Forex brokers can be a big scam. Figuring out between the scam and genuine broker is really a hard job. But however, hard it is you have to spend time and research to find out the best Forex broker who can be trusted. Brokers play a very important role in helping traders to buy and sell through their platform with multiple facilities.There are lots of things that the brokers can hide from you to attract customers. This may in turn ruin your trading career as a whole. So, let us know a few of the secrets that the Forex brokers will try to hide from you.
The concept of leverage is not very clear to all the people across the world. You have to understand very clearly about the leverage. Your broker will only attract you by saying they provide huge leverages to have an extensive trade but that is not the case. The leverages have a specific way of functioning. The leverage can incur huge losses if you utilize them at the wrong period of time. If you have a certain amount of money and by taking leverage you invest more, then you are going to suffer a greater amount of loss which will make the balance of your account negative. This is a huge problem of leverage and using them judiciously will let you get out of this fake trap and you will be able to make it big.
Excessive offers and free webinars
Providing you excessive offers or conducting free webinars are eye wash for the customers in most cases. The offers they give you are actually gimmicks to attract customers largely. Nothing comes for free. You are paying for all you are getting. The free webinars are actually ways to captivate the attention of the traders and make them think exactly like how they want you to think. They would provide you with some unrealistic offers which will not even be fulfilled in real life. They would absolutely gain the profit from the free stuff they would be offering you. They would want you to have less experience so that they can drive you with their own thoughts and actions which is really something we should think of.
Book you belong to
There is a concept of book in forex trading where there are Book A and Book B. This is how they separate their users or clients. Mostly this is popular among the ECN or STP brokers. Basically in this case the people who have the capability to make profit are transferred to Book A and the people who are inexperienced and can suffer losses are transferred to Book B. If some of the people are in group B then there are chances that the broker is actually making a lot of money from the lossed that you incur. This can be dangerous because then the broker may not be doing much for your upliftment which may be harmful for you.
The concept of fixed spreads
This is actually a myth that there are fixed spreads. Forex market is a market which is based on volatility and fluctuations. Huge profits are driven by huge fluctuations. The uncertainty in the market will not allow any broker to have fixed spreads in the marketing scenario. There is nobody offering you brokerage without charging a penny. So, be aware of brokers who say that. They charge you less for the trading but there is a trading cost absolutely involved. Only the market makers may have the discretion to offer fixed spreads because they are able to set the bid and ask the prices as they desire.
Regulations are important
Having regulatory bodies regulating the terms of the brokerage is a major page of concern. You have to be sure that the regulations are present in every brokerage. You should never rely on a brokerage with no regulations. Forex regulatory bodies have certain laws to be followed. Brokers under the regulatory body actually follow the laws and there are chances of very less fraud. On the other hand, brokers with no regulations driving them, may be a scam and may ruin your entire trading business unquestionably.
Be very careful while you choose the best broker because it is the key to your successful business. Brokers can enhance and ruin your career. So, it will be best to figure out the terms and policies carefully and properly before you choose the broker for you. Make a wise decision and have excellent trade.