InvestTrading

Savvy Entrepreneur’s Guide to Avoiding Lousy Forex Brokers

2 Mins read
  • Choosing the right forex broker can make or break your trading strategy.

As an entrepreneur, you need to be creative with your financial management strategies. You need to consider using alternative investments to get more value out of your long-term retirement and financial management plan.

One way for entrepreneurs to get more value from their savings is through forex investing. As we said in the past, this can be a great way to bolster their cash flow.

However, you can’t succeed without the right broker.

Choosing a Great Broker is Key to Thriving as an Entrepreneur Dabbling in Forex

One of the most noticeable trends within the online trading and investment world over recent years is how accessible the industry has become. Although once upon a time, setting up a trading account was a fairly laborious process that involved navigating the murky world of financial investment professionals, this is most definitely not the case anymore. Thanks to the rise of online investment platforms, setting up an online trading account can be done in a matter of minutes.

With online trading so popular, there are now more investment platforms than ever bursting onto the scene. It seems like every few weeks, a new platform is launched. While many of these online trading platforms are run by incredibly experienced industry professionals who abide by all the codes of professional conduct that we would expect, this is unfortunately not always the case. This unfortunate fact means that the online trading space is not always easy to navigate, and it can often be quite tricky to tell whether your new broker of choice is a blacklisted forex broker.

A blacklisted forex broker is, essentially, a broker that has been ‘blacklisted’ by the industry or regulators for repeated code of conduct violations, for inappropriately dealing with client funds, or because it is running a scam. With thousands of online trading platforms out there at the moment, it can often be quite tricky to tell the good from the bad when it comes to choosing a new broker.

With that said, here are a few tips to bear in mind that should help you to establish the good, the bad, and the ugly when looking for a new broker. These are forex trading factors that you can’t ignore.

Check the blacklist

An obvious step you can take is to check the ‘blacklists’ online. A blacklist is essentially an online broker complaint registry that lists brokers that have been caught violating professional conduct rules and regulations, or that have been caught running a fake trading operation. These blacklist sites can be found using Google and should be regularly checked.

Check for a valid license

Unfortunately, industry blacklists might not be kept fully up to date as they rely on individual users reporting brokers. With this in mind, another step you can take to ensure that you avoid trading with a blacklisted broker is to check whether it has a valid license. Trading and investment platforms must have a valid license issued by a suitable financial services regulator in order to provide financial services to customers. As part of these requirements, this information must be clearly displayed on its website, which enables prospective clients to check the status of its license. As such, if you want to see what kind of regulatory history a broker has, simply look for this information on its website. If you can’t spot it, this is a good sign to avoid it!

Read the user reviews

Another good way of checking whether a broker has been blacklisted or can be trusted is simply to read some user reviews. Use a search engine of your choice to find user reviews posted online. Take note of any negative reviews – albeit with a grain of salt – and always be suspicious of anything that looks too positive!

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Ryan Kh is a big data and analytic expert, marketing digital products on Amazon's Envato. He is not just passionate about latest buzz and tech stuff but in fact he's totally into it. Follow Ryan’s daily posts on Catalyst For Business.
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