Many traders or future traders shop for a broker to work with and find endless reviews on the web, and not all are genuine. Here are 5 ways ways to separate the good from the bad.
There are lots of sites that specialize in forex broker reviews and lots of talk about brokers in various forums. While a lot of information comes from real experience of people that have used a brokers’ services, some may have a hidden agenda of promoting the broker. Promoting a broker is OK, as long as it’s done in a transparent way. Let’s see the 5 ways to identify fake reviews:
- Look at the site: if this officially a forex news site / education site, but the first thing that you see is a big list of forex broker reviews, then you can take the reviews with a grain of salt – the site’s sole purpose is to make money on affiliates and not necessarily have up to date news. So are the reviews genuine?
- Check the link: If you see something like landingID=3 or affiliate=fxsite at the end of the link that leads from the review page to the broker’s site – this is definitely an affiliate link – the reviewer gets paid for referring clients to the broker. Getting paid for referrals is legitimate, but hiding the fact that the reviewer is paid for the service isn’t proper. For site owners, the solution is to write a disclosure about the affiliation. This way, the readers can judge for themselves if this genuine or not, having the knowledge about the affiliation deal.
- Option to comment: If the site has an option to add your own comment on the review, actually your own mini-review on the broker, that’s a good sign of openness. But this may be tricky as well. Try commenting and see if your comment really appears on the site, or if it’s held for moderation forever. Sometimes comments are automatically posted, but are later deleted when they aren’t convenient. Such sites’ openness, but it’s fake.
- Check the forum member: if a forum member posts a reply with a recommendation about a forex broker, even without an affiliate link, he could be associated with the broker. If he’s officially representing the broker, that’s like a full disclosure – you can judge him for yourself. But if he’s not? Well, check out what else he wrote on the forum. If he’s a regular participant, it could be genuine, but if his main agenda is promoting the same broker, don’t take his word. I must say the Forex Factory is doing a good job at getting such promoters out of the forums.
- Search the web for negative commentary: A common check if to search for the name of the broker with the word “sucks” – this will easily bring you to negative reviews, and you can see how bad they are. Getting results for this search doesn’t mean the broker is necessarily bad, but this is how you’ll get some negative words as well.
Do you have additional ideas about how to find false broker reviews?
After you finished reading the review, check out the broker with forex demo account – this is must when starting with a new broker, even if you’re a seasoned trader.
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21 Comments
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Thanks for your comment Michael. Yup, also negative comments could be fake. For most people,reading the shiny prospects of the brokers isn’t enough, and they seek the advice of fellow traders. Unfortunately, this field attracted too many fakes. Can you point out sites that have more reliable reviews?
if you ask me, review sites (all of them) can’t be trusted. most of comments are made by brokers for brokers against other brokers. and you are on the post saying that some comments may be approved and some may not – this would really depend who sponsors that website and if the website has an incentive to promote this or that broker. broker reviews with affiliate links cannot but trusted.
however, googling for “broker name+scam” will result in the same amount of fake review just like with positive reviews – as i said, many brokers write about other brokers – this is competition.
bottom line: review sites are scam themselves but you can’t do a thing against basic human psychology of looking for someone else’s opinion and this is why these sites prosper.
Basically , it is a simple matter to assess a forex broker. The more they advertise , the more crooked they are. These brokers survive on a “pool” of suckers , as suckers self destroy , more suckers are needed to fill the “pool”, hence the advertising.
Open a demo account and watch the emails with offers come along……….this is a sure sign of a broker that should be avoided.
Another telltale sign is the offer of incredible leverages , up to 500:1 even……….give the broker your money even faster.
yohay, as i wrote in the comment: i wouldn’t trust any brokers review site and that includes the most ‘known and reliable’ ones in the industry.
what i would do if i were a trader looking for an honest opinion is ask my friends (but make sure they are friends and not people with interests on forex forums).
second thing i would do is that i’d open an account only with big and established brokers – not because they are big but because these brokers have much smaller incentive to commit fraud than small brokers who completely rely on clients losing their money and may from time to time do nasty things with their clients’ positions. such a list can be found on my site where i rank the brokers by their volumes: http://forexmagnates.com/monthly-retail-forex-volume-report-for-january-2010-%E2%80%93-109-billion-daily-traded-volume/
of course these doesn’t mean these brokers are all fair and square but this should mean they will think twice before risking their status for your money.
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I have to say I am not quite sure about forex brokers one comment suggested that the genuine brokers do not need reviews all over the net.I should imagine their reputation amongst the traders through word of mouth is what keeps them going. Having said that it is hard to know if the reviews are genuine or not and you do have to do your homework, I guess if your not prepared to do your research on finding a good broker how will your research or lack of show up when making your trading decisions food for thought!
Always check if a brokerage firm is regulated or not. I made the same mistake earlier and never got my money back from scam brokers (like plus500, avafx, forexgen).
I deposited money to leaderforex, and my experience with this broker has been positive for several months. At least they are regulated, scalping is allowed, and these guys send my money as soon as possible.
To me, it really takes pretty long time to find the right broker according to your needs. I think the best way is to deposit the minimum amount, and then to make several trades, and try to withdraw. Then see what happens…
can i know, who broker u recomended for me?
Excellent article! I don’t know a lot about forex so this definitely helps.,
Easy-Forex-is an Israeli company with tricks and lack of support trading company. The current re-structuring of management that took place recently made the company even more unprofessional for easy trading. The key and experience people from marketing, sales and dealing room departments left the company this year. At the beginning I had a very good relationship and great services but our partnership start deteriorating once the major changes happen. I burn substantial amount of my money trading with them because i was not able to safe my position by depositing funds to my account to move my S/L further away from the market price and I had money in my Credit card but the management decided to put some type of restriction limit that caused me $20K. I have being with the company for 3 years, gave them all requested documents and everything they have requested. In order to remove my restriction I had to sign off on my transactions, which I did but the Market DOSENT WAIT!!!(this is just one of the problems they have) The current COO and some Business Unit managers are very far behind how to help traders to win and support during trading. All they do now is making trading Difficult and for sure NOT EASY!!! Moreover, they have closed many office worldwide and lost some of the licenses such as: NFA, FSA, and have some major court cases in Tel-Aviv for accepting cash from traders and promising a lot but were not able to deliver, so EASY-FOREX might be for SALE… They should change the name from Easy-Forex to Hard Forex…if u smart DO NOT trade with them!!!
i am intresting in forex market.Plese help me?
Nice article, it’s not so easy to find a good broker with low spreads and good uptime times..
Great write-up, A lot of the points you brought up are very true and very informative. That is why I am liking all of these websites going to the model of “Social comments” with Facebook or a yahoo account. Its much harder to create a fake Identity using these accounts. The problem is this is kind of new so a lot of broker reviews are still in general comment forums etc…
Personally a lot of good information can be found just joining communities on facebook and talking with actual people..
Thanks
Matt Miller
Thanks for your comment Matt. Indeed, the forums are full with fake users…
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