Which do you think is more dangerous in a ‘gun’ or a ‘bullet’? I bet most of you would think its a gun. Well my friends a gun is useless without a bullet!
If i relate this to trading, the market is the gun and the broker is the bullet. Brokers are more dangerous than the markets!
Now lets break this into simple units. Who is a broker? A broker is a financial organisation where traders open accounts, deposit funds, trades and then withdraws profits generated on their trading account to their local bank or E-currency account respectively.
So how do brokers make their own money? Obviously we all know everyone is in business to make profit, be it trader or broker. We are all in business for a common goal ‘PROFIT’. Brokers majorly earn their own share of profit from commissions charged on traders orders for executing trades on financial markets. For every trade or transaction executed by traders, a commission is earned by brokers! Its as simple as “abc”.
However its so unfortunate things have changed drastically over the years. Brokers have evolved over the years to rip traders from their hard earned money. This is why you see various brokers springing up from here and there every now and then. Sure we all know 95% of traders (be it FOREX, binary, sports trading, crypto currency) are going to loose naturally on the long run. But these recent times brokers cant even wait for nature to take its course, instead they hasten it by manipulating a lot of things that affect traders performance which triggers emotions of traders resulting into loss!
In this article i will be teaching you how to fish out scam brokers as they are all over the internet looking for preys to feast on. Important factors to consider when choosing a broker and avoid the scam ones includes.
PAYMENT OF FUNDS:
Payment of funds is the number one factor you should consider when dealing with a broker. You have to browse or research all over the internet to figure out if the broker consistently pays out funds to its clients or have a habit of withholding clients funds. There are some brokers out there, once money goes in, it never comes out regardless of profit you made on your account or even your initial deposit. At least if eventually you discover foul play from a broker over a short period of time after doing business with them, you should be able to get your money out as fast as possible. Its very frustrating going through the stress of trading and earning from your sweat, then a broker ties down your deposit plus profits rendering you helpless. I have seen brokers with ugly websites, not even licensed under a serious regulatory body and yet pay out money very well to clients.
Its very important to deal with brokers who are registered under serious regulatory bodies. Regulatory organisations who do not condole any form of misconduct from brokers are the best. When a broker knows its license of operation could be revoked by a regulatory body or a huge fine could be given to them to pay if they mess up, such broker will behave normal. Though there are some brokers out there that are not regulated but are reliable, however its not worth taking the risk!
POOR OR NO CUSTOMER SERVICE:
A transparent broker will most times have a ‘reasonable’ customer service operator online 24 hours 5 days a week who is constantly willing to answer and solve all possible problems clients could face dealing with the company. Some brokers customer service operator rarely comes online, some do not even have one at all. Tell me how do you solve an issue when there’s no one to communicate to during such periods. You are left totally in the dark! Some decent brokers who do not offer online chat can still be accessed via email and they respond promptly while some do not even respond to emails. Also you have to see that they are doing all their best to solve a case to be sure they are legit.
FREQUENT WEBSITE OR TRADING PLATFORM MANIPULATION:
This is one of the most common FOREX or binary options scams. As for binary options trading, you are in a certain trade, and it is set to expire in a few minutes. At the time that the trade is meant to expire, you are in money. But then for some unimaginable reason, the clock keeps running. A few seconds later, it stops, but the trade is a loser. The broker will claim it is a site error and point toward terms and conditions stating they are not responsible, but it is almost certainly malicious. In cases of FOREX trading, you see a clear opportunity to get into or get out from a market, you then you notice your trading platform keeps freezing hence enabling you not to get into or out a market.
DO YOUR RESEARCH WELL:
Are you the first customer to raise this complaint, or have there been others before you? It is a good idea to know the company you are dealing with. Preferably of course you did this research before you signed up for a FOREX, binary options or crypto-currency account, but maybe you made a mistake and rushed in without doing your research. If so, it is time to catch up on that research now.
If you are the first customer to have this problem, maybe there is a simple misunderstanding. If however you find a bunch of customers before you with the same complaint, something else could be going on. It may be malice or just incompetence, and the reviews will probably shed some light. Sometimes you may find a set of steps you can take to resolve the problem based on the experiences of past customers who have successfully resolved the issue. If so, follow those same steps.