How to Deal with Forex Brokers
Forex brokers contact selected clients in order to discuss investment options based on the foreign exchange market. The most effective brokers know how to get their ideas across in such a way that you not only want to invest but you want to invest now, in substantial amounts, thinking that your broker is doing you a favor. With that said, investing in the foreign exchange market and/or with a broker is a viable investment option. But only if it is done with due diligence on your part, full disclosure on the part of the broker, and provided you test your broker with a finger or two before handing him/her an arm and a leg.
Initial Contact
Forex brokers have varying methods of initial contact. In some cases, it is the client who contacts a reputable investment house or broker to invest. But in some cases, brokers call out of the blue or request a meeting. Of course, if you are the one who contacted the broker, make sure you have contacted the right one after a thorough research and/or a trusted referral. If it is the broker who contacted you then allow the same to introduce himself/herself and request for the appropriate credentials (firm, identification card, brokers license, education, training, experience, etc.). Remember, it does not hurt to listen.
Set the Parameters
Forex brokers like to set the mood and the pace of the conversation. Do not allow this to go undisturbed. Before the broker launches into a well rehearsed speech, interrupt the same and point out what you can afford, what you expect and some other parameters you think is necessary. A reputable broker will listen to you.
Now Listen
If you have played your cards right, you have made the broker listen to you. Now, it is time for you to listen. Note down areas you do not understand and request the same to be repeated to you. Forex brokers have a lot to say but the best brokers know how to make it understandable to anyone they talk to. Remember, a broker who refuses to discuss the basic procedure with you is a cause for alarm, but a broker who refuses to discuss internal and confidential matters can be excused.
Due Diligence
Forex brokers use pressure tactics in varying degrees. After listening to the broker, take the time to digest the information. A good rule of thumb is to sleep on the proposal and request another meeting or a call back after at least 24 hours. Get the contact information of the broker and ask if you can contact the same for questions. At this point, you need to research the investment house, broker, and proposal. Remember, you need to verify credentials, licenses as well as the soundness of the procedure. Nowadays, this is easy. Use the internet and research using the appropriate government agency as well as nonprofit organization.
Invest or Not
Whether you are investing or not, it is always good to politely call back your broker to inform the same of your decision. This is especially true if you appreciate the competence of the broker, but do not think the particular investment or portfolio is for you. Remember, be polite and never burn bridges because you may need to deal with the same broker or investment house again.
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