The passion to trade and make money has led many to take the wrong turn because they did not show due diligence. When it comes to choosing an online broker, you have to as skeptical as possible. Make sure you are 100% sure in your heart and mind about the authenticity and legitimacy of the broker before you open a trading account. A little attention to details, some patience, and sufficient knowledge of the prevalent scams should help you identify the black sheep hiding inside the cloak to rob you of your money from XTRgatescam. Here are the seven signs that indicate that you have run into a trading scam.
7 Signs the Broker You Have Chosen Is a Trading Scam
1. No Regulation Just Runaround
As much as the regulation is important for online brokers, there are some that try to trick you into believing that it is not. They have many ways to manipulate your thoughts and make you believe that regulation is not as important as you might consider it to be. The reality is, brokers cannot run their websites anymore if they don’t have proper regulation. In other words, the absence of regulation is the sign of a scam. What tops everything is the attitude of the broker that tries to hide the fact with other distracting details.
The security of your information through encryption or your funds being in segregated accounts does not matter when the broker is not regulated. There is no way for you to your hands on the broker if it disappears some day. On the other hand, a regulated broker cannot do that. It is monitored by a regulating authority and has to operate with transparency at all costs. So, when you think about signing up with an online broker, always verify that it is regulated and registered.
2. Commissions Everywhere
This is yet another sign that many new traders are unable to catch. The problem is, many online scammers or shady brokers hide the information about their commissions from traders. For example, there might be a huge commission on every trade, but they will not talk about it. In addition to that, they will tell you that depositing and withdrawing money from your account is easy but will never open up about the presence of any commissions. If you are new to trading, please know that you can have to pay huge commissions on depositing funds in your account or withdrawing them.
The best brokers usually have a section on their website dedicated to banking. They will tell you each and every method that is available for you to deposit into and withdraw money from your account. They would also tell you the time it would take you to transfer funds into your account using a particular method. In addition to that, the informative table on the website also states any commissions on your deposits and withdrawals. Furthermore, if there are any commissions on trades, they will state them clearly as well.
3. Bad Reviews
There is no doubt that customers can be wrong at times. In many cases, traders are new to trading and they do not understand the intricacies that an online broker has to deal with while offering its service. A delay in withdrawal or a delayed order execution can infuriate traders. These issues can cause many traders to spew hatred against the broker. However, when you see that there is a pattern of bad reviews against a particular online broker, you should pay heed. There is no way that 20 customers are angry for no particular reason with the same broker.
When you see that a broker has been reviewed poorly on the internet and has appalling ratings, you should instantly start looking for a different and better option.
4. The Clear Signs
Sometimes, the sign of a trading forex scam is a set of more signs. Yes, you can see these signs when you navigate the website of the broker thoroughly. It might seem like a time-wasting task but you should spend some time on the website of the broker before you sign up. You will discover a lot in 15 minutes that you can’t in the first 5 minutes. For example, the numbers that appear on the home page of the broker’s website might seem super impressive. Millions of traders, billions in orders, and thousands of assets etc. these things sound great. However, they are not always true.
You have to look at the background of the broker i.e. how long the broker has been in business for. So, if the broker has been around for three years only and claims that it has millions of traders, you can sniff that there is something wrong. For a broker to have millions of traders, it needs several years of great service. In fact, it has to win a few awards to get recognized as a great broker before these many traders sign up with it.
5. The Exaggeration
Exaggeration is when the broker is trying to make little things seem too big. If you browse on a few online broker websites, you will notice a few trends. For example, you will notice that most of them have MetaTrader 4 as the trading platform for their traders. Secondly, they usually offer leverages of up to 1:100. Thirdly, they almost all have a web version of their trading platform, which you can use from anywhere in the world using any device of your choice. Furthermore, $100, $200, or $250 is quite a common initial deposit that most online brokers work with.
If you encounter a broker that makes these things sound too big, you might have landed on the wrong website. You know that almost every other broker is offering these features. There is no reason for the broker to make these things sound big because they are not. Web-based trading platforms are a commonplace thing today. MetaTrader 4 trading platform has been around for a decade now. You have brokers that offer leverages of up to 1:1000, so 1:100 is not the biggest leverage you are getting. A broker that calls it the best leverage is definitely not telling you the truth.
6. The Promises
The one mistake you will never see an online broker make is of promising things. When you sign up with a broker, you get access to a trading platform, which is like a bridge that lets you in many financial markets. Trading is all about you picking assets, taking a particular position based on your analysis, and waiting for the price to move in your desired direction. The broker has no contribution in any of these steps, which means the broker is in no position to make any promises on how much you can or will earn from trading. The job of the broker is only to provide you with a trading platform and sophisticated tools that can “help” you with trading.
However, you will often find online brokers that make claims as though they know how the markets will behave. They will tell you that you can make a lot of money on trading by doing such and such things. That’s not true at all. The broker cannot make any such claims even if it is taking care of your account and trading on your behalf. If markets were 100% predictable, they would not exist in the first place. You have to stay away from any brokers that say that you can make millions from trading. The best online brokers are very reserved with any statements they make on their websites.
They will never promise anything absolute, no matter how much they help you with successful trades. They are responsible in their behavior and in the way they operate their businesses.
7. The Dreams
Some people think they make money to be happy in life. The reality is, most of the people work hard to remove labor from their lives. They imagine themselves in a position where they are sleeping in their beds and their businesses or investments are making money in the meantime. That’s the dream most of the people have when they invest money in trading or businesses. Unfortunately, a trading scam that manipulates these thoughts is not so uncommon. There are many online entities that are not really brokers but people who claim to have created the perfect software for trading.
They tell you that they are developers and that they have created a software that you can use to make money. So, in essence, all you have to do is sign up with them, create your account to use the software, and put it on autopilot mode. The software, which is also called a trading bot, will apparently make money for you. The software understands the ups and downs of the markets and can perfectly predict the direction the market is about to move in. In short, the developers of such platforms claim that you will make millions by doing nothing.
You can already sniff the “too good to be true” stench in such claims and promises. If making money through trading was as easy as this, no one would respect and revere the many trading moguls, who have become millionaires and billionaires through trading.
As conspicuous as these signs may seem, people can fall for them more often than not. It is their emotions that lead them to making wrong decisions. You might think you will never fall for such shenanigans right now, but if you ever find yourself in a financial distress, you might start considering them. Make sure that you start your trading career right now while you are making money with your efforts and sign up with an online broker that provides you with the right and reliable tools of trading.