Now, it should be noted, that while retail brokers aren’t out to get you, it doesn’t mean that there aren’t certain entities out there that do not exactly have your interests in mind. There are certainly greedy and shady individuals that could care less about you, your money, or your well-being, and want nothing more than to gain your trust, only to take money from you, and then move on to the next victim that they can trick. Yes, it’s sad and terrible, but it does exist, and it’s important to recognize. These are often called forex “bucket shops”.
Essentially, these places take orders from clients but either don’t actually execute them, or simply lie to clients about when they were executed. It is dishonest and illegal, and obviously, with the added regulation of organizations and agencies – it is a dwindling practice, but it exists nonetheless.
They might offer all sorts of “features” and lower cost, but the truth is that they are offering this to scam you. You know the e-mails where you have to put in all your information to get “free money”? It’s easy to stop and think logically and understand that it doesn’t exactly make sense, and that if it’s too good to be true, it might be. That certainly is the case with bucket shops, who are simply greedy people who want to cut corners rather than actually study the market and attempt to beat it. Beware of them, and be careful to avoid them at all costs!
Ensuring Against Scams by bucket shop brokers
There are certain other steps that you can take to make sure that you get sucked in. It is true that the internet and all sorts of organizations can help with this, but of course, you want to take every step that you can to make sure that you aren’t giving money to the wrong people.
You always want to have price feeds in front of you. This way, you aren’t someone blind, feeling around and trusting your broker no matter what. This way, you cannot be lied to about current prices. Your broker cannot make outrageous claims, because you yourself are looking at the correct and relevant information. People can only scam those who are looking at the wrong thing, or do not have the right knowledge. The idea here is to use price feeds to NOT be that person. It sounds simple, but it’s essential.
Furthermore, with new technology, screenshot your trades! This could end up being invaluable and protecting you from dishonest people of any kind who try to misrepresent your trades in any way. It also might even be worth it to keep a journal where you write your trades in, to accompany the screenshots.
This could truly come in handy if there are honest, or dishonest mistakes, when it comes to your trades. It certainly cannot hurt to keep records like this, and smart traders always do.
Of course, one way to protect yourself is also to be a good trader! Of course, this comes with discipline and practice, but the bottom line is that you will only have to be infuriated with your broker if you keep losing money, and you won’t do that if you are learning every day how to become a better trader. The truth is that sometimes people want to blame their brokers for their OWN losses and misgivings. Don’t be that trader! Focus on being better, protecting your capital, and growing your account.
Of course, as a last resort, when all else fails, and you know that you are 100% being taken advantage of – it’s time to take legal action. Ultimately, the justice system can perhaps succeed in returning your money, when the phone calls and questions can’t. There are organizations such as the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association) that have reparations programs that can get your problems and issues handled for you.