How to recognize an online trading scam?

The concept of online trading sounds pretty appealing, doesn’t it? You can just sit back at home and relax, click a couple of times, make an investment, and than you just sit and wait to see if your prediction turns out to be correct (and profitable). But many new and inexperienced traders get carried away by this and never check if the website they’re trading on is legit or just a scam set up to try and extract as much money as possible from its victims. And while the latter have been growing less and less frequent over the last few years, it still pays to be on your guard. Fortunately, there are some things that can signal to you right away that something is wrong, so let’s go through them, shall we?

Support

Often overlooked by traders, the quality of support is an excellent indicator of a broker’s reliability. Scam brokers simply don’t have the manpower and resources to man the live chat all the time, and this is often on the website just to lull you into the sense of security. Good serious brokers will have an operational live chat, sometimes even 24/7, so you will be able to get some info from the operator there. If you initiate a live chat session and nobody’s with you in a reasonable amount of time, you should start feeling suspicious. Pleasant communication goes a long way in establishing a relationship of trust between the parties – don’t ignore it when testing a website out.

Also, you may want to look into the education options a company provides. It’s a big difference if they have just a bunch of small articles or if they have invested time and effort to set up webinars, for example, or to provide you with videos to help you visualize main trading principles.

Licence

Paperwork is also something vital in proving a company is legit and has the right to provide brokerage services. Usually, a broker will mention the fact that they are regulated on their homepage, and if it’s not there look for it in the FAQ section or contact the support. A license in this case means that the website you’re looking into has been inspected by a regulatory body and that it has met the requirements to operate on the financial market of a particular area (usually, these bodies are national regulatory bodies). In Europe, CySEC license is the most famous license, but each country has its own, or it at least has a registry containing the information on your potential brokers. Do keep in mind that getting a license from a regulatory bod may take time, so if you’re examining a newcomer to the industry and they don’t have a license, that may not necessarily mean they are a scam.

Review websites

There are plenty of websites out there dedicated to reviewing providers of online trading services. Reading their analyses can save you a lot of time you’d otherwise spend digging for info on a broker. In these texts, you can usually find out all about a company, from their financial requirements to whether or not they have a license. This IQ Option Scam Test is a great example of such a text because it thoroughly approaches the company’s offer and presents you with all relevant security information in a clear and simple way. Naturally, if you’re at all familiar with the online trading world, you know that IQ Option is pretty much the best company out there at the moment, but if you’re considering someone else, this is how the analysis of that company should look.

Other tips and tricks

Since online trading is not exactly a new thing anymore, some companies (like the aforementioned IQ Option) have made a name for themselves and proven that they can be trusted. They are all at the top of the list of best brokers, so herd mentality in this case is a good thing. Simply, if you want to be sure you’re dealing with a legit broker, pick one from the top tier – they certainly didn’t get there because they are scams but because people realized they provide a good service.

Furthermore, when creating your profile, be careful which info you provide. It’s not that this info is in danger with a reliable broker, but it’s just that some can employ pretty aggressive tactics to get you to deposit more funds to your account. So try to avoid giving your phone number, for example, if it’s not necessary. And if you do get an offer like this, it’s better to decline them. YOU are the one who has to feel up for it when it comes to depositing more money, you shouldn’t allow yourself to be talked into it because it usually turns out not to be right move to make.

Conclusion

Please don’t let this article scare you out of starting to trade online if that’s what you really like. That’s not the goal of this text. Its goal is to help you keep yourself and your money safe and to help you make sure you are dealing with a reliable and trustworthy company. Online trading is a lot of fun and can even bring you a nice profit, so why let some scammer take that away from you? There are more than enough reliable brokers on the market for traders of all profiles, and no matter if you want to make large or tiny investments, you will be able to find the perfect trading partner.

Check the licenses, check the support and try to get some feedback from other people who have traded with the company you’re considering. It’s the best way to make sure. And once you decide on who to open your account with – good luck!

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