When selecting forex brokers, watch out for these warning signs and if your forex broker exhibits many of these traits, take care to avoid them:
- Broker advertises opportunities that sound too good to be true.
- Broker has guarantees of profits or claims of high performance.
- Downplays risks or tells you that a written risk disclosure statement is just a routine formality imposed by the government.
- Do a poor job of explaining trading on margin.
- Tell you they will trade for you or that they conduct trades in interbank market.
- Require you to send or transfer cash on the Internet, by mail, or otherwise.
- Makes getting the company's performance track record difficult.
- Makes requesting for background information difficult.
- Broker advertises opportunities that sound too good to be true.
- Broker has guarantees of profits or claims of high performance.
- Downplays risks or tells you that a written risk disclosure statement is just a routine formality imposed by the government.
- Do a poor job of explaining trading on margin.
- Tell you they will trade for you or that they conduct trades in interbank market.
- Require you to send or transfer cash on the Internet, by mail, or otherwise.
- Makes getting the company's performance track record difficult.
- Makes requesting for background information difficult.
Source: http://www.cftc.gov/customerprotection/fraudawarenessandprevention/fraudadvisories/fraudadv_forex.html
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