Forex Broker verification – Tutorial and tips
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Forex trading has become a hard task because of many frauds operating as forex brokers today. There are many testimonies of people who have gotten scammed after trying to trade forex. They trap new traders with false advertisements and cheat them into opening accounts on their sites. After they deposit funds and trade, they are unable to withdraw funds. Some of them keep losing when they attempt to trade. These forex brokers operate illegal businesses intended to loot from their clients. But, there are some legitimate and credible forex brokers. we will look at how to check the licensing of a forex broker and verify that it is safe to use.
How to verify a forex broker
Here are some simple steps to follow if you need to know how genuine a forex broker is;
Conduct an online review about a forex broker
It is a fast way to differentiate between genuine and fraud brokers. It is through checking for reviews from other forex traders. If the forex broker is legitimate, then it is popular among other forex traders.
Get forex experts at forex forums, where they discuss forex trading issues. You must be able to sieve information from reviewers because some of them are biased.
It is normal to lose money on forex and there are forex brokers who tend to blame the forex broker for their losses. It is why you should distinguish between positive and negative comments.
The best way to get honest reviews is by looking at the trading experience of the reviewer. Expert forex traders have trustworthy reviews because they understand the nature of forex trading.
Once you have done this, you have a clear picture of the broker you are dealing with. It is the first step to take and get a list of reliable forex brokers from forex experts.
Visit the forex brokers website and find its forex trading license number
All forex brokers have websites that traders can use to access the website version of their site. It is also where they market the services they offer and give information. Once on their website, look at the license and regulation page for a license number.
The page has details on the organization regulating it for example;
- Commodity Futures Trading Commission (CFTC) regulates US-based forex broker
- Financial Conduct Authority (FCA) regulates UK based forex broker
- Australian Securities and Investments Commission (ASIC) regulates forex brokers in Australia
Each country that allows forex trading has a commission to regulate forex brokers. They control and monitor forex brokers within their jurisdiction.
If you don’t get this information on their page, ask directly from their support team. If they are genuine, they have no reason to hide this from you.
Trade forex with the best conditions and a regulated broker:
Broker: | Review: | Advantages: | Free account: |
|---|---|---|---|
1. Capital.com  | # Spreads from 0.0 pips # No commissions # Best platform for beginners # No hidden fees # More than 3,000+ markets | Live account from $ 20: (Risk warning: 78.1% of retail CFD accounts lose money) | |
2. RoboForex  | # High leverage up to 1:2000 # Free bonus # ECN accounts # MT4/MT5 # Crypto deposit/withdrawal | Live account from $ 10 (Risk warning: Your capital can be at risk) | |
3. Vantage Markets  | # High leverage up to 1:500 # High liquidity # No requotes # MT4/MT5 # Spreads from 0.0 pips | Live account from $ 200 (Risk warning: Your capital can be at risk) |
(5 / 5)Verify the license number on the regulator’s website
If you find the license number, visit the regulator website, which licensed the forex broker. These regulators have a list of the forex brokers that they regulate. It is to confirm the details on the forex brokers website.
Most regulators have a search bar, to type in the forex broker license number or name. If the forex broker is licensed, the results will come with all its information. Check if the license number matches what you have from the forex broker website.
Some forex brokers impersonate a licensed broker using a similar name. Confirm the information you have to avoid a similar case. They also counterfeit a PDF number and a license number. When you are on the regulator’s website, check the website address. If it matches the address used to access the forex broker.
There is a high possibility that the forex broker is a scam if you search the regulator’s website and no details emerge. Try and go through most of the regulators stated on the forex broker website. Some get licenses from many organizations from different countries.
Test the Forex broker
Once you have confirmed the license number, the next step is to test the forex broker. This step is crucial because it helps verify whether the forex broker lives up to its promises. On its website, you can see all the functionality and features.
The best way to research if it is true is through testing the site. Find an account they offer with the lowest initial deposit, like the micro, mini, or cent account. Examine the functionality if it is easy to navigate through the platform. A demo account, trading resources, trading tools, and trading platforms.
Deposit the least amount you can trade and trade. It is to help you to examine latency, liquidity, and how effective trading tools are. It will also help you distinguish if it is credible. Since it is easy to see if it executes its functions according to the service-level agreement (SLA).
Make a withdrawal to check how long it takes to withdraw funds. It should be as long as they state on their website or the SLA. It is also the best moment to test the customer care and support team.
Reach out to them through their contacts such as live chat, phone numbers, and emails. It assists to know if you are dealing with a robot during live chats, which provide little to no assistance.
Ask questions about the platform and gauge the response time and quality of response. Genuine forex brokers are fast and comprehensive when answering questions.
It is crucial to check the service quality of the forex broker gives to its clients. It is also a way to get a clear picture of the forex broker without input from someone else.
Look at other Forex brokers before settling for one
Many forex brokers have come up in the industry. It does not hurt to go through some of them and see how they perform against others. To get a good forex broker, you search among them to find a reliable one.
There is a lot of information and reviews about forex brokers online. Follow reviews by reliable forex reviewers if the verification process is tiring.
Trade from 0.0 pips over 3,000 markets without commissions and professional platforms:
(Risk warning: 78.1% of retail CFD accounts lose money)
FAQ – The most asked questions about Forex broker verification :
Is there any verification for forex brokers? How can I know if the forex broker is legit?
Yes, forex broker verification is done, and it is only after they obtain their license to provide their services within the market.
If you want to know if the broker is legit, know that all the brokers who are trading within the forex market must display the registered ID with the regulatory bodies on the official website. So, go ahead and check the same now.
How can I trust a broker?
If you are in doubt about the forex broker verification or are unable to satisfy your curiosity about a particular one;
Check the independent review sites. They are indeed a goldmine.
Get to the SEC or any other associated body directly.
You can take the word of the people whom you trust.
Make sure to have a direct conversation with the broker through their customer service to clear all your doubts.
Is it an intelligent decision to choose a forex broker?
In case you are about to start making your investment, the investment broker will be a huge asset considering you will be new within the market and would need a guide.
The investment brokers act as the go-between the sellers and the buyers within the forex market.
See more articles about forex trading here:
Last Updated on April 14, 2023 by Andre Witzel
