Even though Forex broker scams are less common nowadays, they still exist. So, as always, it is better to be safe than sorry.
Before you actually choose a Forex broker, you need to take some steps that will ensure you that you are making business with a reputable company.
#1: Since you probably already have a list of the best Forex brokers (according to your search), the first thing you need to do is to find online reviews about them. However, not all reviews are the same. You will find reviews where the website owner is trying to get his affiliate commission when you open an account with that specific broker, there are others from people who made bad trading decisions and are now blaming the broker, and there are even reviews from brokers that appear under individual names.
#2: Your list is probably decreasing in size which is a good thing. So, now, you need to find out if any of the Forex brokers that are still on your list have any outstanding legal actions against them.
#3: Within your search, you will probably find many people complaining about numerous things. One of the red flags that you really need to spot is if any of these things include difficulty in withdrawing funds. If you find someone complaining about it, try to reach out the user and ask him about the entire situation.
#4: When it is time to finally open your account, make sure that you print all the contracts that you need to sign and read them carefully. Some of the things that you need to be particularly careful about is about bonuses for opening an account as well as withdraws. In case you take a monetary bonus that is added to your trading account when you open your account with the broker, make sure to know what happens if you lose part of that money and want to withdraw all your money from the account. Some companies will discount the bonus they offered in the first place and will only allow you to withdraw the one that was actually yours (minus the loss you had).
#5: If you finally found a forex broker that seems to be a good, you should open a mini account or a very small account with them first. Just trade a bit with it for about a month or so and then try to make a withdrawal. If everything works well, you can then deposit the amount you were first considering. In case they keep delaying the withdrawal, you know you are dealing with a dishonest broker. So, if this happens, just spread the word about them and their service. Tell others about your personal experience.