How To Shield Yourself From Forex Broker Scams

While you may appear like a sheep before the giant, wolf-like bad brokers, it doesn’t suffice that you will have to accept their act of wickedness and abuse.

If you feel discouraged because it appears that brokers hold all the aces, take solace in knowing that there are some simple but effective measures you can take to equalize.

Take Price Feeds And Compare The Brokers

Imagine a picture of a horse with blinders over its eyes. The vision of this horse is limited to see only what is in front of it.

Assuming there is a huddle lying on its pact, our hypothetical horse will have no other reasonable choice but to summon the additional courage and effort required to jump over the hurdle. From the look of things; this is a very unhappy horse.

If you are only making use of the price feed provided in your trading platform, it is correct to say that you are trading just like a horse with blinders on.

Since you have limited to the price feed of your broker, you have no idea of what’s going on in the outside world of the forex market.

Assuming your broker decides to run your stops, manipulate rates and widen spreads, you have no way of knowing neither can you tell if the move is similar to that of the general market.

You don’t honestly want to be a miserable horse. Seeing that you are a smart and knowledgeable trader, you desire to have the most complete and best possible view of the market.

The most favorable way you can do this is to get a subscription for a second, third, even as far as to a fourth priced feed. By so doing, you can get another reliable view of the market. , which would in return give you the opportunity to know first-hand if price actually moved the way it did.

Get Everything Recorded

Endeavor to keep a well-detailed journal that tracks EVERY single transaction you made. This should be a continuous habit. Let it be like a courtroom situation where you need to tender evidence to support and win a case. You could be or may FEEL cheated, but who cares if you have no evidence to back up your claim? That feeling will remain a feeling, and nothing more!  

One of the quickest and most reliable ways to keep records is to create a SCREENSHOT of every single order you made, each of the trade you undertake, together with all or any of the broker’s suspicious activities such as odd price feeds.

This type of journaling isn’t just amazing, but will also come to your aid in a situation where you became the victim of an errant fill. As you continuously track the trades you undertake, you are also reassuring yourself that if a dispute arises between you and your broker, you will always have the hard evidence needed to support your argument.

Take Legal Action

The doors to the law courts are open every day, and a lawyer would be more glad to help you if you cannot settle your dispute with your broker. Filing a legal action is one thing that any sensible broker doesn’t want to face. The majority of brokers surrenders quickly when confronted with the threat of legal action because they understand it could put an end to their legacy as brokers. But if they still refuse to give in, you can approach the regulator the broker has a license with.

We suggest you to first check who the broker regulated with i.e. Brokers which are regulated with FCA, we urge you to contact FCA for brokers, brokers regulated in the Cyprus, you can contact to CySEC. Brokers based in the USA, you can contact to National Futures Association (NFA) or the Commodity Futures Trading Commission (CFTC).

The CFTC operates and provides a fair, inexpensive and expeditious Reparations Program, with an impartial forum that addresses clients’ complaints as well as resolve disputes occurring between commodity futures trading professionals and futures customers. Use this link to check out their program.

Similarly, the NFA operates a Mediation/Arbitration Program that assists in resolving disputes. To get more information about their operations, visit the NFA website.

Develop And Maintain Good Trading Habits

Just like a well-disciplined monk who wears a positive habit, you must also have to create and harness positive trading habits. Jokes may sound funny and don’t make sense most times, but we still have to put it here all the same.

In all situations, despite having the right weapons to shield yourself against fraudulent and evil brokers, the best and most effective preventive mechanism is still to become a positive and better trader.

Bear in mind that no matter how much time you commit to finding the best broker, no matter how sophisticated and robust your charting software is, no matter how sophisticated or properly organized your trading system operates, you will still end up a loser without proper discipline.

Most times, it is easy to point the accusing finger on brokers, but in reality, it is your choices that have landed you where you are heading now.

Stay put for our next lesson on “How you can open a forex trading account.”

  • BrokerEUR/USD
    FX Pro 0.91pips. (variable) margin: 3.33%
    Core Spreads 0.6pips (variable) margin: 3.33%
  • Back to top