Every day, trillions of dollars are traded on the forex markets. Traders worldwide are searching for the right broker to trade forex, CFDs, binary options, bonds, cryptocurrencies, and other financial instruments. With new forex brokers appearing regularly, deciding a broker’s authenticity can be difficult. A customer needs to conduct thorough research on a firm before depositing funds to buy or sell. Daniel Hyman, a broker at The Investment Center, is here to assist as much as possible to make sure that you can pick apart scam brokers from honest brokers.
To stop a forex trading fraud, ask such questions.
- Is there a benefit or incentive for opening an account with the broker?
Scam brokers make promises like “make $50 a day on a $250 deposit,” “make 80% returns on benefit signals,” and “96% success rate.” Regardless of whether the claims are made for forex, CFDs, or binary options, they are false. Forex brokers do not make any promises on returns, no matter how small or big they are. Simply put, it is an intent to fraud if a broker promises to make you money. Advertisements of new vehicles being given away to fortunate buyers are another popular scam technique.
Binary options are often traded on a controlled market, although they are often fake, traded over the Internet, and vulnerable to theft.
Conclusion: If a binary option or forex broker offers you high returns on your investment, you’re dealing with a scam. You won’t win a $40,000 car by depositing $2,000; you won’t make $100,000 on a mega-trade; you won’t make a 96 percent profit in 30 seconds. Therefore, it is better to stay away from such brokers, which won’t only save you money but also your precious time and efforts.
- Is the broker providing profit-guaranteed automated trades or signals?
Many scam brokers advertise automatic trading through a robot or algorithm that promises to make you money. These brokers say that their robots use signals to make money for you. These brokers also concentrate on cryptocurrencies or binary options.
Conclusion: No company has discovered a way to produce significant profits from automatic or signal trading reliably, and if they had, they would never make it available for free to the general public. Use common sense: if anything seems too good to be accurate, it probably isn’t.
- Is there any reliable information about the business on its websites, such as its records, financials, headquarters address, or other relevant information?
It’s more obviously a scam if there are no specifics about its management staff, where it’s based, or what kind of customer service it has. When scam brokers get into trouble, they don’t want their names, addresses, or phone numbers attached.
If you can’t find any good background of the broker you’re considering, don’t open an account with them. Further, companies that most years have any reports are probably fake and shall be avoided.
Finally, read as many reviews as possible. Then, go to any search engine and search for that broker’s analysis to see what comes up. Sites like Forex Peace Army, in addition to ForexBrokers.com, are notorious for exposing scam brokers that are young and don’t have a lot of details accessible.
Conclusion: Stay away from a platform if you can’t find truthful facts and feedback about its management staff, market locations, corporate background, or financial details.
- Can I check the validity of any awards mentioned?
Many fraudsters appear to have won prestigious awards. In most cases, the award would claim “Best broker 2015,” and the news source will either be unavailable or untrustworthy. Scam brokers would purposefully publish bogus awards from the past because they are more difficult to validate than awards from a recent year.
Sometimes, the scam dealer will have awards from reputable media sources, but the awards will be fraudulent, such as the best signal provider awards by The New York Times, which does not exist in reality.
Conclusion: Confirm the validity of any alleged awards by double-checking them.
However, financial markets can be difficult to handle by being proactive, precautious, thorough, and aware of the market; one may stay safe of any such frauds and scams.