How to avoid unreliable or even fraudulent market players
Traders should always be cautious - not only when placing their trade orders but also at the stage when everything begins, i.e. when selecting their brokers. Have a look at our six tips on what to avoid right from the start: Business terms: always make sure that the broker you have chosen discloses all documentation on their website, including detailed business terms.
Professional qualification: While your broker’s professional skills are often hard to estimate in advance, the quality and presence of posts, reports and analyses on their website may suggest a lot. Their willingness to communicate with you will also give you a hint. We recommend that you always check (in person or by phone) that real people and no trading robots are communicating with you.
Licences and regulations: One of the most important steps before signing a contract with your broker is checking their licence. Your brokers should provide their address, licence number and information on the body they report to. The regulatory body’s competence determines the offer of trading instruments to be used. Some markets have their internal rules to restrict leverage and available financial instruments.
Suspicious indications: when trading with high-risk instruments, such as CFDs, we recommend starting with lower amounts. You can also verify reliability of your broker by withdrawing your funds.
Fraudulent collection regime: some traders based their business on coaxing information out of loss-making traders. They pledge to help them get their lost funds back. This fraudulent behaviour mostly starts with a ‘consultation for free’. Be prudent and under no circumstances provide those people with your personal data and by no means with information about your credit card.
Review sites: the only purpose of a number of so-called independent review websites is to pass clients to brokers who secretly finance the sites. You can recognise them by both eye-catching advertisements playing into the brokers’ hands and their black-and-white view of the broker market.