Nowadays, with the development of forex system, there are many forex brokers all over the world, which are both good and bad. They could be safe and reliable forex brokers, yet they could also be the cheating and scamming ones. The question is how to identify the reliable brokers to work with.
As mentioned above, there are many good and bad brokers, from the most well-known ones with reasonable cost and conditions to the worst ones with high spread, commission and unstable trading operations. Such good brokers are FXTM or Exness which offer the low spread for traders, create the safe trading environment for them, provide great customer service and account types. On the contrary, Refco is really a bad broker as it announced bankruptcy in public and even tried to hide $430 million of bad debts from its clients. Moreover, the customers’ accounts were put in danger since brokers did not separate them into bank accounts, which made traders lose even before they can have a single trade.
As a result, it is recommended and also a common habit of traders to research and inquire more about a forex broker before deciding to work with them. We have to check many factors such as reputation, reliability, financial health, great support service,… We should not hurry to find a broker at the beginning. Instead, careful inquiry and research will be a wise choice.
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Normally, you can search for more information about the forex brokers on the Internet. By this way, you will reach the reviews from all traders about both good and bad brokers in the market. After that, you can choose and list out the most reliable, best forex brokers for your own. 3 brokers should be good and minimum. Then you start to evaluate and compare them with brokers in the market based on the common standards. However, it is recommended to start with small deposit and low trading lots. It is not necessary to hurry at the beginning.
SELECTING RELIABLE FOREX BROKERS
When choosing the forex brokers to work with, the first important thing is to check if they are reliable and trusted.
How can we evaluate the reliability of a broker? It is easier with these standards below: location, regulation, reputation, funding.
The reliable brokers should be located in the big, developed/ developing, potential countries with strong health of finance and good financial regulation. With these conditions, traders will be safe and protected whenever there is any problem. However, it is recommended to double-check the location even if the address of the company seems correct. Traders should not work with brokers in small places such as Laos, Zimbabwe,…since they do not have good financial regulation. Because it is pretty hard and wasting time to use the legal rights in a foreign jurisdiction, you should avoid forex brokers which have vague conditions and operations.
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BRKV – It is important to see if the forex brokers are well-regulated or not. Often, the reliable brokers do not have any problem with the governmental regulatory agencies. Therefore, traders should also avoid those brokers which have trouble of registration with regulatory bodies because you are not sure if your funds are protected or those brokers have legal operations or regulation.
There is a fact that with a reliable license from regulatory agency, brokers will be safe to work with even if there is a bankruptcy of brokers or there are losses of clients’ funds and profits. In short, regulated brokers are always recommended.
Below is a table of reliable licenses provided by many big countries all over the world:
|United States:||NFA, CFTC|
|United Kingdom:||FCA, UK|
|Canada:||BCSC, OSC, CIPF|
|Japan:||FFAJ, FSA Japan|
|Switzerland:||SFDF, FINMA, ARIF|
|Dubai:||DMCC, DFSA, DGCX, ESCA|
The reliable forex brokers should be well-known and popular. But of course, they should be famous for good things. You have to see both good reviews and complaints for the brokers you are considering. Problem about withdrawal is often well-considered in a broker.
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Finally, traders have to check the financial health, fund and capital of the forex brokers. The reliable brokers are often well-funded or have strong financial support. They should be owned by big companies or trusted corporations, which could indicate that the brokers will protect traders and keep all the funds safe even when there is any trouble or damages, losses. It is easy to find out by checking the information on websites about the history of the company or “about us” category. By this way, the core value, objective and mission of the brokers will be explained clearly. Information about the regulation of a broker can also be found on website that you can see the annual statistics of regulators on the capital funding for their licenses. It could also show whether the capital funding is adequate or not. It is always safe to separate funds into many accounts at Tier-One banks since traders prefer the safe trading environment when working with a broker.
Choosing the bank to save your money is partially the same as choosing the trustworthy and reliable forex brokers in the market. The main keys are regulation, reputation, easily depositing and withdrawing system, great support/ service team, transparency.
The last thing to remember is to read clearly and carefully the terms and conditions before agreeing with the brokers’ representatives for safety.
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