How to Deal with Forex Trading Scams?
Although the foreign exchange market offers high potential returns, it also involves a risk of loss. So, if any company or broker claims to give you guaranteed high profits by trading in the forex, then it is better to stay away from such brokers. Forex broker scam is a result of promises of unrealistic returns which are made by them. According to the experts, there are different authorities who keep watch on the market, but still scams appear at some times. Here are given some simple measures that can help you to stay away from forex rate scams.
Compare prices feed: Do not completely rely on broker’s price feed. A smart trader always tries to get the complete view of the market. Whatever price feed is chosen by your broker, you need to subscribe to a second, third or even fourth price feed. It helps you to get another view of the market. It also offers you a chance to confirm whether price really moved the way it did.
Keep records of every transaction: Always keep records of your every transaction as it helps you to track every movement. When you feel cheated, you cannot do anything if you have no back up of your every transaction. The most reliable method of keeping records is to take a screenshot of each trading. It is especially helpful in checking odd price feeds. This works as evidence when you have a dispute with your broker.
File Legal Action: When you fail to settle a conflict with your broker, you may proceed for taking a legal action against him. It is seen that some brokers become ready to compensate when they receive threat of legal action. But still if they avoid to pay off, you can go to NFA (National Futures Association) or CFTC (Commodity Futures Trading Commission).
Under the reparations program of CFTC, a forum is being run for handling customer complaints. CFTC team members help to resolve disputes between futures customers and commodity futures trading professionals. NFA also has the Mediation program for resolving the disputes.
Find out facts before choosing broker: No one can claim that all of their clients’ feedbacks are positive. You can judge the accountability and reliability of broker by knowing the comments of different traders (clients). It is one of the great ways to check whether the broker is reliable or just want to draw attention of traders without having any experience.
Forex broker may face problem in situation of slippage. In condition of higher volatility in currency exchange rates, order is filled at such price which is different than the requested price. There are some brokers who guarantee guard against slippage but most of the brokers do not.