Trading online is a lucrative investment or can even be a catastrophic decision. It depends on the broker platform you choose. Therefore, to avoid becoming a victim of scam, it is wise to understand the difference between good and bad broker.
What is trading scam?
Trading scams online are increasingly dominating as new brokers with malicious intention are flooding the internet. The key to avoid getting scammed is to empower yourself with information of brokers currently included in online trading blacklist. So, where to invest your money? You need to smartly invest your money after doing some homework in advance. Just because the online brokerage platform claims to be reliable doesn’t mean you need to spontaneously start depositing your money.
Call customer support to ensure the broker’s legitimacy, verify their land-based office and whether there are any withdrawal issues? Gather information from review websites and customers testimonials. All these can help in identifying a bad broker from a good one. Thus, you can enjoy trading successfully for a long time.
What is online trading blacklist?
A casual term, which refers to brokers proven to be fraudulent in one aspect or another. They may be –
- New brokers with lack of knowledge in offering customer service
- Not offering educational resources
- Fail to disclose clearly that bonuses are conditional [on reaching specific trading volume] but added in fine prints
All such things are red flag and got on the online trading blacklist. So, do your groundwork and check platforms that have earned good reputation to avoid potential money scam situations.
Each financial market accompanies financial scam fears. Forex trading scam is no different. Risk aversion and speculation, makes you feel uneasy. Fortunately, there are ways to avoid online trading scam.
Forex market is very intricate. People have dedicated their whole life in learning professional trading techniques. There are a few, traders who take part infrequently in trading activities, so are at a disadvantage in comparison to professionals.
Scams are consequences of people earning high profits through defrauding traders or investors with fake promises of profit. There is no guaranteed profit in trading market, so those who are victims of scam are new to trading arena.
Trade market is designed in a way, where one trader wins while other loses. A broker, who claims that loses won’t occur or there is low risk can be categorised under scams. Moreover, the one who falsely hypes or purposefully mismanages accounts or sells software program with a claim to give you wins is culpable for scamming.
Market functions through high leverage offers. This encourages traders to earn large profits but with large risks. Therefore, detecting forex trading scam is hard, especially for those less knowledgeable about the trade market. Majority of professionals will use 10:1 as leverage and not more but at times retail customers will be offered 50:1 to 200:1 as leverage. It is wise for investors to accept as much risk as they can afford or their financial status may crumble down.
Speculations provide debatable insight into how it affects currency devaluation. There is an argument that speculators and financial market participants influence market stabilization. Many traders don’t desire to take much risk, whereas a few enjoy taking huge risks. Speculators shift the risk off their shoulder and place them on to those who want it. Risk aversion is conducted by traders, who forecast potentially looming adverse situation, so they liquidate risky assets and shift funds into low risk assets.