Beware Of Forex Bucket Shops

Forex bucket shops are brokerage firms that have “questionable” trading practices. Unusual regular price misquotes or re-quotes, slippage only satisfactory to the broker.

If you have seen Boiler Room, you might have heard Ben Affleck’s fabulous speech about money!

 “They say money can’t buy happiness? Look at the smile on my face. Ear to ear, baby!”

And its exactly this greedy philosophy that drives the people working bucket shops. The term comes from brokers who used to put their clients’ phone-in orders on slips  and then dropped the slips, in a small bucket instead of actually executing them.

Without placing the orders out into the free market, the client is in fact making a bet against the forex bucket shop operators who are also branded as bucketeers.

These old school bucketeers do not typically reveal the real worth of the asset that their client is trading, that  means they could tell the client that the price moved or didn’t move, whatever was in favor of them and of the broker.

And thanks to the modern technology and the invention of the internet. Regulations are improving and enforcement. The newbies do not have to worry much these days. Although, bucket shops are still around and just have to be careful!

Another good thing is that there are websites that are still willing to help, to avoid being scammed and avoid falling into the traps of the bucketeers. You need to separate the good brokers from the bad ones. There are forums that you can go to, where other brokers shares their experiences,  feedback and learn more about different types of brokers.

On that note, before you deposit your hard earned money, make sure that you have enough or more knowledge about the broker, this will help you avoid fraudulent brokers.

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