So, you registered with a new broker, and begin to wonder whether the pieces of the puzzle fit. The rule of thumb is: once you smell something fishy, you are most probably right. Here are a few points we suggest you look out for in determining scam.
- Questionable Marketing Practices
A broker promising you exceedingly high returns. “Invest $100 and become a millionaire in two days” sound familiar? Scam intermediaries try to capitalize on our basic desire: to attain as much money as possible with as little effort as possible. These brokers will promote how easy trading is, and how quickly you will get rich with them. Our advice when seeing this would be to walk away. Remember, if it sounds too good to be true – it most likely is.
- “You are not risking anything”
A phrase like this is a classic, and is attributable to fraudulent behaviour. Trading is always a risk, and no trading choice is 100% safe. If your broker promises you will never lose money with them, it may be that they don’t have your best interests at heart.
3.Over-Reliance on Expert Advisors
Trading while you sleep may be tempting, and robots can serve a good purpose or two. Nevertheless, if a broker pushes robot software as a top trading solution, it may be advisable to take a closer look at things. Expert advisors do not perform well in every single market, and it takes a certain share of trading experience to be able to work them properly.
- Withdrawal Issues
If you abide by your broker’s withdrawal terms and conditions, and yet have trouble withdrawing money, again and again, this may be worth looking into. Too long of a wait, problems with the withdrawal platform, managers ignoring your requests… In situations like these, it may be best to opt out to avoid the risk of things taking an unpleasant turn.
When working with trusted brokers, traders are often willing to go online and take a minute to share their positive experience. If you can’t find a single positive (independent) review about yours, while scam comments completely take over – this is hardly a good sign.
Of course, not all of these necessarily mean fraudulent behaviour
Nevertheless, we tend to advise traders to opt for a licensed and regulated broker, versus going along with unregulated intermediaries and stressing out as to the safety of your funds.
License and regulation mean that a higher authoritative body is there to protect you from being cheated at all times.
*Risk Warning: CFDs are complex instruments that come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts, lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.