Things to consider before trading in Forex

6 Things To Consider Before Trading In Forex

5 minutes, 40 seconds Read
Forex trading is a place that is one of the most easily accessible for anyone who wishes to make some serious money. It is easy to learn, and you have an entire day to watch, strategize, plan, and execute trades, unlike the stock market, where you have only a few hours to make some decent money.   After the internet revolution, there has been an increase in the number of retail investors. Now any retail investor can make countless trades since the forex market does not sleep. It is practically open 24 hours a day, seven days a week.   Just as a shark can smell a drop of blood from many miles away, similarly, where there is cash or money involved, you can be sure that it is infested by scammers. Scammers are a dime a dozen when it comes to the forex market.   Many potential traders avoid trading in forex after getting entangled with scammers. The idea that someone can get rich quickly and ethically is not what they wish for. There has been a lot of emphasis on scams that are perpetrated by scammers. It is sad to know that due to some negative feedback, many prefer to stay away from investing and trading in this financial market.   The primary reason that many people avoid entering and starting forex trading is a lack of understanding that scammers lure their victims and then rip them off.   In this article, we will educate you about the red flags that can alert you, should you wish to join and make a substantial amount of money while trading in the forex market.  

1) Forex Broker

It all starts with the right online forex broker or brokerage firm. The internet has several options when choosing a forex broker or brokerage firm. You can narrow down your search by going for a reputed forex broker or brokerage firm.   Because reputation and goodwill are at stake, the online forex broker or brokerage firm will display their license for trading and will be regulated by a governmental or private regulatory authority.   Try to verify online if the license and regulatory certificate are valid. Refrain from calling the broker or firm directly with the number provided. If they are running a scam, why would they own it?  

2) Webpage

When you are directed to the homepage of an online forex broker or brokerage firm, go through the entire page. If the quality of the English used is poor and there are a lot of errors in the constructed English. It would be better not to pursue the matter any further.   If the quality of the English is good, the next thing to look out for is the review section. You must understand that there are going to be many dissatisfied customers, and it is quite challenging to satisfy everyone’s needs.   A review section is a place where many vent their appreciation as well as their dissatisfaction. You can catch a glimpse of how the questions or the overall client experience are handled.   You can also verify if the broker or firm is involved in any litigation on the reviews page. If you find something, it’s a good idea to look into what crime they’re being charged with. This will help you as you continue to search for the one that suits your needs.  

3) Location

You should look for the headquarters of the online broker or brokerage firm. After collecting the details, go to the local law enforcement agency and ask them if the online forex broker or brokerage firm is allowed to run their business in your country.   Several states have their laws when it comes to financial matters. Some states restrict certain financial activities. You should check if the broker or the brokerage firm has any jurisdiction to run their business in your state.  

4) Client service centers

Several online forex brokers and brokerage firms make unsolicited calls to increase their business. You may even request one to call you. If the person on the other end tries to persuade you to close the deal quickly or uses coercive tactics, then it would be wise to hang up on the call rather than entertain them any further.   If the person on the other end of the line is offering a once-in-a-lifetime opportunity or a competitive price, you should avoid taking the call any further.   Some scammers are impersonating an online broker or a brokerage firm, they might try to entice you with forex trading bots. Yes, forex trading bots do exist and cost a lot. A reputable firm’s trading bot invests a lot of money in research to perfect it; however, they are 80-85% accurate and can generate a lot of profit. However, they need to be monitored frequently to avoid any accidental buying or selling of currency pairs without your authorization.   However, such bots, if offered at a competitive price, are a total waste of money as they can be compared to “expensive garbage.” They will financially bleed you rather than increase your financial assets.   Alternatively, you can call the number listed on the forex broker or brokerage firm’s website. You must try to make a call any time of the day just to check what quality of service you might receive once you enroll. Ask some questions or make some inquiries and see what they say.  

5) Online Courses

Several online forex brokers or brokerage firms offer online forex trading courses. These online courses can be accessed at any time to learn about the forex market. They will train you to build a strategy with the help of research.   Some offer online articles that can be referred to increase your knowledge about the forex market. They even publish financial articles that will help you stay updated with the current global economy, further assisting your research.   Some also offer webinars that help you connect with your fellow traders and the trading experts that can add value while strategizing your game plan. Tactics and strategies learned on these platforms can help you think like a forex trader.  

6) Terms and Conditions

The terms and conditions are one of the most important aspects to consider before signing up with an online broker or brokerage firm. They can make or break your financial savings.   Any broker or brokerage firm makes money by charging a commission while you trade. Some will change based on the spread rather than on single or multiple trades. Others charge for withdrawing your earnings, while others transfer money to your account. While some might charge hidden costs or fees for some other features.   Before you sign any document, it is better to consult your local Certified Public Accountant (CPA).  

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