Too good to be true is a common expression, with good reason. But it is not something that you want to say about the company that you intend to use for forex trading. The banks will not be a good option either as you will need to pay an exchange rate. Using a bank would also take far too long for those who want to trade in the fast-paced world that is forex trading. That’s why most people choose to go to a so-called FX broker with their trading needs. If you want to have the opportunity to make money from currency trading then this is almost a must. But how do you know your money will be safe with your choice of FX broker?
Unfortunately, there is no secure way to answer that question. It is not like it says “SCAM” on the page if you go into an unreliable FX broker’s website. But there are methods that you can use to reduce the risk. Below you have a list that can help you along the way.
Here are some tests for your FX broker – Can they pass them?
The most common thing people do when they want to find the reliability of a product or service is to search the name, sometimes even write scam after the name. There is no difference when you are pondering over an FX broker. If it is unreliable then you will be bombarded with results on the first page of the search engine you have chosen (a.k.a Google). Another common method is to search for reviews, the same principle as last time, but write a review instead of scam. Then you will get many pages that have done the investigating for you, you can even get tips from them on other brokers who may offer better benefits to you as a potential customer.
Another method you can use is to see if your broker of interest only deals with FX, or if they also allow stock trading. If they allow both and then they are a much more reliable broker since stock trading is a more regulated market. This does not mean that anyone who only offers FX trading tries to trick you, just that you should be more careful.
The last tip we have to offer is to check if the FX broker is regulated by ASIC, also known as the Australian Securities and Investments Commission. ASIC is one of the oldest regulators on the market and the FX brokers that are regulated by them are regarded as among the best. If they are regulated by ASIC then it would be very unlikely that they are not reliable. You will surely find out if the broker is regulated by ASIC or not by reading a review.
This list is to help those who just start with forex trading, which is why the tips can seem simple and obvious. But it can also help show that it is easier than many think to find a reliable FX-broker. Then it is up to the individual to find which broker is best for them, but the person does not have to worry that someone will steal their money.