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EP149: Which Red Flags Should You Avoid
What’s the best way to know your broker?
In this episode of Truth About FX, Walter digs into the most common red flags forex traders should avoid. He gives some useful hints on where to look for the “best” brokers — and the reason why they stay at certain places — and how do you know which broker to trust? Walter puts out a simply way to test this.
Download (Duration: 07:33 / 8.6 MB)
In This Episode:
00:49 – be real
01:34 – burned to ashes
03:00 – test them
04:51 – “A” account
06:05 – drag their feet
Tweetables:
Where does your broker regulate? [Click To Tweet].
Test your broker [Click To Tweet].
Never give 100% [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. We’ve spent a lot of time on the pitfalls inherent in each of us traders and this is a question coming from a reader by the way. What are the most common broker red flags we should be avoiding?
Walter: This is a good question. Overall, the most common complaints about brokers are unfounded — which I know is kind of controversial. If you think about it… First of all, let’s just be real. There are dodgy brokers, no doubt, and that’s just a fact to life and it’s often like futures traders. You hear people like futures traders point to forex and say, “Oh, it’s a bunch of baloney. Forex is a big scam because the brokers are all dodgy.”
That’s not true. I mean, if you think about it if you’re running a business and you start stealing money from people — which is basically what dodgy brokers do — then you’re going to get a bad reputation.
I know for a fact like here in Australia, there’s one broker that doesn’t even market anymore. They’re actually kind of like have an introducing broker that does all their marketing for them because they basically burned their reputation into ashes.
It does happen and I’ve had accounts with dodgy brokers. Here’s what I would say: there’s a couple of things that you can look at. One, you can look at where they’re based and where they regulate. Now, that’s not going to tell you everything but it’ll tell you something.
You’re going to need to ask why would someone be based in St. Vincent and the Grenadines. It could be for tax purposes, it could be because they wanted to take on US clients and they don’t want to be based in the US to get slapped.
It could be lots of reasons why so that’s one thing. Obviously, if you go to a broker who is regulated in the United Kingdom, in the United States, Australia and even places like Singapore and New Zealand or Canada, those are great places to look for brokers.
That’s one thing to look at where their head offices and where they’re regulated. The other thing is because you can actually have a broker who is in the United Kingdom but their main office is in Malta so they’re not actually subject to the same regulations that a broker would be if their head office i...
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By Walter Peters (FXJake) and Hugh Kimura (Trading Heroes)What’s the best way to know your broker?
In this episode of Truth About FX, Walter digs into the most common red flags forex traders should avoid. He gives some useful hints on where to look for the “best” brokers — and the reason why they stay at certain places — and how do you know which broker to trust? Walter puts out a simply way to test this.
Download (Duration: 07:33 / 8.6 MB)
In This Episode:
00:49 – be real
01:34 – burned to ashes
03:00 – test them
04:51 – “A” account
06:05 – drag their feet
Tweetables:
Where does your broker regulate? [Click To Tweet].
Test your broker [Click To Tweet].
Never give 100% [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. We’ve spent a lot of time on the pitfalls inherent in each of us traders and this is a question coming from a reader by the way. What are the most common broker red flags we should be avoiding?
Walter: This is a good question. Overall, the most common complaints about brokers are unfounded — which I know is kind of controversial. If you think about it… First of all, let’s just be real. There are dodgy brokers, no doubt, and that’s just a fact to life and it’s often like futures traders. You hear people like futures traders point to forex and say, “Oh, it’s a bunch of baloney. Forex is a big scam because the brokers are all dodgy.”
That’s not true. I mean, if you think about it if you’re running a business and you start stealing money from people — which is basically what dodgy brokers do — then you’re going to get a bad reputation.
I know for a fact like here in Australia, there’s one broker that doesn’t even market anymore. They’re actually kind of like have an introducing broker that does all their marketing for them because they basically burned their reputation into ashes.
It does happen and I’ve had accounts with dodgy brokers. Here’s what I would say: there’s a couple of things that you can look at. One, you can look at where they’re based and where they regulate. Now, that’s not going to tell you everything but it’ll tell you something.
You’re going to need to ask why would someone be based in St. Vincent and the Grenadines. It could be for tax purposes, it could be because they wanted to take on US clients and they don’t want to be based in the US to get slapped.
It could be lots of reasons why so that’s one thing. Obviously, if you go to a broker who is regulated in the United Kingdom, in the United States, Australia and even places like Singapore and New Zealand or Canada, those are great places to look for brokers.
That’s one thing to look at where their head offices and where they’re regulated. The other thing is because you can actually have a broker who is in the United Kingdom but their main office is in Malta so they’re not actually subject to the same regulations that a broker would be if their head office i...