While the investment industry is full of legitimate people looking to help you make the best investments possible, there are a select few looking to make a quick buck at your expense. You need to make sure that you know the signs to watch for with an online broker to avoid getting scammed no matter what. Here are some of the key signs you need to avoid.
If you are opening an account with an online broker, they are going to be working closely with you to get you the best results. What should be an immediate red flag is an unwillingness to talk to you. They should be happy to speak to you about any concerns that you might have, and they should also be happy to talk through options with you.
While you can’t expect your broker to be at your beck and call all the time, you do need to make sure that they are replying to you regularly. If a broker seems reluctant to talk to you at all, you need to seriously consider that they might be scamming you.
Everyone needs to gain experience in their chosen fields, but choosing a rookie trader over one that is more experienced might not always be the right choice. You need to think very carefully before you ever decide to opt for a rookie trader and online broker.
They might be willing to try to cut corners when trying to achieve your desired results. However, the issue with this is that you can then end up with them making a costly mistake for you. If you do want to take the risk of using a rookie trader, make sure you also know about an effective Forex trading scam recovery path that you can use just in case your broker is not as legitimate as they might claim.
If you suspect that your online broker is engaging in churning in any way, you need to make sure that you cut them loose and find another. Churning is not allowed in trading circles, being both illegal and unethical.
This is when a broker engages in excessive buying and selling of securities with the goal of generating commissions that best benefit the broker. It typically happens with brokers who have full control over investment decisions. If there are plenty of purchases that you do not recognize and do not seem to be fulfilling your goals as an investor, you may be a victim of churning.
It can be difficult to confirm that you are being scammed by your online broker, but if you think you are then you need to verify it as soon as you can. Gather up your investments and start to search for a broker who can definitely work in your favor. Staying with a scamming online broker is only going to result in you losing even more money than you might have already. Always research your brokers properly before taking on their services.