The foreign exchange market is one of the biggest financial markets and there is a large daily rotation of capital that is utterly significant. Due to the fact that there is a significant amount of money exchanged and transacted every single day, the countries are trying to make the regulations as effective as possible on the market, however, there is still a place left for illegal activities that usually comes from the brokerage companies that are involved in the market.
The forex market is very complex and competitive and is very difficult to trade on your own, without the help of professionals. Generally, those are the brokerage companies that assist the traders with proper help and it is very crucial for the trader to identify reliable and viable brokers and stay away from those who are not performing their work the same way it should be.
Separating facts from fiction
While the traders are trying to find the broker who will give them the proper assistance, it is important to learn how to separate fact from fiction. It is important to search for all types of forums, comments about the broker that make us decide whether their activity is efficient or not, if the comments are disgruntled and the statistics show that all the traders fail, then the performance of the brokerage company is not proper.
One of the most frequent complaints from the trader’s side is also that the broker was trying to cause loss, making an example of as soon as they made the deposit, the market trend reversed or that the broker stopped hunting their position. However, those are the cases when the brokers cannot do anything and this is just the market characteristics. Thus, we should know what are the duties of the brokers and what type of help they can assist us with because the market directions are not the factors that the brokerage companies have their influence on.
There are also a lot of cases when brokerage companies are spreading rumors about their competitors in order to gain clients due to the strong competition in the industry. However, one of the best tools to check the information is to search for the reviews published by high authority websites. The same case happened with the ATF brokerage company, however, the Global Trade ATF broker review proved the opposite and explained every single detail thoroughly. Thus the clients have the truth about the activity of the company and that the rumors were just a matter of unhealthy competition.
There is a lot of cases when the forex traders fail while using the tested trading plan and strategy during their trading process. Sometimes they make trades depending on the psychology that they feel the market will move in one certain direction, which has a chance of 50%. Rookie traders usually enter in the process when their emotions are diminished and the experienced traders know that the trade should be executed without the emotions benign obstacles. The new traders are often bewildered by the market dynamics and make negative assumptions either about the market or the broker that they want to take his/her deposit, however it is just a matter of being not experienced and do not perceive the market trends and dynamics.
However, not always this is the case when the losses are caused by emotions and inexperience on the market. There are occasions when the broker is at fault in his/her losses. When a broker tries to build up trading commissions at the cost of the client, this might happen. Brokers have reportedly adjusted quoted rates unilaterally to trigger stop orders while other brokers’ rates have not changed to that pricing.
Fortunately for traders, this is an important case that is less likely to happen. It is crucial to realize that trading is not really a zero-sum game and brokers are the ones that profit largely from the big trade volumes. Overall, it is in the best interest of brokers to have a long-time client who trades with them frequently, allowing them to maintain capital or generate a large volume of profits.
Behavioral economics is frequently accused of slippage. It is typical for traders who are not experienced in the market to become panicked. They are afraid of missing a move, so they press the purchase key, or they are afraid of losing more money, so they press the sell key.
The broker does not have the ability to guarantee that the trade will be executed at the intended price in a fluctuating exchange rate environment. Sharp motions and slippage occur as a result of this. Stop or limit orders are almost the same. Stop and limit order fills are ensured by several brokers but not by everyone.
Searching for the brokers
The best thing you can do to yourself before starting the trading process is finding the unscrupulous brokers that will help you achieve your goals. There are certain ways to do so:
- Look up the broker’s reviews on the internet. A simple online search can reveal if bad remarks are just the result of an unhappy trader or something more serious. BrokerCheck from the Financial Regulatory Authority is an excellent addition to this sort of search because it shows if the broker has any pending legal actions against them.
- Check for any complaints about not being able to withdraw money. If there are any, reach out to the individual and inquire about their experience.
- When you are starting the signing up of your account, you should read all of the detailed documents. When it comes to withdrawing cash, incentives to create an account are frequently exploited against the trader. In these sorts of situations, reading the tiny print can assist ensure you comprehend all eventualities.
- If your research on a specific broker has made you satisfied, create a small account or an account with a modest quantity of cash. Try to trade it for around a month or longer before actually making a withdrawal. It should be quite safe to deposit extra profits if everything has gone properly. If you are having an issue, try to talk to the broker about them, because communication is the key in this case. In case of failure, it is important to talk about your experience so that other people can understand it for the future and take an example from it.
Summing It Up
Finally, to sum up, while traders may hold brokers responsible for their losses, there are situations when brokers are to blame. Before creating an account, a trader should do a thorough research on a brokerage firm, and if the research is trustworthy, a small amount of deposit should be made, which should be followed by a few trades and then think about withdrawal. If everything goes as planned, you will be able to make a significant amount of profits.
If you are already in bad conditions, it is important for you to double-check if the broker is involved in illegal behavior and then report the regulatory bodies such as SEC, FINRA or any regulatory body they are controlled by that can take actual steps against them.