1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Why use an unregulated broker?

Discussion in 'General Forex Talk' started by RP1, Apr 16, 2012.

  1. RP1

    RP1 Corporal

    Joined:
    Feb 12, 2010
    Messages:
    101
    Likes Received:
    0
    Hi
    After another round of reading and voting on scams posted here . I have to ask
    why do people use unregulated brokers ?

    All of the brokers I use are regulated by the FSA and I never get any problems withdrawing and also getting top notch customer support .

    So why traders do you do it ? Why do you support these scum buckets?

    (sorry to mods if this has been posted/asked before)
     
  2. Pharaoh

    Pharaoh Colonel

    Joined:
    Oct 3, 2007
    Messages:
    19,658
    Likes Received:
    2,205
    Many traders, especially new ones, don't understand how forex regulation works.

    Many brokers are very deceptive. Some brag about being "registered in the UK", but this is only a company registration, not a registration with the FSA. Many show off other corporate credentials that mean absolutely nothing in terms of regulation.

    Some traders are driven to use the least regulated brokers by their own government's regulations. The US has all sorts of crazy restrictions on trading. Most regulated offshore brokers won't accept a US account. Some of the smaller unregulated ones will.

    For risking a few hundred dollars, it's not a big deal. I'm always amazed when I read about someone who has placed tens of thousands with some bucketshop that already has a long string of bad reviews. It would take 5 minutes with google to find out that some of these companies are very unsafe.
     
  3. Romeo

    Romeo Sergeant

    Joined:
    May 1, 2011
    Messages:
    239
    Likes Received:
    4
    Unfortunately as Pharaoh mentioned, many new traders do not understand how necessary it is to have a safe broker. A few years back, when a friend talked to me about Forex and I started studying the Forex world, I was very concentrated to learn how to trade to make money and I did not pay much attention to which broker is safe. I cared more about which broker will have tight spreads, give me a good bonus etc.

    Take a look in the scam alert folder and you will realize that most of the cases are coming from members that registered at FPA AFTER they have been scammed. That means that after they lost their money, they start to investigate what kind of broker they messed with.
     
  4. RP1

    RP1 Corporal

    Joined:
    Feb 12, 2010
    Messages:
    101
    Likes Received:
    0
    Its amazing isnt and thanks guys for the answers so far, Buyer Beware comes to mind here .
    So traders , or future traders please DO YOUR RESEARCH before signing up with a broker.
    Beware of brokers in out of the way places with no regulation. If they say they are regulated then please check this as well.
    If they say they are FSA regulated for example they should quote an ID number on their website. Check this number on the FSA website, do a bit of digging , and of course you can always ask here for opinions too.
     
  5. Floriano

    Floriano Recruit

    Joined:
    Aug 16, 2013
    Messages:
    70
    Likes Received:
    11
    I think we should do trading with a regulated and honest broker. If we choose a unregulated Forex broker then we may be scammed.
     
  6. jlangeles

    jlangeles Recruit

    Joined:
    Sep 22, 2013
    Messages:
    4
    Likes Received:
    0
    And why not? seriously, regulation does not mean they are 100% safe. I'm not saying go with any broker, but check in this site itself, FXsystems and its branches are quite reliable Forex Reviews | Forexpeacearmy, still they are not regulated http://www.100forexbrokers.com/fx/broker_search.php; now FXCM and Forex.com, are regulated and they do not have the best reputation. Said this I think it's better to see who they really are with real clients reviews instead of just checking if they are regulated or not.
     

Share This Page