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online trading scams

How to be safe from online trading scams?

How to be safe from online trading scams?

Though scam firms will always find new ways to mislead people, a majority of tricks are still used commonly by fraudsters and anyone about to get started with trading should first take time to understand them.  

Avoid false claims regarding profitable trade deals

Scammers generally use attractive but fake deals to lure potential customers. They promise heavy profits that end up convincing financially desperate or vulnerable individuals. To differentiate between genuine and scammed deals, one should always look for verifications of the same. In the world of trading, if a fact cannot be backed by numbers, it is probably false. 

Some companies also promote low-risk (or completely risk-free) deals that can produce guaranteed high returns. A trader should always realize the fact that the margin between risk and returns is seldom that huge. Thus risk-free profitable investments are an obvious red flag.

A few firms even go to the extent of claiming that they have found a revolutionary but secret formula that can forecast stock prices. They try to sell software or applications carrying that special algorithm to inexperienced customers who are unaware of the product’s blandness. 

How to know if the company you are registered in is a scammer?

Even if one is already unfortunately registered into a scam firm, he or she can still look for signs to avoid impending dangers. The firm may notify registered users about their earnings or profits. However, if it fails to produce authentic track records of the trades made, it should be obvious that the firm is not trading its users’ assets directly. Companies with trade practices displaying similar symptoms are probably scams. 

Next, one should check on the strategies undertaken by the trading firm to win profits. If a majority of them turn out to be just ‘scalping’, i.e earning quick profits over small changes in the stock price at a favorable point of time (especially as soon as a trade becomes profitable after execution) then the associated firm is a scam. They advertise unreliable trade schemes that are not flexible to varying market conditions.

Another way to determine the authenticity of a trading firm or platform is to check if it asks for subscription fees for letting users find out good trade deals. If the deal is good enough the firm should not need extra money off subscription charges. The deal itself would have covered the required profit. Such baseless demands should be considered warning signs without thinking twice.

Lastly, if the trading platform opens accounts for its users through unregistered brokers, one can be sure that his or her money is in grave risk owing to the inability to track such unchecked middlemen when adverse consequences occur. What actually happens is after a few trades they close the user’s account, which is then used by the brokerage company. As an excuse, they tell the user that the fault is of the market and not theirs. List of names of regulated brokers and companies can be availed from a regulatory authority.

Other signs

A few scam firms keep sending emails asking for personal information like name, address, phone number, card number etc to get started with trading. Most of this data, carrying not much relevance to trading, is later sold to other  A legitimate companies, though might try to promote itself, will never disturb uninterested individuals with spam. 

Avoid trading platforms that demand download of malicious or device-harmful software. 

Firms lacking or declining to reveal background information like physical address, trading history, etc. are usually scams. 

What to do if already scammed?

The best advice would be to contact a recovery firm. One example is Funds Recovery which expertises in Crypto Currencies, Binary Options, Forex and CFDs scams. They do so by maintaining large databases of reported scams and scammers all around the world making it easier to track the required miscreant.