I see lots of newcomers on this site discussing different brokers. Occasionally, I will see someone saying "so and so ripped me off". And too often, the brokers mentioned are really questionable.
I don't want to get off on a rant here but if you're going to entrust money to a broker, know who you're dealing with. My methods for that are not foolproof but most of the time, they will help you separate scam artists or potential scam artists from the legit brokers.
-How did you hear about them?
Did somebody come here, posted 5 times and 3 out of 5 posts where about how great his broker was before he got banned? It's rarely an overenthusiastic newcomer and often someone paid by the broker to post drivel in the hope of drumming up business.
forexhappy.com? ifxorgasm.com? forexsuperduperprofessional.com? weguaranteeyouwontlosemoneyinforex.com? All of those are outrageously cheezy domain names which I have made up. The picture I'm trying to paint is that if the name sounds cheezy, I would even say "scammy", I would question it. I would even question it if it was a SERIOUS sounding name like "wedontfuckaroundFX.com". But whether it sounds cheezy or not. Take the domain name and move on to the next step.
I can't stress that enough. Check the WHOIS records. It's free, quick, simple and can save you from getting scammed.
My favorite spot to check whois records is Name Intelligence's Whois Source. Take the domain name and put it at the end of http://whois.sc/. So for instance, if I would want to look up Oanda.com, I would type http://whois.sc/oanda.com.
You'll see information such as the website title, the META description, etc. That's not what we're after. Scroll down the page a bit and you'll see something that begins with Whois Record. You will see the Registrant's address and much much more. But we'll get back to that in a minute.
New York, NY 10005
Check out the actual site you're investigating. Is the address matching? If they claim to be on Wall Street, why is the Whois record showing a registrant's address in Lagos? Would be suspicious if it happened right?
Domain Name: OANDA.COM
Florian, Chris http://source.domaintools.com/email....5D=transparent
30 St. Patrick Street Suite 300
Toronto On M5T 3A3
416 586 0328 fax: 416 593 0185
Administrative contact. Does the person on the administrative contact have anything on the web? Google the contact name but do it using quotes. Maybe you'll see things such as negative threads about that person/broker on different forums and maybe they are not Forex related. Maybe a BBB report will come up as a search result. There could be a billion things that comes up that would make you say "this isn't right". You can also use variations in the Google search such as "Joe Blow" + "Forex", "Joe Blow" +"City name". Maybe something nasty will come up, maybe you'll find out that he's a member of the Chamber of Commerce's baseball team, that he's a Saggitarius and likes to play Chess. The more you find out, the better. Remember, know who you're dealing with. You may have to call and yell at him over your account someday
Run a Google search on the phone number. Are the results coming up looking good? For legit brokers, I'll normally see the broker's site as the first result. If it's bad, I see a home phone listing. I once saw a phone number linked with a garage's listing. The guy running the site was a mechanic and the phone number was his parent's. What gave that guy the impression he could be a Forex broker is beyong me but that's why you have to cover yourself. I wish I was joking about that mechanic story by the way.
Google the email address too. It's interesting what comes up sometimes.
Same as the Admin contact. Sometimes the name is the same, sometimes it's not. Just google it if it's different.
Record expires on 03-Aug-2011.
Record created on 04-Aug-1996.
Database last updated on 25-Feb-2009 04:39:03 EST.
Using this example, it shows that the record was created in 1996. This to me is an indicator that they have been around for long enough that they are stable. In fact, that's the first thing I look at before looking at something else.
Post here if you have questions on my methodology and I will answer them to the best of my abilities. I won't do the research for you but will be glad to tell you what I know so you can do it yourself.