There are several types of brokers on Forex. Some of them work honestly, others are called "black". They're real scammers, thugs from the big road.
There are grey Forex brokers, they're half or a quarter cheaters. Fraud schemes of such companies are in step with the times and constantly improving.
The types of forex brokers
To avoid getting caught in the shaggy paws of swindlers, you need to familiarize yourself with the security rules and learn how to cooperate before you start trading.
1. Brokers who bring their clients' trades to the real market. These are banks, brokers-ECN, brokers-STP.
2. "Black" brokers, scammers, do not bring clients' trades to the real market, but close them on themselves.
3. "Kitchen", fraudulent companies, do not bring the deals of their clients to the external market, tie the trading of clients to themselves. Sometimes they allow withdrawing the client's deposit.
4. "Kitchen, in which you can sometimes partially withdraw profits." Cheating customers, the "kitchen" may allow to withdraw the deposit and even part of the profit, provided that it is not a very large amount, up to five thousand units.
5. "Half Kitchen", a skilful manipulator, combines scam and profitable trading for the chosen ones.
6. SCAM offices have been working honestly for some time, attracting many clients. Then, having collected considerable funds from naive and greedy investors, they suddenly dissolve.
How do ECN and STP brokers work?
A daredevil who decides to conquer the raging waves of Forex should know what ECN and STP brokers are.
ECN broker (electronic communication network) a system that unites banks, brokerage firms, retail traders to buy and sell and speculate on the international currency market. These organizations work without intermediaries.
ECN offers tight spreads, high liquidity, speed of operations and takes a decent commission from working capital.
STP-broker (straight through processing), works like ECN companies. There are no dealing centers, all client requests are sent directly to liquidity providers. Which can be several. Usually these are investment banks.
The execution speed of operations on the STP platform is high. Brokers specialize in certain trading instruments.
The activity of such brokerage companies is licensed and seriously regulated by the state supervision authorities. Supervisors are strictly punished.
How to calculate a Forex cheater
The principle of operation is approximately the same for all scammers. There are differences in the style of separation of snares, the nature of communication with clients and the ability to withdraw funds from the deposit.
The most dangerous swindlers, "black" brokers, have the acquired bases of clients in relation to which act aggressively and impudently.
Such villains do not stop at anything, their victims become invalids, decrepit old men or children. They press psychologically, in the Hamish way, they force to open an account and start trading.
As a rule, the bandits have no regulation, their license documents are fake.
"Kitchens" and "semi-kitchens" may be able to withdraw a partial deposit from a client, even part of the profit if it is not large. The amount of profit does not exceed five or ten thousand dollars.
Some "half kitchens", attracting customers, allow you to earn units.
A reliable forex broker how to choose one.
Before you start buying and selling at Forex, register and replenish your deposit on the brokerage platform, you should get acquainted with the security rules at Forex, study the information about the brokerage companies.
You can find a huge number of negative reviews about Forex brokers in the Internet. You can judge by the comments about the traders' activity.
However, often negative reviews are written by competitors or entrepreneurs, who clean up the network from the negative for money and make good money on it.
Before choosing a broker on the foreign exchange market, it is necessary to study license documents and rules of cooperation with the broker. It happens that the trading conditions are unfavorable for the client.
It is preferable for a beginner speculator to open accounts with the smallest deposit and make transactions, trading with a small leverage.
Reliable brokers, as a rule, have a long history. Such broker is Umarkets. The company has been operating in the European Union since 2008 and has a license for brokerage activities.
To protect itself from fraud, it is necessary to study the terms of cooperation, how the personal data provided by the client will be saved.