CFD Trading Fraud
Do you want to make your investments safe before you put them in financial markets through trading? Do you think CFD trading is a great way for you to trade and make money with the savings you have in your account? If that’s the case, you will first have to sign up with an online broker. When you sign up with an online broker, you have access to the trading platform where you can trade all your favorite assets. More importantly, if you want to trade many assets from the same trading platform, you will have to go with CFD trading, which gives you access to cryptocurrencies, forex, stocks, indices, and commodities from the same trading platform.
But how do you know that you are signing up with the right broker? How can you be sure that the broker you are signing up with is not going to scam you? Here are the five signs that should help you identify a CFD trading fraud before you make the mistake of signing up with it.
Five Signs Your CFD Trading Broker Is a Fraud
1. No Regulation in Place
This is the first sign and the most obvious one. If you are signing up with the right broker, you will find all the regulation information right on the website. The regulation of the broker is your first sign to know that you are signing up with a legitimate broker. A broker proves the authenticity of its trading procedures and dealing of financial matters through regulation because then there is a regulatory authority keeping track of everything that the broker does. The regulatory authority can protect your interests in the event the broker does something wrong.
The wrong brokers never have regulation in place. They cannot obtain any regulation because as soon as they are in front of the regulatory authorities, they get caught in the act. So, you should make sure that you sign up with only regulated brokers.
2. Promises of Wonders
When the broker makes promises, you should be clear that you are signing up with the wrong entity. You will never see a legitimate broker make any claims about your earnings because they can’t. The trading world does not work this way. How can a broker give you the guaranty that you will make money when the trading is in your hands? You trade, you open the position, you close the position, and you decide when to trade. So, at the end, it is completely dependent on you how much money you will make on your trades. When you see that the broker you have signed up with is promising huge returns on your investments, you can be sure that it is a fake broker.
3. Unbelievably Huge Leverages
There is nothing wrong with the leverages that you get from your broker. When you sign up with a CFD broker, you are bound to get leverages on your trades. You can find out all the information about leverages from the accounts type section on the website of the broker. The leverage is there to help you enter big trades that you cannot make because of the limited amount of money you have in your account.
Online brokers try to give you leverages, and they try to keep them big. However, when things start going over 1:200, you have to get a little doubtful. Such huge leverages are not good for new traders nonetheless.
4. Huge Welcome Bonuses
An online broker should not feel the need to provide its traders with bonuses. You are a trader and you can make money by trading. It is a professional way of making money and more like you are partnering up with the broker to make money. Leverages are already enough help from the broker to increase your profits. Now, if the broker wants to give you some benefits, it can offer you some bonuses. However, some online brokers have extremely huge bonuses. You can look at the amount of the bonus and tell that the broker is trying to lure you into signing up with it only through the bonus. That’s a way of scamming new traders who know little about online trading.
5. Inconsistency
You will find a lot of inconsistencies on the websites of online CFD trading frauds. They have one thing mentioned on one page of their website and another thing on another page. For example, you might see from their main menu that they offer you commodities, stocks, and forex. However, when you look at their account types page, you might discover that they talk about cryptocurrencies as well. In addition to that, they might show you that you can trade stocks, commodities, cryptocurrencies, and forex currencies with them, but when you look at the theme of the website, it revolves around forex trading only.
How Can You Get Help in Choosing the Right Broker?
There are many ways for you to get help in choosing the right broker. First of all, make sure that you do a lot of research on your own so you get an idea of what is going on in the online world. Secondly, you can look at online reviews to find out about online brokers. The most important thing you can do is to take help from Money-Back. Money-Back can help you identify scammers before you even deposit any money with them. This company works in this field to not only identify scammers but also get your money back if you have already been scammed.
Final Thoughts
There are more scammers online than you might imagine. You have to be very careful with everything you do online. When it comes to trading, it should be clear in your mind that you should sign up with a regulated broker. At the same time, you should not fall for any promises and huge claims, because professionals never follow this practice. Get help from every resource that you have available and sign up with an online CFD broker only when you are 100% sure about its legitimacy.
