Fri, 03/06/2020 - 15:17
The forex market is the largest financial market in the world, with trillions of dollars traded every day by banks, corporations and individual speculators. Money is always changing hands across borders, and if you play your cards right, you make a lot of profit off exchange rates!
With all that profit potentially up for the taking, it’s no surprise that more and more people want to get in on the action. That’s why there is such a huge number of options to choose from when it comes to forex brokers. But it pays to be cautious – while working with a reliable forex broker is essential to market success, there are also many scammers out there who are just looking to run away with your money.
With so many forex brokers to choose from, it’s always worth checking out a few things to make sure the broker is legitimate, and the right one for you! Here are our best tips on how to find the most reliable forex broker available.
Vet your broker
In such an important financial relationship, it’s important to know who you’re dealing with. Is your broker open about who they are? Is the CEO or other company officials shown with pictures and names? Full address and contact details? Transparency usually means accountability. Always make sure to check a potential broker's 'About Us' page and see who they are. If they are not telling you, stay away.
Legitimate brokers are certified by a regulatory body. Check the fine print on the website to look for certification. Reliable regulators include:
- FCA (UK Financial Conduct Authority)
- CySEC (Cyprus Securities & Exchange Commission)
- ASIC (Australian Securities & Investment Commission)
- SFC (Securities Futures Commission – Hong Kong)
- MAS (Monetary Authority of Singapore)
- FSA (Financial Services Agency – Japan)
- IIROC (Investment Industry Regulatory Organization of Canada)
- FINMA (Swiss Financial Market Supervisory Authority)
In addition, a legitimate forex broker will provide a written risk warning for you to read. Don't do business without one.
Many brokers have reviews online, but, just like with restaurants, Airbnbs, and other businesses, the system can be gamed. So don't just look at number ratings–read reviews to see if they are realistic and reasonable, and check the profiles of the reviewer. This goes for both good and bad ones, as even a reliable broker can have negative ratings from someone who lost money on legitimate trades.
Once you know who your broker is, then you should look at the features that they offer.
What to look for in a reliable broker
Do they offer a demo account? Most reputable forex brokers will let you try before you commit to any risk with your own money. For example, Libertex offers a demo account with 50,000 virtual dollars to practice with. This lets you experience the forex platform for yourself, get familiar with the available instruments, ease of use, fees and so on.
What currency pairs are offered? Most reliable forex brokers will carry all major currency pairs. You'll want the US dollar, of course, but also Canadian and Australian dollars, Euros, British pounds, Japanese yen. You can also make money trading less common currency pairs or digital currencies, so it's also good if your broker supports more options. If the broker you are looking at only supports unusual or exotic pairings, that can be cause for suspicion.
Platform. A modern broker should make life easy for you, and support multiple platforms for trading. Look for a broker that has an app as well as web-based platforms. The app should be on Apple's App Store or the Google Play Store, not a 3rd party download. It's a bad sign if a broker won't give you tools to access your trades on the go, or if the company is not developed enough to offer technological solutions.
Scam signs to stay clear of
Some forex brokers are simply unreliable, others are outright scams designed to bleed you dry, even if you're a good trader. Scam brokers tend to disappear once they get into trouble and reappear under different names, which is why the aforementioned certification and listed address is so important.
Hopefully, the broker that you are looking at already addresses fraud concerns upfront. Otherwise, these are a few warning signs to beware of:
The broker has not been active long. New brokers may be just legitimately starting out, but they still carry more risk. A reliable broker should have at least a few years of forex or at least finance industry experience. Even companies like Libertex, who offer modern technological solutions, are backed by veteran traders with over 20 years of market experience.
Deals are time-sensitive or too good to be true. Is the brokerage offering you ridiculous amounts of leverage or a bonus of thousands of dollars to sign up in the next 24 hours? Does it guarantee you will profit within a short time? Do they have a magic AI bot that's guaranteed to make money automatically trading for you while you sleep? All these things could be a dodgy broker trying to get you signed up before you do your research. Good brokers offer the best conditions in the long term, not just at the beginning, and are upfront about the risks involved. If it sounds too good to be true, it probably is.
Bad or non-existent support. A good broker values its clients and takes care to cultivate a good relationship. If customer support is slow to respond, rude, or doesn’t communicate well in the advertised language, your broker may not be interested in helping its clients, or may not be who they say they are. A good tip is to contact customer support with some questions once you sign up for an account, to see how responsible and professional they are.
Trouble withdrawing. This is a big red flag. Ultimately, it's in the broker's interest to keep your money in the system, but you are there to make money, and use it when you want to. A legitimate brokerage will respect that. If withdrawals are blocked or delayed, that's suspicious behavior. You should always have control over your money.
Libertex - transparency and trust for forex and more
Libertex is a fully CySEC authorized and regulated international broker, and we offer not just access to the forex market, but also over 230 financial instruments including stocks, cryptocurrencies, precious metals, oil, natural resources and more. Thanks to our easy-to-use app and web platform, our clients have 24/7 access to trades and responsive customer support in multiple languages.
Whether you're an established forex trader or just dipping your toes into the market, Libertex offers you the tools to trade on your terms and the information you need to make informed decisions. We pride ourselves on our integrity and quality service, but you don’t have to just take our word for it. Try our demo account and see for yourself how easy it is to manage your trades with Libertex, and sign up when you’re ready to join the best hi-tech forex broker in the market!
