If you go to the internet and run a quick search on forex brokers that are not trustworthy the number of results that you will find will be stunning. Even though forex brokers are becoming more and more governed, there are still many unreliable ones out there that you should be wary of. It is now up to you to be able to identify and separate the real ones from the dodgy ones. There are some measures for you to undertake in order to be able to achieve this. Trading in itself is already difficult enough and if a broker implements practices that do not favour the trader, what chance is there for the trader to make a profit.
Actuality and Falsehood
There are traders irrespective of whatever strategies they employ that will keep failing in the forex market and almost never makes any profit. Dissatisfied as they are, they always want to blame someone else for their failure, most especially the brokers. You might then go online and read their resentful comments on different articles and posts, blaming the brokers for their failures. Hence, when you carry out your research on that prospective forex broker you must be able to tell apart the actual from the false facts. In many situations, the trader might think that the broker is deliberately attempting to cause a loss.
There might be complaints about quick market reversal as soon as a trade is placed or slippage on their orders. These kinds of experiences often happen and it possibly might not have been the broker's fault. Sometimes, however, the brokers are to blame.
This particularly happens when the broker tries making trading commissions at the expense of the client. Reports exist of brokers randomly moving quoted prices to initiate stop orders; however, this can hardly happen. The slippage on others is mostly a psychological case. It comes from the fact that amateur traders always tend to panic because of the fear that they might miss out on a move. Because of this panic, they can hit their buy button or maybe if they fear that they might lose more, and then they hit the sell button. In the volatile market environment, the broker does not guarantee the processing of the order at the preferred price.
This leads to sharp movements that in turn cause slippages. This also applies to the limit and stop orders, while some brokers guarantee it, others do not. Even in markets that are very transparent, slippages can still happen with sharp movements and traders not always achieving their targeted price. So sometimes when traders regard brokers as dodgy it could just be that they are only a victim of their own misunderstanding of the trading market.
The Actual Issue
The actual issue that can occur is the breakdown in communication between the brokers and the traders.
This is when for the trader, phone calls are not answered or emails are not responded to or may be clear answers are not given to the trader.
Then there is an indication that the broker might not be working in the best interest of the trader.
Another issue that can be very detrimental is if the trader is unable to withdraw his fund from the trading account.
You can guard yourselves against dodgy brokers using helpful measures.
Go online and study broker reviews, fishing out the resentful trader but also checking to see if there are any lawful actions that don't favour the broker.
Find out if there are issues about the withdrawal of funds and if there is; contact those that had the experience to figure out if and how it was resolved.
Study all the necessary documents before opening an account.
Be careful about incentives as it can work against you when you try to withdraw your funds especially with bonuses you get when you make a deposit, which can't be withdrawn.
Study more for hidden facts to be sure you understand everything in particular about withdrawals and if they are affected by incentives. Even when you are convinced about using a broker, you can open a small account with a small amount of initial deposit. You can also trade for a period of 30 days or more and try to withdraw your funds to see how it goes. If it goes well then you can try depositing more funds.
When you have any issues try and contact the broker for it to be resolved. If it doesn't get resolved you can post your experience online and relate it to others. You should also make sure you don't use the broker's size as a yardstick for determining the risk level. The financial crisis that happened between 2008 and 2009 was a big lesson for everyone and shows that the size and popularity of a firm is not a guarantee. You can find out more at http://trustedforexbroker.com/ .
How Do You Free Yourself From The Claws Of The Dodgy Broker?
Unfortunately, there is not a lot that you can do but there are still some things for you to manage. Study all your documentation to make sure that you broker is really wrong. If there are somethings you missed or didn't read before you signed, then there might not be anything that you can do. Be demanding with the broker but avoid any rude tone and you might suggest taking some actions if they do not resolve your issues adequately. Some of the steps you might take might be to drop some online comments or report the broker to a governing authority.