How to minimize the risks in Forex trading to avoid scam
When Forex trading, you’ll have winning trades and losing trades. The best thing you can do is to never lose your track. With this, I mean that you should always keep focused. Losing money in Forex can be devastating. The first thing you should do is stop trading at once and use your trading diary to see what you’re doing wrong. If you look at the Free Forex Ebook that I gave you, a chapter there talks about this diary.
But how should you minimize your risks in Forex? Here are 4 tips:
1 – Always use a stop loss when you’re trading. Just consider the stop loss as an insurance. Even if you picked the wrong trade or even if the market just didn’t go the way you thought it would, your loss is limited. This way, you prevent losing your entire trading account in just a couple of trades.
2 – You shouldn’t trade during high volatility news like the Non-Farm Payrolls or the FED rates announcement. Usually, they bring extreme volatility to the market and this means you’re taking higher risks.
3 – Be careful with the leverage you’re using. Don’t see the leverage just like an advantage; it can also be very risky if you don’t use it properly.
4 – Before trading in a real account, test a demo account. Place orders, modify them, cancel them. Take the time to test your strategy. Take all the time you need because when trading in a real account, you’ll be risking your money.
As you probably know, there are a lot of scams involving Forex brokers. These include problems withdrawing money, brokers trading against you, and even price manipulations and platforms freezing… As you can see, it really pays to make a complete research about Forex brokers before you open a real account with them.
Here are 5 tips to avoid Forex broker scam:
1 – The broker must be regulated. Imagine a country with no laws. This is an unregulated broker. They do whatever they want with your hard-earned money and you can’t do anything about that. Please just open an account with a regulated broker.
2 – Check out where the broker you choose is based. If they’re based in 3rd World Countries, they’re probably unregulated and these countries don’t have the means to bring them to justice.
3 – Read their website and see if they tell you their contact information. A truthful broker should have, at least, a support email, a phone number and an online chat. You might ask yourself why they need an online chat but the truth is that the Forex market is open 24 hours a day. So, if you have any problems, you can contact them in that same instant and don’t have to wait for an email.
4 – Read reviews about their customers. You can see testimonials in their websites but just do a Google search for the broker name plus review or reviews. See different websites and check the dates.
Choosing the right Forex broker for you is a very important step. Every effort made on this task will really pay-off.
Final tip: when trading forex or commodities or whatever you ike to trade, make sure you choose the right broker for the job. Plus500 is authorised and regulated by the Financial Conduct Authority and listed in the United Kingdom.