Trading is hard enough as it is. So what more if you’ve been scammed by a broker? If you’re new to indices trading, you’ll need to look for a broker. And when you’re looking for one, there are different kinds of people you’ll be able to meet.
Some are genuine in their profession, but some are waiting for the traders and investors to risk their money. Even if the broker wouldn’t steal your money right away, there are other ways to get your money.
Usually, well-established brokers are reliable and stable. However, it’s not automatically suited for you as there are other factors you should consider when looking for an index broker.
So if you need help avoiding fake brokers, here are some tips you should know!
1. Do some research
Nowadays, indices trading and even other forms of trading are done online. So since you have access online, you should use it in researching the most trusted brokers.
Then, get to know them from the outsider’s perspective. What other kinds of trading do they do? When was the company established? Can you look at their current financial statements? Are they legit? These and other important details should be easily found online. If not, you should move on to the next broker.
Once you’ve found your ideal broker, you can chat with one of their agents online. It’s not enough to talk to customer service so find a way to talk to an actual agent. Now, once you’ve built rapport, you can also research the agent, and see if he knows everything about the company and how he can help you.
2. Set a meeting and ask questions
Once online communication has been established, set an appointment to discuss more information about the indices trading they offer. It’s best if you feel comfortable about them. If not, there must be something wrong, or you don’t have all the information you need yet.
In this interview, you must prepare and make a list of all your questions. For instance, you can create a list of general topics. And under those topics are the more specific questions you’re intrigued to ask.
You can be as thorough as possible so that they can provide the information that can make you decide if you’re going to hire them. But of course, aside from the information they’ve provided, you should also counter-check this information from the research you’ve conducted beforehand.
3. Beware of additional offers
Do they offer you a lot of things that may seem too good to be true? Well, it may be their first step to get you hooked and leave you when they’re done. Indices, especially when traded under CFD, tend to be unmoderated. So when you’ve been scammed, it’ll be hard to look for the brokers.
Furthermore, avoid brokers that can promise you to get rich faster, you can make money within a period of time, and even those signing bonuses. As you may already know, trading is unsure. You don’t know what going to happen tomorrow even if you’ve predicted the market well.
Aside from the current economic state, there are other factors that may affect the price of an underlying stock. So if you know how to trade very well, then you know it’s not that easy to make money.
4. Don’t trust cold callers
Have you been receiving unsolicited calls, texts, and emails from a company? Imagine not having past interactions with a certain company, and you’ll just get a random call. Wouldn’t it be suspicious? Where did they get your contact information?
Usually, when you sign up online or access a website, they automatically get your contact information and sell them to interested companies. So as much as possible, protect your online self from any suspicious websites.
Unfortunately, sometimes, traders would agree to deposit a cheaper price to start indices trading. Beginners are the usual target, but scammers sometimes contact even professional traders just to see if they’ll give in.
5. Review their terms
If you’ve decided to invest in one of the brokers, take a close look at the terms of the agreement before signing in. Even if you see all things are sensible, give it a few days and read it again. If you know someone who’s an expert on this stuff, don’t hesitate to ask them for advice.
The general terms of the agreement can usually be seen on the website. Unfortunately, if there’s nothing about the terms on the website, you should just avoid that broker. You can give them a second chance by reading the online reviews of their past and current customers. But if it still looks sketchy, it’s time to find another broker.
Now that you know some tips to avoid investing in a fake broker, you should keep them in mind while doing your research. Also, don’t hesitate to share other tips by leaving a comment below!
ABOUT THE AUTHOR:
Aliana Baraquio is a web content writer at FP MARKETS, a global Financial Technology services Foreign Exchange (Forex) and Contracts for Differences (CFD) broker established in 2005. She also loves reading about interior design and home makeovers.