When it comes to trading, there are sadly plenty of potential pitfalls lying around every corner. From the risk that you’ll make a bad investment decision to the chance that a complex online broker structure will leave you confused, there’s a lot to think about. However, one of the worst potential risks is that of fraud: sadly, not all brokers are scrupulous. This article will delve further into what the problems with untrustworthy brokers might be – and how you can defend yourself against these problems.
Reducing fraud risk
Trusted brokers can come at a high cost, whether that’s recouped through spread fees, commission or some other sort of charge. However, untrustworthy brokers can also be pricey in the long term – especially if they con you out of your capital. Brokers that are unregulated or haven’t been reviewed can bring with them an enhanced risk of fraud, often because they can slip under the radar – potentially undetected – until it’s far too late.
Better features
There are also some other reasons why it’s wise to go for a trusted forex broker. A trusted broker is more likely to offer a range of features. Higher–end brokers might offer features such as MetaTrader 5, for example, which is a more sophisticated version of the standard MetaTrader 4 system offered by almost every broker on the web. MetaTrader 5 has extra features such as netting and additional indicators, so it’s well worth looking into whether you can find a trusty broker that offers it.
How to find one
Finding a broker that you can rely on is easier said than done. One way to do it is to ask friends and colleagues for recommendations, though this is far from foolproof. Another way is to head to a reputable website such as ForexFraud and read reviews such as this Trade24 review, compiled by experts in the field.
It’s also wise to spend some time checking out the broker’s services before you put down capital. The vast majority of reputable brokers will offer a demo service, which allows traders to in essence practice trading before they actually risk any cash. This does, of course, mean that no profit is on offer, but it also reduces the risk that you’ll fall victim to bad moves at a time when it will have a material financial consequence. If your chosen broker does not offer this service, it’s best interpreted as something of a red flag: it could mean that it’s subtly encouraging you to get started with real–money trading straight away.
In sum, trusted brokers are more than worth their salt. If you’re just starting out on your trading journey, it’s worth thinking carefully about using a trusted, recommended broker to bring down the chances of falling victim to fraud and to ensure that you get the most out of your trading experience. In the end, high fees often pay off when it comes to quality.
