How to detect unregulated forex brokers

The financial market is filled with conflict of interest with tons of unregulated brokers trying to deceive traders. Beginners are most vulnerable to these tactics. Unregulated brokers struggle to venture into the marketplace illegally to take advantage of inexperienced traders that just started forex trading.

Due to this, unregulated forex brokers tend to give the regulated brokers a bad name because of their dubious practices in leading traders astray. So, as a beginner or a professional forex trader, you need to stay clear of the broker you use. If possible, check the lqdfx review here to get a better understanding of regulated brokers. Be vigilant enough to make research of any broker you intend to use.

Before that, here’s a list of tips on how to detect unregulated forex brokers:

Where you’re new to trading or not, you need to be aware of suspicious signs from any broker before using their service. Most importantly, don’t open an account with any broker, when you don’t have enough information about them. Unregulated brokers have the habit of misleading traders to sign up on their platform with dubious tricks. Even the deal they offer seems enticing, you should know that it won’t take long before they scam or defraud your money.

  • Scam Brokers are Unregulated

Good brokers have nothing to lose from getting regulated by the authority. For example, take a look at Paxforex, they know that operating under the regulatory bodies ensures trader’s safety. Scam and Unregulated brokers don’t want to follow the strict rules and guidelines of regulatory bodies, thereby operating independently.

To evaluate a broker’s legitimacy, you need to take a look at the broker’s platform for license information. With this license information, you could research further about the regulatory authority that certified them. The license of any regulated broker is often indicated at the bottom of their webpage. So, navigate below to find what you’re looking for. What kind of certification do regulated brokers offer? A regulated broker will provide accurate certification on their website, which is similar to:

  • (CySEC) Cyprus Securities and Exchange Commission
  • (FCA) Financial Conduct Authority
  • (ASIC) Australian Securities and Investments Commission

No matter the certification you found on the broker website, you have to research further about it for clarification.

  • Unregulated Brokers are not in Forex Directories

Unregulated brokers don’t show up in review websites and forex directories. For example, check the FXpro review here, you will notice that the website only contains reviews about regulated brokers. Only regulated brokers are listed in the Forex directory to make it easy for traders to immediately find information about them.

From the forex directory, traders can easily get an idea about the quality of a broker, along with the services they provide. Also, you have to keep in mind that there are review websites that post fake reviews about brokers with the idea of luring traders to the platform.

  • There’s no Way to Contact Them

Unregulated brokers are often hard to contact whenever there’s a need for an inquiry. This can be as a result that they don’t care about who registers and uses their fake platform. But for regulated brokers, it’s quite different because they value their customers. So, when you are choosing a broker, try to reach out to them first before registering. Regulated brokers offer traders a seamless way of contacting them through email, calls, and live chats.

Conclusion

The financial market is filled with conflict of interest with tons of unregulated brokers trying to deceive traders. Beginners are most vulnerable to these tactics. Unregulated brokers struggle to venture into the marketplace illegally to take advantage of inexperienced traders that just started forex trading. So, be sure to utilize the above tips when choosing a regulated forex broker.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.