How to Avoid Fraud in the Trading World

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The world of trading is an environment full of opportunities, but there are also many potential pitfalls lurking out there. Beginners as well as experienced traders are at risk for being a victim of scam brokers. Beginners must navigate their way into the practices, tools and trends of trading, while also watching out for hazards and scams. Unfortunately, today anyone can create a website and claim to be a broker or offer investment opportunities, and every year, there is an increase in the magnitude of fraud, involving billions of dollars worldwide.

Fraud is generally associated with people who encourage traders to invest in channels that are non-existent or highly risky, ranging from unregistered securities to Pyramid or Ponzi schemes.

Most new traders usually start off registering with a large CFD broker, and believe they are secure, but this is not always the case. Big does not always mean secure, and beginners in the trading world can often be taken advantage of for this reason.

What You Need to Check

As a trader, you need to act cautiously and calculate your moves wisely. To make sure you are not being ripped off by your broker, here are a few things to watch out for:

First, there’s the broker’s reputation. You can research the reputation of the broker by checking out the broker’s website and reviews. Check if the broker’s clients complain about difficulty in withdrawing funds or scams. Reputable brokers will list awards and recognitions they received on their website, and you can check when the awards were issued and by whom.

Ensure the broker you choose is registered with a legitimate international financial regulator. An honest broker will disclose the agencies that regulate it. As a regulated company, your broker must comply with the directives of regulation, and so all trading accounts will have to complete the verification process before their full activation.

Also, make sure your broker keeps client funds held in a reputable bank

What You Need to Watch Out For

-Too-good-to-be-true promises and bonuses.

-Unnecessary Fees

-No commissions, only on spreads

– Complicated, unclear procedures for trading and withdrawal

Some More Considerations

-Account features – Leverage and margin, commissions and spreads

-Currency and investment channels that suit your goals and interests

– Ongoing Customer Service

-Top trading platforms like MT4 and social trading

– Transparent withdrawal process

CM Trading, an award-winning international broker, is available to answer all your questions on regulated trading accounts. Click here to learn more.

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