There are a remarkable amount of results when you search for forex broker scams on the internet. Even if the forex market is gradually getting more regulated, there are still many dishonest brokers operating in the industry – and that is why you should only deal with the best forex broker in Malaysia.
It’s critical to recognize trustworthy and feasible brokers when searching to trade forex and to stay away from the latter. We must go through several processes before depositing a sizeable quantity of cash with a broker to separate the strong brokers from the weak and the reputable brokers from those with shady practices.
Trading is challenging enough on its own, but when a broker uses strategies that are detrimental to the trader, it may be very difficult to turn a profit.
Identifying Forex Myths and Facts:
Forex traders need to learn to distinguish reality from fiction while looking into possible forex brokers. For instance, we can think that all traders lose money and never turn a profit when confronted with a plethora of forum postings, articles, and negative remarks about a broker. The traders who lose money then publish information online that attributes their unsuccessful trading tactics to the broker (or some other external factor).
Beginner Traders:
It is also perfectly conceivable for rookie forex traders to fall short of following a tried-and-true trading strategy or plan. Instead, they place trades based on psychology, and there is virtually a 50% chance they will be right (for example, if a trader believes the market must move in one direction or the other).
According to the top forex broker Malaysia, rookie traders frequently take positions when their emotions are at their lowest. Because they are aware of these younger traders’ tendencies, seasoned traders intervene and change the direction of the deal. This confuses rookie traders and gives them the impression that the market or their brokers are trying to rip them off and steal their gains.
This is not the case the majority of the time. Simply put, the trader failed to comprehend market dynamics.
Broker errors:
Losses can occasionally be the broker’s responsibility. This might happen when a broker tries to earn trading commissions at the cost of the client. Brokers have reportedly adjusted quoted rates arbitrarily to activate stop orders while other brokers’ rates have not changed to that pricing.
Fortunately for traders, this kind of circumstance is unusual and unlikely to happen. One must keep in mind that trading is typically not a zero-sum game and that brokers largely profit from greater trading volumes through fees. In general, long-term clients who trade often and maintain capital or turn a profit are better for brokers.
Trading behavior:
The slippage problem is frequently a behavioral economics problem. Inexperienced traders frequently suffer panic. They press their purchase key out of fear of missing a move, or they press their sell key out of fear of losing more.
The broker is unable to guarantee that an order will be executed at the intended price in situations with variable exchange rates. Slippage and abrupt motions follow from this. For stop or limit orders, the same holds. While some brokers promise the fulfillment of stop and limit orders, others do not.
Slippage occurs, markets shift, and we don’t always receive the price we want—even in more open marketplaces.
Communication is crucial:
When communication between a trader and a broker deteriorates, actual issues may start to arise. These are typical warning signs that a broker might not be looking out for the best interests of the customer if a trader does not receive responses from their broker or if the broker gives evasive answers to a trader’s concerns.
The trader should be informed of and given a resolution to such issues, and the broker should also be helpful and show good customer relations. The trader’s inability to withdraw money from an account is one of the most harmful problems that may occur between a broker and a trader.
The Pull of Churning:
When paid commissions for buying and selling shares, brokers or planners may occasionally give in to the urge to complete transactions only to earn a commission. Churning, a word the Securities and Exchange Commission (SEC) invented to describe when a broker arranges transactions for reasons other than the client’s advantage, is a crime that can be used against those who engage in this activity often.
The important thing to keep in mind in this situation is that the transactions you conduct do not raise the worth of your account. Churning is only possible if your broker is heavily trading your account and your balance either stays the same or gets smaller over time if you have granted them trading rights over your account.
Assess your skills:
When you witness buy and sell activities for assets that don’t align with your investing goals, that might be one of the most obvious symptoms of churning. For instance, you shouldn’t notice buy and sell activities for small-cap equities or technology companies, or funds on your records if your goal is to produce a steady current income.
Because put and call options may be utilized to achieve several goals, churning with these derivatives can be much more difficult to detect. However, you should typically only purchase and sell puts and calls if you have a high-risk tolerance. If done wisely, selling calls and puts can bring in current money.
Also Read:- https://www.bladnews.com/even-the-best-forex-trading-platform-in-malaysia-is-not-safe-for-the-best-international-forex-brokers/
