The internet was instrumental in making the forex market accessible to the common man. However, like everything else in the world, the fact that the internet makes it very easy for Forex brokers to set up shop also means that it is easy for irresponsible entrepreneurs to start their own incompetent businesses.
Why Is It Important To Be Able to Differentiate?
The relationship between a forex trader and a forex broker is one that the former will rely upon for his future successes. Without a good forex broker behind him, a forex trader cannot be successful in the forex market.
Forex brokers provide their registered traders with everything from forex news and forex exchange rates to the tools needed for assessing this information. More importantly, FX brokers bring traders in contact with other traders so they can buy or sell currency pairs.
Thus, it becomes very important for a forex trader to be able to separate between unprofessional and unreliable forex brokers. Without this knowledge, the forex trader would become a victim of less than perfect FX brokers. Here are some things that you should be checking to sort through all the brokers vying for your business.
In South Africa, the Financial Services Board gives out licences to genuine and reliable forex brokers. While most brokers active in the market would have these licences, it would still be prudent for you to check if they do because this would help you remove forex scams from the picture. Forex brokers that have these licences can be considered to be serious service providers who are in the business for the long term.
Professionalism is a quality that is very hard to pinpoint because of its intangible nature. However, this does not make it less important for forex traders. You should assess all the forex brokers you are considering in terms of how professional they are about their business.
Two ways that you can use to do this is by checking the quality of their website and checking the integrity of their marketing campaign. Professional FX brokers would have a website that would look professional with all the right components.
Similarly, the marketing campaigns of professional and responsible forex brokers would not make tall and false claims to lure in forex traders. Instead, they will provide information in a balanced manner.
It is also the responsibility of forex brokers to provide, at least, the basic services to forex traders registered with them. For instance, you should look for brokers that provide timely and accurate market information, the important trading tools with enough indicators, and a special order system. Tying yourself down to brokers that do not provide the minimum of these services would not lead to your success.
Finally, professional and responsible forex brokers would also make sure that they have a good customer support system where their registered traders can get in touch with them for help if some sort of a technical problem props up.