If you're going to get into retail forex trading you're going to need to find a legitimate forex broker. Finding a legitimate forex broker can be difficult for a newcomer to forex trading. There's no shortage of information out there but so much of it is contradictory it makes your head spin just trying to figure out what is truth from what is fiction.
This video from forex trader Stephen Story gives you one point of view about your average retail forex broker; but you should pay attention to the point where she references "dealing desk" because when he talks about brokers trading against you he's referring to traders who run a dealing desk operation.
You will generally be in safer hands trading with a retail forex broker that operates a non-dealing desk operation; but also keep in mind that there's such a thing as false advertising. Just because a broker says they're NDD doesn't mean they are really a non-dealing desk operation.
The general rule of thumb is to go with most highly funded brokers. A broker with net adjusted capital over 50 million is usually more trust worthy than a broker with net adjusted captial of $2 million. In fact, if you find a broker with net adjusted capital under 5 million still in operation you should probably steer clear. The CFTC requires forex brokers to maintain net adjusted capital above $5 million.
Also consider the number of people who trade with the company. Even if you find a handful of scam complaints about a company, consider how many traders have accounts with them and how long they have been in operation when trying to decide whether or not to go with the scam complaints you read. If 50,000 people trade with a broker and 1000 of them leave complaining that the broker is a scam, but 49,000 of them continue to stay on for years and the company continues to thrive, it might be a smarter choice not to put too much stock into what the scam complainers are saying. You can never please 100% of the people all the time.
This video from forex trader Stephen Story gives you one point of view about your average retail forex broker; but you should pay attention to the point where she references "dealing desk" because when he talks about brokers trading against you he's referring to traders who run a dealing desk operation.
You will generally be in safer hands trading with a retail forex broker that operates a non-dealing desk operation; but also keep in mind that there's such a thing as false advertising. Just because a broker says they're NDD doesn't mean they are really a non-dealing desk operation.
The general rule of thumb is to go with most highly funded brokers. A broker with net adjusted capital over 50 million is usually more trust worthy than a broker with net adjusted captial of $2 million. In fact, if you find a broker with net adjusted capital under 5 million still in operation you should probably steer clear. The CFTC requires forex brokers to maintain net adjusted capital above $5 million.
Also consider the number of people who trade with the company. Even if you find a handful of scam complaints about a company, consider how many traders have accounts with them and how long they have been in operation when trying to decide whether or not to go with the scam complaints you read. If 50,000 people trade with a broker and 1000 of them leave complaining that the broker is a scam, but 49,000 of them continue to stay on for years and the company continues to thrive, it might be a smarter choice not to put too much stock into what the scam complainers are saying. You can never please 100% of the people all the time.
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