4 Types Of Forex Brokers To Watch Out For

Deposit.redaksinet.com – Choosing a reliable Forex broker is not just a matter of regulation, smooth withdrawal of deposits or any other specific criteria. Long before learning these things, there was a measurement that was more common and actually easy to notice, but quite often overlooked by most traders.

The parameter is the authenticity of the forex broker, because so far it turns out that many fraudulent forex brokers are getting more and more cunning to disguise their guise. What’s even more surprising is that there seem to be various kinds of brokers like this, so it will be easier if we dissect this problem by identifying each type of fraudulent forex broker.

1. Broker Abal-Abal

Basically, this type of forex broker is usually able to provide trading services for clients who register, especially when they have just launched and are in the promotion stage to attract clients.

It’s just that fake brokers don’t have a clear identity. Neither regulatory information nor brokerage addresses, these types of forex brokers usually reveal their true identities. Maybe he is not regulated, but claims to be regulated. In another example, it claims to be regulated in regulator A, but its license number is invalid. At the extreme, fake brokers can provide fictitious addresses that when checked do not actually exist.

From the use of unconfirmed identities, it is clear that this broker abounds in unreliable security. If one day a bad problem occurs, where can you complain about it?

2. Asphalt Broker

Asphalt broker refers to a broker that at first glance looks genuine, but is actually a fake. The emergence of this type of forex broker is no joke, because it dares to resemble an official broker that previously existed. So it can be said, asphalt broker site managers deliberately imitate other brokers who are already popular to attract many clients.

Such actions are of course very misleading and detrimental, not only to clients, but also to forex brokers whose appearance and services are imitated. The main characteristics of this broker are using a domain that resembles a broker, sharing domain info on social media networking platforms, and claiming to be a forex broker that accepts client registration.

What you need to know together, two of the three characteristics above are not much different from the IB Broker website which of course cannot be considered an asphalt broker. Therefore, to be able to distinguish asphalt broker sites and IB sites, we can pay attention to the information about us or about us that is displayed, and how they provide services to clients.

An IB (Introducing Broker) usually only acts as an introduction or mentor to clients to understand the broker’s services, also providing referral links to real brokers. While asphalt broker frankly entices clients to open trading accounts on its website, and does not provide links to real broker domains.

3. MLM broker

Cases of MLM (Multi-level Marketing) fraud are already rampant in Indonesia, but the perpetrators have never been deterred from ensnaring their victims with various modes. Maybe because the product sales system has a lot to watch out for, they disguise the MLM program into a forex investment that promises fantastic and consistent profits.

For those of you who are used to dealing with MLM programs like this, you must have memorized the offer scheme well. In general, organizers will get a percentage within 1 week or 1 month.

The longer the funds remain in the account, the greater the promised profit. In addition, you are promised an additional percentage of the profits of new clients that you attract to register with that broker. Miraculously, you can get all the profits without doing anything related to trading, whether it’s analyzing prices or opening orders.

Now logically, which forex broker would want to pay clients for free like that? The main function of a broker is to be a liaison between traders and the forex market, not a place where traders deposit and grow funds without any trading action.

If so, then clearly the intent of the MLM broker is to trade client funds without a clear prospect. They usually target novice traders who really don’t know forex, and are easily lured in by bombastic promos with huge profits.

4. Fraud Brokers

Of all the types of scam forex brokers discussed in this article, this type of scammer is the most similar to a real forex broker. How can it be? For your information, a scam broker is a type of forex broker that is clearly identified, (sometimes) regulated, even offers trading services (not just an MLM investment program), but still takes advantage of the losses of its clients.

In order not to be easily identified, scam brokers usually carry out various fraudulent actions in a ‘subtle way’ which is difficult for parties outside the broker to trace. Some examples such as frequently manipulating prices, always using negative slippage, and complicating the process of withdrawing funds.

This type of forex broker is usually a blatant scam because it disappears as soon as many clients complain, but there are also secret types of scam brokers who fix their system after being criticized, then go back to cheating again once the client’s trust starts to return.

This type of secret scam forex broker is the most numerous on the market. Ironically, they are also the boldest to offer traders favorite promotions, perks, and ease of trading.

To recognize a scam broker like this is quite difficult, as the evidence gathering process requires a lot of effort, from browsing various broker testimonial forums to recording our own trading history.

Even then it can’t really be said to be valid, because apart from the broker itself, no one knows and can prove with certainty how the broker executes client orders.

The cover will only be revealed if the victim is busy reporting the fraud to regulators, as the agency will carry out an investigation and can officially punish the broker caught in the fraud.

But of course, this cannot be done if the scam broker has not regulated or falsified its regulatory status. Therefore, it is very important to at least choose a type of forex broker that is not abusive, to overcome the risk if at any time your chosen broker shows the characteristics of a scam.

Know the Characteristics And Beware Of The Types Of Forex Broker Scams

To make it easier to identify the types of forex brokers that are deceptive and avoid losses in the first place, here is an infographic that you can use as a guide.

Especially for more details on how to avoid a scam broker, please visit the article How to Choose a reliable Broker in 5 short steps.

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