Before trading, you need to select a broker and open a trading account。A forex broker is a company that facilitates online trading to make a profit from the difference between the bid and ask price (forex spread)。However, there are currently hundreds of forex brokers in the world, so care needs to be taken when choosing a broker to avoid scams and other malicious acts。

So, how to choose a good broker？The easiest way is to ask a friend who is experienced in foreign exchange trading to recommend it.。But if you don't have friends, don't worry。

Here are the main aspects you need to consider when choosing a broker:

1.clear identity

2.regulated

3.Good customer support

4.Support transaction function

Let's discuss one by one in this article。

1.clear identity

A good broker must have a good record, from the time of establishment, the company to the office.。If the identity of the broker is ambiguous or not easily traceable, it can become very difficult for traders to seek legal redress or claims in the event of fraud, misconduct or financial mishandling。

Clear identity also helps build trust and credibility among traders。If the identity of the broker is transparent, traders can be assured that they are dealing with a legitimate, reputable entity。This is crucial for an industry where trust is crucial, as traders entrust their funds and personal information to brokers.。

Usually, a reliable broker will provide a complete set of contact details, including live chat, email, phone and official access address。By contrast, when you encounter a broker with only a post office box or a fake address, you need to be cautious。Keep in mind that reputable brokers attract more traders and contribute to long-term success in the competitive Forex market。

Unidentified real cases of foreign exchange fraud

A few years ago, there was an unidentified fraud case。The following is the chronological order:

Founded in 2007, Forex-Metal is a Bulgaria-based broker that initially appeared to be a viable option for traders due to the offers and favorable trading conditions it offers.。From the start, Forex-Metal claimed to have been licensed by Belize's regulator, the International Financial Services Commission (IFSC), in an attempt to build customer trust in itself.。However, the existence of this license is not clear and cannot be verified。

In 2014, traders had problems with failed withdrawals, often an early sign of fraudulent activity.。In addition to the failed withdrawals, Forex-Metal's customers also experienced disruptions to the trading platform and website.。In 2016, the FPA (Forex Peace Force) officially declared Forex-Metal a confirmed scam broker, reminding traders to avoid using。

2.Regulatory status

Regulated brokers have proven to be mostly more reliable than unregulated brokers。A regulated broker is one that is licensed from at least one jurisdiction's financial regulator。This means that brokers are regulated by the region and must comply with the rules set by the authorities, reducing the likelihood that they will carry out certain plots to compromise the safety of their customers.。

Each country has a specific set of rules that must be observed。For example:

● CFTC - List of Forex Brokers Regulated by the CFTC

● FCA - List of Forex Brokers Regulated by the FCA

● ASIC - List of Forex Brokers Regulated by ASIC

● CySEC - List of Forex Brokers Regulated by CySEC

Usually, brokers show their regulatory status on their official website。However, it is not uncommon for brokers to claim to be regulated in a certain country, even though this is not the case。That is why you need to conduct a thorough study and check the validity of the statement by visiting the website of the regulator。

There is nothing wrong with choosing to use an unregulated broker because being unregulated does not always mean fraud。However, it is best not to choose black-hearted forex brokers who are clearly lying about their regulatory position, as this is clearly not a sign of a trustworthy service.。

Real cases of foreign exchange scams with unclear regulation

MFX Broker was originally established in 2006 under the name Masterforex and licensed by IFSC Belize.。In the first few years after its launch, MFX became popular among traders worldwide.。

However, after rebranding, doubts began to emerge。The status of their license is still "in process," and in 2015, they launched an unrealistic investment plan that promises a fixed return of 3% per month to up to 100% per year.。

A year later, the broker's problems escalated。Traders and IBs (Introducing Brokers) were unable to get paid, and the Belize IFSC announced the revocation of MFX's license.。In addition, some traders are having difficulties with withdrawals, leading many to accuse MFX of engaging in fraud.。

Forex Peace Army (FPA) finally advises against trading with MFX brokers as it has proven to be a scam with lots of problems。At present, the official website of the broker has been shut down and the company has ceased operations.。

3.Good customer support

A good forex broker must be able to provide client support at least five days a week。It is even better if the broker offers multiple ways to communicate with the support team, including:

● 电子邮件

● 电话

● Fax

● Instant chat, etc

Especially when we need quick help to solve technical problems when trading, instant chat can be very useful。

The quality of customer support may vary from broker to broker, so be sure to test before signing up。One of the ways you can try is to make a list of questions about their services and ask them through one of the available channels。Then you can judge their reaction speed and insight based on their answers。

You might say that good pre-sales service is to be expected and there is no guarantee that after-sales service will be equally satisfactory。However, if you find that the broker's customer support even during the pre-sale period is bad, then once you become a customer, customer support is almost impossible to improve。

4.Support function

Having examined the previous aspects, it's time to look at the actual trading services and facilities offered by the broker。In general, traders prefer brokers that offer the following services:

Low spread: the closer to 0, the better.

● Leverage: Leverage starts at 1: 100。Extremely high leverage can be dangerous for traders because the risk is high, while lower leverage may limit your opportunities。

● Trading platform: The most commonly used trading platform for forex traders is MetaTrader。However, some brokers may offer different platform services。As long as the operation is smooth, the order can be executed quickly, easy to browse and complete technical analysis tools, there is no problem。

● Demo Account: This is a free account that can be used to test the broker's platform without depositing any real funds。

● Withdrawal methods: from the most traditional bank wire transfers to electronic payments such as PayPal, Skrill and Neteller。

What we have mentioned above are the basic criteria for a good broker in general, but remember that every forex trader has its own unique needs。Therefore, when choosing a broker, you also need to focus on the features they offer。If they can't provide the trading system you need, switch。