Contributor, Benzinga
July 18, 2023
verified by Jay and Julie Hawk

The foreign exchange or forex market is an entirely legitimate decentralized marketplace where national currencies are swapped for one another at a market-determined exchange rate. Trading forex involves speculating on exchange rate movements. Online brokers make trading in the forex market easier and safer than ever, although some scams exist. Read on to get information about the scam warning signs that aspiring forex traders should watch out for.

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Forex: Is It a Scam?

Forex trading is not a scam, and you can trade currencies legitimately via reputable and well-regulated online brokers like via its forex trading platforms. Currencies trade in pairs in the forex market, so each forex transaction involves buying one currency and selling another simultaneously.

Not only is forex trading definitely not a scam, but the foreign exchange market has the largest average daily turnover of any financial market at $6.6 trillion per day. While retail forex trading represents only a small portion of that volume, it can present some fraud risks for the unaware.

Previously Identified Forex Scams

Dishonorable online brokers exist that deliberately aim to mislead you to cheat you out of your margin deposit or the profits you earn trading forex. A rundown of common forex scams you should avoid appears below.

Forex Broker Scam

It’s normal for forex traders to want to select the best brokers to operate through since they want to maximize their trading returns. But those shopping for a new broker should beware of disreputable forex brokers that could take you for a ride.

Be sure to perform your due diligence by researching a new broker and reviewing their reputations with clients and within the industry. A good place to start is by reading the footer of the broker’s website. If it has no information about the broker being overseen by one or more major regulatory bodies or disclaimers about the risk of loss that decent regulators require, it would be prudent to avoid that broker.

For example, an online forex broker overseen by U.S. regulators like would mention its oversight by the Commodities Futures Trading Commission (CFTC) and the National Futures Association (NFA) on its website. The broker should also operate under a valid license number issued by those organizations, as well as fully conforming to their regulations to remain in good standing.

You can also do a quick check on websites like and for forex brokers with a history of negligence and fraud. In general, your chosen forex broker should be well-regulated and have a reputation for treating clients fairly.

Signal Provider Scams

Rather than performing their own technical analysis, some forex traders prefer to rely on trading signals they pay for to help them predict exchange rate movements. This information can be purchased from firms commonly known as signal providers.

You can typically subscribe to signal providers for a weekly or monthly fee. Before subscribing to one of these services, it makes sense to ask for a historical performance chart of their signals to assess the authenticity of their claims.

Most signal providers have a mixed record consisting of some good and some bad tips. This means you can use their performance information to select among them and avoid the more obvious signal forex scammers.

Spread Widening and Off-Market Quotations

The forex market is largely unregulated, so dealing desks have been making money on the margin by widening the dealing spread or showing off market quotations (in their favor) to their clients for decades.

Since there is no centralized exchange where currency pairs trade to provide official market exchange rates or fixed dealing spreads, this industry practice continues unabated. The forex market is becoming increasingly transparent as a result of online trading platforms and client awareness of this common practice, so the profit margins dealing desks can derive from such questionable behavior are narrowing.

Comparing spreads and quotes from different forex dealing desks and also checking them with a reputable online forex broker’s trading platform will help you get the best possible exchange rates and avoid possible losses due to spread widening and off-market quotes.

Forex Robot Scams

A hot trend among forex traders and fraudsters involves using automated trading algorithms or expert advisers (EAs). These forex trading robots scan exchange rate data for one or more currency pairs to identify trading opportunities and then execute entry and exit trades for you.

From slick, high-pressure websites to fake testimonials, trading robot vendors attempt to sell the often unrealistic idea of making great returns trading on autopilot without significant human intervention.

These vendors seek to attract naive forex beginners and retail traders who eventually realize that the robot they bought has traded their account into a loss. While these get-rich-quick robots typically disappoint, this does not mean that you cannot successfully automate your own tried and tested strategy using a suitable online trading platform like MetaTrader 4 or 5.

Best Forex Brokers with a Solid Reputation

Forex trading takes place around the clock from Sunday at 5 p.m. ET until Friday at 5 p.m. ET. You also have a limited number of currency pairs to trade, which makes forex trading somewhat simpler than stock trading. Since there isn’t a centralized marketplace for forex trading like there is for stocks, forex traders can do well using an online trading platform that most brokers offer access to free of charge.

Signing up with an online forex broker can also provide access to helpful market research, tools and relevant news that can assist you when trading. Out of the hundreds of online forex brokers currently available, Benzinga has hand-picked the best to get you started.

1. Best for Forex Trading:

    Best For:
    Fast Execution and High-Volume Traders in the U.S
    securely through's website

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% to 77.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

    The products and services available to you at will depend on your location and on which of its regulated entities holds your account

Established in 1999, has been a front-running U.S.-based online forex broker for over two decades. You can open an account with a minimum deposit of 100 units of your base currency.’s advanced trading interface offers fast and accurate trade execution via desktop, web or mobile device. Based on your trading style, you can customize the platform to your liking.

This broker is authorized and regulated by the U.S. CFTC and is a member of the NFA under license number 0339826. You’ll find plenty of favorable online reviews that praise the broker for its robust trading platform and research tools, which include:

  • Market insights: The global research team at constantly provides actionable ideas during the New York, London and Asian trading sessions.
  • Fundamental analysis: Current economic events are used to predict exchange rate movements in the forex market.
  • Technical analysis: Analyzes historical exchange rate movements of currency pairs to identify chart patterns and make forecasts.
  • Live trading sessions: You can participate in live trading sessions and webinars for real-time insights into the forex market.


  • Long-standing reputation since 1999
  • Customizable, advanced trading interface
  • Comprehensive market research and analysis tools


  • Requires a minimum deposit of 100 units of base currency
  • Not all features may be user-friendly for beginners
  • May lack some niche currency pairs

2. Best for Forex Execution: IG Markets

  • IG Markets
    Best For:
    Fast Execution for U.S. Traders
    securely through IG Markets's website

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Having been involved in the foreign exchange market for over 40 years, IG is a trusted online broker for forex trading. Its expertise is complemented by an easy-to-use trading platform that allows you to make transactions in up to 93 currency pairs.

You can open an account at IG with a $0 minimum deposit, and its dealing spreads are among the lowest in the industry. IG won the FX Weeks e-FX 2019 Award for Best Retail FX Platform of the Year.

IG is regulated by the CFTC and is a member of the NFA. You can read more about this top broker in Benzinga’s IG review.


  • Expertise in forex market for over 40 years
  • Allows transactions in up to 93 currency pairs
  • No minimum deposit required


  • Platform may be overwhelming for beginners
  • Limited educational resources
  • May charge higher fees for small trades

3. Best for Demo Accounts: eToro

  • eToro Forex
    Best For:
    Copy Trading
    securely through eToro Forex's website

    CFD trading is not available to U.S. users. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

eToro’s online trading platform offers many of the world’s most popular currency pairs, and its copy trading service is among the best in the business. You’ll also enjoy additional benefits, such as real-time execution of market orders and unlimited daily withdrawals.

View real-time data, gain access to in-depth analysis tools and be the first to catch the trends wherever you are. You can also get customized notifications on your watchlist, and try out eToro’s many innovative features completely risk-free with a free demo account funded with $100,000 of virtual money.


  • Offers copy trading service
  • Real-time execution of market orders
  • Allows unlimited daily withdrawals


  • Trading platform might be complex for new traders
  • Not all currency pairs may be available
  • Charges withdrawal fees

Take the World in Your Hands

Forex is a transparent and open trading market built for dedicated investors. As an active forex trader, you have a front-row seat to events that shape global economies.

Be wise with your investments, and you can harness the value of international currencies from the palm of your hand. Avoid scams and get started in forex with Benzinga’s recommended online brokers.

Frequently Asked Questions


How can you protect yourself against forex scams?


You must do your homework on the forex brokers and the most common types of scams.


What are the best ways to check on a forex broker?


Check to confirm it is regulated by the CFTC and a member of the NFA


What to do if you get scammed?


If you are scammed, gather evidence and report it to the authorities and your bank. Inform friends and family to prevent further victims and educate yourself to avoid future scams.

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