Trading online has its risks and if you are not careful, you could end up losing your money to unscrupulous traders and scam artists looking to take advantage of innocent people who are new to currency trading. You need to make sure you do your research before you send money to an illegitimate broker to make sure you don’t get ripped off.
Here are some things you can do to make sure you are trading with a legitimate broker so you can protect yourself from the bad ones.
You should make a list of brokers and compare them to find out which ones are the best. You should review any complaints filed against the company and if those complaints were resolved to the satisfaction of the customer. This will let you know how good a broker is by the opinions of past customers and let you know of the complaints the regulatory agency has had about them.
“Too good to be true”
“Too good to be true” is an old saying that still holds true today just as it was when it was first uttered over 400 years ago. If you get an email or text that tells you a broker can provide terrific results that no one else can, you can be assured that the broker can’t produce those results either. You need to stay away from brokers who promise a rate of return of any kind.
All investing and trading involve risks. A broker who says there is little to no risk in trading in currencies is not being honest. Even a healthy currency can undergo dramatic changes in a short period of time if it gets involved in a war, there is political upheaval in the country, or if the stock markets start to crash. Low risk sounds like a sure thing, but there aren’t any real sure things when you invest in currencies – there are only educated guesses based on past results that may or may not pan out in the future.
Sending money online
You need to be especially careful when working with broker agencies that don’t have a physical office in your town, city, or region. There are many online brokers who try to solicit business by having people send money over the web or through a money transferring company like the Western Union. There is usually no way to track the money once it has been sent and received under these conditions and you won’t have an avenue to get the money back once it’s gone.
All legitimate money brokers are regulated through a legitimate regulatory agency like the U.K. Financial Services Authority. These agencies oversee training, licensing, and the operations of currency traders and investment brokers. You should ask if the broker you are thinking of sending your money to is a licensed and bonded agency. If they won’t answer this question or if they say no, you should walk away from the broker and find one who is listed on a regulatory agencies’ list of licensed brokers.
Always be careful when trading money online and never invest in something that you’re not 100% certain about.