Trading has become very popular in the past few years, so sometimes dishonest brokers try to take advantage of regular traders. They may promise big returns and bonuses to attract traders and then steal data, delay withdrawals and keep all money to themselves.
So how to know if your broker is legit and can be trusted? We have gathered the main steps you may take to check your broker and avoid being scammed.
Do The Research
How to choose a trading broker, when there are so many choices out there? It is generally advised to pick brokers with good reputation and a long history of operation. Of course, if a brokerage company was created recently, it doesn’t automatically mean it’s a scam. However, it is easier to check the credibility of companies that have been around longer, as there is usually more information about them on the Internet. And they are more likely to provide you with a better trading experience, having improved their services over the years.
To start off, you can check out a company’s official website. It should have some information about the broker, its trading conditions (payment methods, fees, etc.) and contact details. Reliable brokers also have a multilingual support team ready to answer traders’ questions and provide useful information. So use this opportunity to get all the facts and figures you need to feel comfortable and protected on your trading journey.
In addition, you can check the broker’s regulation. Some countries have stricter rules when it comes to foreign brokers and demand a local registration to provide trading services there. Others don’t have such requirements. Overall, brokers don’t need to have a registration in every country to operate globally. However, if you can’t find any information about its regulation at all, this may be something to consider when making the final decision.
Beware of Scammers
There are also cases when shady companies use the logo of a reliable broker to attract traders and steal their money. They can create websites that imitate the real broker’s online pages or start Youtube channels using the official logo. To figure out if it’s a scam, pay attention to what they are offering. If they claim that traders will receive guaranteed income or propose bonuses on deposit, it’s likely a fraud. International regulations normally prohibit brokers from offering such bonuses and require them to disclose potential risks to traders.
Monitor Warning Signals
Nowadays, people often use the Internet to research different companies. However, it isn’t always a good idea to look for information about a broker in a general Google search, as it can be unreliable and outdated.
Instead, you can check out the official websites of your country’s financial institutions that oversee economic activities. They may issue warnings to dishonest brokers, if they notice some questionable activities. This could be a signal for traders to avoid such companies to protect their capital. In most countries, financial institutions share the information about such warnings on their websites. Usually traders can just type the name of a broker in the search engine and discover any notices or alerts that have been issued to it from local authorities.
Look into Verification Process
Take some time to understand a broker’s guidelines for making deposits and withdrawals. If it does not ask traders to go through verification before the first payment, this could be suspicious. Without proper verification, it may be hard to ensure that the money returns to you safely when it’s time to withdraw. Some scam brokers can be pushing traders to make a deposit as fast as possible, without checking their identities. Do not give in to pressure and consider the risks before making any payments!
In Conclusion
We have covered the main steps traders can take to figure out if your broker is legit. It may take some time to do the research and check the available information, but do not skip this step. By making the effort to learn more about your broker you could catch the warning signs early on. And doing so might save you time and money in the long run.
