The modern-day foreign exchange market known simply as Forex has been around for half a century and it’s become a highly profitable business for those who have taken the time to learn the market and honed their ability to predict its volatile trends.
Sure enough, in order to make a living out of trading Forex, you need two crucial things: plenty of time (to learn, first and foremost, and to keep a close eye on what’s happening worldwide) and a vast amount of knowledge. Luckily, you can make money via Forex without these, by working with Forex brokers. But are they legit?
What is a Forex Broker?
Let’s start with the basics: what exactly is a broker? Simply put, a broker is a middleman that facilitates transactions between sellers and buyers. A Forex broker, therefore, is that person who lends its foreign exchange expertise to private clients in the form of professional advice, portfolio-growing opportunities, educational and research material, so on and so forth. Evidently, you can even buy Bitcoin or Ethereum through a Forex broker, because trading is not limited to fiat money only.
According to a recent study, there are in excess of one thousand Forex brokers operating worldwide and the number is only increasing because more and more people turn to trading for a relatively passive source of income.
Are All Forex Brokers Legit?
There are honest people and scammers in any given commercial enterprise, so the answer to this question is a quick and resounding “No”. Of course, Forex is a 100% legitimate affair, since it’s a regulated marketplace, but there are many “brokers” that are so far from being regulated that they don’t even show up in the BASIC, which stands for the Background Affiliation Status Information Center.
The scamming itself can come in numerous shapes and sizes: promises of huge yearly returns, miraculous algorithms that purportedly do all the work for you, fail-safe guarantees that you’ll never lose any money (which is downright impossible considering the volatility of the market) and the ever-present pyramid schemes.
How Do I Know If a Broker is Legit?
We’ve already touched on this subject in the previous section, but there are a few more ways to ensure that you’ll be working with a scammer or a lawful broker:
- Read the reviews: People don’t like to be scammed, so you can rest assured that they’ll warn others that the broker is a fraud.
- There is no customer service: In other words, there’s no one there to provide answers to your queries. Needless to say, this is a massive red flag, since it hints at an opaque operation.
- The broker doesn’t have a website: This is beyond shady. It can be said of something that does not exist on the internet that it does not exist at all, as the modern adage goes.
Whether you’re interested in trading fiat money or cryptocurrency, hiring a professional broker is highly recommended and now you can do that without the risk of losing your money to scammers.