When you search through reviews/comments about Forex brokers, you often find traders claiming that the broker is “manipulating the prices”, “causing traders to lose money” and “charging more commissions.
Are they just unhappy traders who just happen to lose their invested funds or are brokers really scamming traders?
Exness does not manipulate trades against its traders
It is a common misconception that many forex brokers are acting against the best interests of their clients.
However, this is not the case with most brokers.
Most forex brokers clearly state how they get paid, usually through the bid-ask spread, which is the difference between the bid and ask prices for a particular currency pair.
Also, reputable forex brokers like Exness are regulated so they cannot scam their clients out of their hard-earned money.
Is Forex market manipulated?
When you trade Forex, there are many options for you and trading through online Forex brokers is the most common way in any country.
Such online Forex brokers make money from commissions generated by traders’ trades, so their main goal is to keep more traders to trade with them for the long term and eventually invest more money.
Some Forex brokers also make money when traders lose their invested funds. This is the case when the broker hedge against its traders’ trades.
It is also true that some brokers do change trading conditions such as the cost and market price to cause losses on traders’ accounts so that they can make profit out of it, even though that is a very rare case.
If you have a doubt about your broker’s activity, there are 3 things you need to be aware of:
1. The rate has jumped dramatically and comes back to the normal price
You sometimes see a price jumps to an extreme point in a chart and comes back to the normal price.
During a volatile market period, it is possible that a price goes up and down drastically, but if the price jumps during a quiet market time, then it could be the broker’s or the Liquidity Provider’s (one from which the broker is receiving the price feed) system error.0
In this case, it is necessary that you contact your broker regarding the matter and investigate further.
2. The level of Slippage is increased
Slippage is a common thing in any market.
When you trade during a news-time, with a large volume, or during a time when the market liquidity is extremely low, it is possible that you will encounter a slippage.
The slippage can affect traders both positively and negatively.
Observing a slippage while you are trading shouldn’t be a problem, and if you’ve been trading with a certain broker for a long-term, you will learn the level of slippage and know what kind of situation can cause slippage to happen.
If will be an issue, when the slippage level rises and you will start losing a great amount of money because of it.
You can’t eliminate the possibility that the broker has changed a certain setting on your account, and you may be experiencing far more often slippages on your trades.
To verify this, you need to compare your account with others.
3. There is no positive slippage but only negative slippage
As already mentioned, the slippage can be both positive and negative for traders.
So if your trades have been experiencing slippages, you should see both positive and negative slippages in the result when you see the history of trades.
In fact, many brokers publish a report of their slippage conditions, and they show both positive and negative slippages.
If you are not seeing positive slippages but only negative slippages, then it is possible that your broker is limiting positive slippages on trades and allowing only negative slippages to happen.
In the past, some brokers have been fined due to this condition, causing its traders a large amount of losses in a long period of time.
5 Dangerous Myths About the Forex Market
There are many common misconceptions about Forex that are sold as fact by people who do not understand the global Forex market, especially to new traders.
Below, we debunk 4 of the most common forex misconceptions or myths so new traders can trade with confidence.
Myth 1: The cost of foreign exchange transactions is high
It is a very common misconception, especially among new forex traders, that you need thousands of dollars to open a forex trading account. This misunderstanding originated before the rise of the internet and online retail forex trading. In the past, the forex market was only available to wealthy traders who could trade large volumes starting from $1 million.
With most brokers, traders can open a live account and start trading for as little as $50.
While at Exness, the minimum deposit is as low as $1, which makes it easier for novice traders to open an account and start trading.
Myth 2: You need complex strategies to make money
Many novice and experienced traders believe that they need complex trading strategies to make money trading the global forex market. However, it is not. Many Forex traders who use complex trading systems make no money at all.
Often the most successful forex trading strategies are simple trend-following systems that are easy to understand and aligned with the prevailing trends in a given market. Most complex trading systems have too many variables that are not easy to monitor and can sometimes lead to losses.
Myth 3: To be a successful Forex trader, you need to make accurate forecasts
Although you can become a successful trader by making accurate predictions about the forex market, this is not the best way to achieve long-term success as a forex trader. Traders who achieve long-term success in the markets do so by performing fundamental and technical analysis of the currency pairs they trade.
Fundamental analysis involves evaluating factors such as economic data, fiscal and monetary policy, and news events that may affect the current and future direction of a currency pair.
Technical analysis primarily focuses on analyzing the price movement of a currency pair in order to predict its future direction. Novice traders can learn effective fundamental and technical analysis skills from a number of online resources, such as Hercules.Finance.
Myth 4: The risk of trading in the foreign exchange market is too high
As an aspiring forex trader, many people will try to tell you that trading the forex market is too risky. Although every forex trade you place as a trader carries risk, you can limit your risk by using minimal leverage and applying stop loss orders.
It is prudent to only risk a small portion of your available deposit on any one trade so that you do not lose your entire capital even if the trade goes against you. Although Exness allows up to 1:Unlimited leverage, you should always use leverage carefully to best protect the funds in your trading account.
Finally, it’s important to note that there are risks in everything we do in life, including eating, driving, and sleeping. However, this does not prevent us from continuing to execute these critical missions, as the rewards will ultimately outweigh the risks.
Here we describe some common misconceptions about the global forex market, but this should only be used as a primer.
Opening a demo account is a great way to test Exness’s services as it gives you the opportunity to test your strategies before opening a live account.