Hundreds or brokers scam thousands of traders every day.
Recently I visited a Forex anti-scam forum and I was literally shocked by how many people get scammed by their brokers. These brokers take your money, allow you to trade, but when it is time to cash out your money they give you nothing but excuses.
Did you know most of these brokers have one thing in common?
They’re based out of small nations which have very little or no regulations on the Forex industry.
When you’re dealing with brokers from large nations such as the US, the UK, Australia, Canada ect you’re much safer as the brokers is strictly regulated. However, trading with brokers from small nations such as Mauritius, Panama and the Seychelles can be risky. Often smaller nations have.
- Little to no rules in place to regulate the Forex industry.
- Little to no organizations that deal with misconduct within the Forex industry.
- Low minimum capital requirements for brokers.
In the US it literally takes tens of millions to start up a Forex broker. In Mauritius you could probably start a brokerage firm for less than $100k. In other words these brokers are usually very poorly funded. So when they inevitably run unto money problems they can start eating into your hard earned cash.
So what’s the solution?
It’s simple, only trade with brokers from large and wll regulated nations such as.
There are other countries that are safe but I am not going to list them all.
Research before You Commit
When you’re looking for a broker take a good look around their site and find out where their head office is located. If it is located in a small unregulated nation do not risk giving that broker your money.
If they claim that their head office is in regulated nation like the US you should not take their word for it. You should always call them and ask them if they’re US based. If they say they are then ask for their NFA registration number. The visit the NFA site and check the number to make sure. You can never be to safe. If the broker claims to be UK based asked for their FSA number ect.
There are many brokers who claim to be US based yet they clear in countries such as Panama. So in reality they probably have a small call centre in the US but all the money goes to Panama. This means they will likely has no US regulation.
Be smart, ask questions and be suspicious!
Below is a list of regulatory agencies for specific countries. Most of these sites give you the ability to check a brokerage company’s registration number online. If they don’t you can always call.
Below is a list of regulatory agencies for smaller nations which are notorious for hosting shady brokers. I do not know how much help it will be but if you have been scammed by a broker from a nation below try contacting the regulatory agency.
Been scammed by a broker who’s country is not listed? Let me know and I will do some research to find the proper regulatory agency for that country.