5 (Five) annoying things Forex Brokers do

5 (five) annoying things forex brokers doForex brokers have become the main pillar when it comes to retail forex trading. Whether we like it or not, forex brokers are the middlemen that connect retail traders to the interbank markets.

While forex brokers were mainly concentrated in the area of market makers, as volumes began to grow, a new breed of forex brokers known as straight through processing (STP) and Electronic Communications Network (ECN) brokers began to appear as well.

Still, no matter what, there are brokers who do some things that can be quite annoying for us traders.

Let's find out the five annoying things that forex brokers do.

1. The Sales Pitch and the Sales Spam

Let's face it. The moment you create a trading account (even a demo trading account) and you drop in your phone number and email we are flooded with sales newsletters.

Typically, at most forex brokerages the sales team is tasked with making the initial contact with the trader. If you do make the mistake of answering the call, chances are that you will be spammed with phone calls until you convert to a live account or make your first deposit.

For most beginners in trading this can mean that depending on the persuasion skills of the sales guy on the other end of the phone, you could actually end up making a deposit and start trading.

If you were smart enough not to drop your phone number then be prepared to be flooded with email messages. From the initial email asking that the sales person was unable to reach you over the phone to promotions that are being sent to you it becomes an endless loop.

2. Promotions and news events

While most regulated forex brokers now have to follow strict requirements about the type of bonuses they can offer and the terms and conditions that follow, for the most part, there are still quite a few forex brokers who continue to ignore the rules.

With such brokers you can expect to get both promotional calls and emails. The truth of the matter is that forex brokers tend to hype up the event and eventually convert it into an opportunity to lure you into making a deposit.

So whether it is a nonfarm payrolls data or a central bank decision, chances are that forex brokers will send you an email, alerting you to the event but primarily in hopes that you will make another deposit.

3. Explaining the terms and conditions when money is deducted from your account

Head out to any major forex forum and chances are that you will find at least a few forex brokers who will complain about this issue. Ideally you find that the trader was either trading ahead or during a news release and made a profit, which is then deducted by the forex broker.

Question the broker and you will be shown the terms and conditions. What seems like legal jargon back then suddenly makes a lot more sense.

One of the biggest reasons many forex brokers are often dissatisfied with their brokers is because they do not read and understand the terms and conditions properly. Most of the misunderstandings can be easily avoided had traders taken the time to read and ask questions regarding the terms and conditions.

At the end of the day, given that you automatically accept the terms, there is nothing much you can do expect to complain at a forum to vent your frustration.

4. Fiddling with the spreads

Although this is uncommon with most regulated brokers, unregulated brokers and market makers can often mess around with the spreads. This is not just limited to the exotics or minor currencies but also includes major currencies like the EURUSD and so on.

Forex brokers can often use a number of reasons for messing with the spreads. It can range from blaming it on the liquidity provider to widening spreads around a news release.

Wider spreads are also one of the most common form of complaints among traders about their forex brokers. This can typically be avoided by trading with a high-end forex broker and one that is reputable and has been in business for a while.

5. Delayed processing of withdrawals

We have all been there and we also know how most (but not all) forex brokers get all jittery when you want to withdraw your winnings or profits. Although this is quite subjective, there are a number of reasons behind delayed processing of withdrawals.

It could be something as simple as your account not being verified fully, or it could be the fact that your forex broker simply does not want to part with the profits that you made. There have been instances when the sales team from the forex broker call their customers and convince them to keep the profits and lure them into trading more.

On the forex forums, this is one of the common areas of complaints among traders.

The bottom line is the fact that forex brokers need to be thoroughly vetted before you have any intention of opening a trading account with them. Having a good and reputable broker on your side can help you grow as a trader.

Therefore it goes without saying that researching on a well regulated, established forex broker is of utmost importance.

Read 1014 times Last modified on Sunday, 27 January 2019 16:29






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