the NFA website to confirm broker/company information (BASIC) If you trade forex outside the U.S., youre in luck! Other countries also have regulatory bodies to protect the rights of individuals More about them later If the broker is not registered, or not regulated by any national body, dont put your money with them We warned you, so dont complain to us that you wont get your money back! Stay away from those unregulated institutions NFA is stepping up its efforts to educate investors about retail forex trading and they have created a Pulitzer Prize winning manual called, Retail Forex OTC Trading NFA recommends that you read it before you commit to forex trading Once you have determined that a broker is a member of a regulatory body, you need to start doing some research