Protect yourself from bucket shops!
People enter Forex market with lot of dreams and aspirations which they can fulfil with the help of a forex brokers. But there are many fraud forex brokers who may make people lose both their cash and aspirations with their unethical activities. Such brokerage houses are called as bucket shops. They earn their name as bucket shops since they do not accept orders digitally but write them on a slip of paper and throw that slip in the nearby bucket instead of executing the order. In this article we have come up with few points to observe in a broker in order to identify whether the brokerage house is genuine or a bucket shop.
- If your broker is not executing your order immediately: One of the best ways to identify the bucket shop is that the broker is taking his own time to execute the order placed by you. They do this mainly because they want to wait till the substantial market position is reached. This position is advantageous to the broker rather than the client. After this point is achieved they execute the client’s order and keep the difference with them as their profit.
- Transactions shown in the past are suspicious: another way of recognising a bucket shop is that they will have a series of transactions to show to the client as their past transactions. On verification these transactions will not match to the transactions of other investors in the market. Actually bucket shops alter the transactions to make them lucrative and attract the clients. In reality an investor using bucket shop for investment does nothing but lose money.
- They use remote quotes for the clients: Another way of recognising a bucket shop is that they use remote quotes. If you compare the quotes offered by the bucket shop with the quotes of other brokerage houses or investors there will be no conformity in it. They will neither coincide with them not with the market trends and situation. Their quotes are misleading making the investor lose their money.
- They will fantasize forex trading: One very common characteristic observed in all the bucket shops is that they use various ways to seduce the client for attracting him or her towards forex trading. Cheesy tag lines such as “easy money by Forex” or “earn a fortune from home” are usually the advertising gimmicks os such bucket shops. They make huge claims and false promises to attract the clients. A genuine broker will never try to entice you from trading on the contrary he will try to put forward facts and figures for overall understanding of forex trading.
- Bucket shops have negative trade expectancies: Another common trait of bucket shops is that they have negative trade expectancies. They trade against the losing crowd and make huge fortune in return. If a particular broker is trading against all his clients then it’s time to be vigilant and make sure that the broker is not a fraud broker.