Is Forex Trading A Scam

Want to leap straight to the answer? The best forex broker for most people is definitely FOREX.com or CedarFX.

The foreign substitution or forex market is an entirely legitimate decentralized marketplace where national currencies are swapped for one some other at a market-determined exchange rate. Trading forex involves speculating on exchange rate movements. Online brokers make trading in the forex market easier than ever, although some scams do exist. Read on to become data nearly the scam alarm signs that aspiring forex traders should sentry out for.

Contents

Simply Put: Is Forex a Scam?
Previously Identified Scams
- Broker Scams
- Signal Provider Scams
- Spread Widening and Off Market Quotations
- Robot Scams
Best Forex Brokers
- 1. FOREX.com
- 2. IG Markets
- iii. eToro
Take the World in Your Hands
Compare Forex Brokers
Oft Asked Questions

Simply Put: Is Forex a Scam?

Forex trading is not a scam, and yous can trade currencies legitimately via reputable and well-regulated online brokers like FOREX.com via its forex trading platforms. Currencies merchandise in pairs in the forex market, and so each forex transaction involves buying ane currency and selling some other simultaneously.

Previously Identified Scams

Not merely is forex trading definitely not a scam, but the foreign substitution market has the largest boilerplate daily turnover of any financial market at $6.six trillion per day. While retail forex trading represents only a small portion of that volume, it tin can nowadays some fraud risks for the unaware.

Unfortunately, some dishonorable online brokers do be that deliberately aim to mislead you to cheat you out of your margin deposit or the profits you earn trading forex. A rundown of common forex scams y'all should avert appears beneath.

Broker Scams

It'southward normal for forex traders to desire to select the best brokers to operate through since they more often than not want to maximize their trading returns. Simply those shopping for a new banker should beware of disreputable forex brokers that could take yous for a ride.

Be sure to perform your due diligence by researching whatsoever new broker carefully and closely reviewing their reputations with clients and within the industry. A skillful place to beginning is by reading the footer of the broker'south website. If information technology has no information about the banker being overseen by one or more major regulatory bodies or any disclaimers about the gamble of loss that decent regulators require, information technology would exist prudent to avert that broker.

For example, an online forex broker overseen by U.S. regulators like FOREX.com should mention its oversight by the Commodities Futures Trading Commission (CFTC) and the National Futures Association (NFA) on its website. The broker should besides operate under a valid license number issued by those organizations, as well as fully conforming to their regulations to remain in skillful standing.

You can also practise a quick bank check on websites similar www.forexfraud.com and www.forexpeacearmy.com for forex brokers with a history of negligence and fraud. In general, your chosen forex banker should be well regulated and accept a reputation for treating clients fairly.

Signal Provider Scams

Rather than performing their own technical assay, some forex traders prefer to rely on trading signals they pay for to help them predict substitution charge per unit movements. This information can exist purchased from firms ordinarily known as bespeak providers.

You can typically subscribe to signal providers for a weekly or monthly fee. Before subscribing to one of these services, it makes sense to inquire for a historical performance chart of their signals to assess the authenticity of their claims.

Nigh signal providers have a mixed record consisting of some good and some bad tips. This ways yous can use their functioning information to select amid them and avoid the more than obvious bespeak scammers.

Spread Widening and Off Marketplace Quotations

The forex market place is largely unregulated, and then dealing desks take been making money "on the margin" by widening the dealing spread or showing off market quotations (in their favor of form) to their clients for decades.

Since there is no centralized substitution where currency pairs trade to provide official market exchange rates or fixed dealing spreads, this industry practise continues unabated. Fortunately, the forex market is becoming increasingly transparent as a upshot of online trading platforms and customer awareness of this mutual exercise, and so the turn a profit margins dealing desks can derive from such questionable behavior are narrowing.

Comparing spreads and quotes from unlike forex dealing desks and also checking them with a reputable online forex banker's trading platform will help you lot get the best possible commutation rates and avoid possible losses due to spread widening and off marketplace quotes.

Robot Scams

A hot trend amidst forex traders involves using automated trading algorithms or "adept advisors." These forex trading robots browse commutation rate data for one or more currency pairs to identify trading opportunities and and so execute entry and go out trades for you.

From slick, high pressure websites to fake testimonials, trading robot vendors attempt to sell the often unrealistic thought of making great returns trading on autopilot without significant homo intervention.

These vendors seek to attract naive forex beginners who somewhen wake up to realize that the robot they bought has traded their account into a loss. While these go rich quick robots typically disappoint, this does not mean that you lot cannot successfully automate your own tried and tested strategy using a suitable online trading platform similar MetaTrader 4 or 5.

Best Forex Brokers

Forex trading takes place around the clock from Sunday at 5pm ET until Friday at 5pm ET. You also have a limited number of currency pairs to trade, which makes forex trading somewhat simpler than stock trading. Since there isn't a centralized market for forex trading like there is for stocks, forex traders can do well using an online trading platform that most brokers offer access to gratis of charge.

Signing up with an online forex broker can also provide admission to helpful market research, tools and relevant news that can assist you lot when trading. Out of the hundreds of online forex brokers currently available, Benzinga has hand-picked the best to get you started.

Minimum Merchandise Size

1,000 (0.01)

Commisions

$5 per 100K traded

Best For

MetaTrader 4 users
Beginner forex traders
Active forex traders

1. FOREX.com

Established in 1999, FOREX.com has been a frontrunning U.Southward. based online forex banker for over two decades. Y'all can open an business relationship with a minimum eolith of 100 units of your base currency.

FOREX.com'southward advanced trading interface offers fast and authentic trade execution via desktop, web or mobile device. Based on your trading style, you tin customize the platform to your liking.

This broker is authorized and regulated by the U.S. CFTC and is a member of the NFA under licence number 0339826. Yous'll notice plenty of favorable online FOREX.com reviews that praise the broker for its robust trading platform and research tools, which include:

Market insights. The global research squad at FOREX.com constantly provides actionable ideas during the New York, London and Asian trading sessions.
Key analysis. Electric current economic events are used to predict commutation rate movements in the forex market.
Technical assay. Analyzes historical exchange rate movements of currency pairs to identify chart patterns and make forecasts.
Live trading sessions. You can participate in alive trading sessions and webinars for real-time insights into the forex market.

All-time For

New forex traders who are still learning the ropes
Traders who adopt a unproblematic, clean interface
Forex traders who trade primarily on a tablet

2. IG Markets

Having been involved in the foreign exchange marketplace for over 40 years, IG is a trusted online broker for forex trading. Its expertise is complemented with an easy-to-apply trading platform that allows you to make transactions in up to 93 currency pairs.

You tin open an account at IG with a $0 minimum deposit, and its dealing spreads are among the lowest in the industry. IG even won the FX Weeks east-FX 2019 Award for Best Retail FX Platform of the Year.

IG is regulated past the CFTC and is a member of the NFA. You can read more about this tiptop banker in Benzinga's IG review.

Spread

starts at ane.0 pips

Disclosure: eToro USA LLC; Investments are field of study to market risk, including the possible loss of main.

iii. eToro

eToro's online trading platform offers many of the world's near popular currency pairs, and its copy trading service is among the best in the business. Yous'll too enjoy boosted benefits, such as real-time execution of market orders and unlimited daily withdrawals.

View real-time data, access in-depth analysis tools, and exist the 1st to catch the trends wherever you are. You can also get customized notifications on your watchlist, and endeavour out eToro'due south many innovative features completely gamble-free with a gratuitous demo account funded with $100,000 of virtual coin.

Take the World in Your Hands

Forex is a transparent and open up trading market built for defended investors. As an active forex trader, you lot have a front-row seat to events that shape global economies.

Be wise with your investments, and you lot tin can influence the value of international currencies from the palm of your hands. Avoid and the scams and get started in forex with our recommended online brokers.

Compare Forex Brokers

Frequently Asked Questions

How can yous protect yourself against forex scams?

How tin can you protect yourself against forex scams?

asked 2021-07-29

Chetan Shekar

You must do your homework on the forex brokers and the most common types of scams.

Answer Link

answered 2021-07-29

Benzinga

What are the all-time ways to check on a forex broker?

What are the best ways to check on a forex broker?

asked 2021-07-29

Chetan Shekar

You lot can do a broker bank check with FINRA and the SEC.

Respond Link