CFD Trading Fraud
One of the best ways of making money on the internet and from the comfort of your home is through trading. Online trading is becoming more and more popular with the passage of time. However, this popularity has brought with it some disadvantages as well. As good as many online brokers are, there are some evil entities that are always looking to make a fool out of you and take your money in the name of CFD trading. CFD trading is the most popular way to trade on the internet because it lets you trade many different types of assets without owning them and take advantage of huge leverages on your trades.
If you have signed up with the wrong online CFD broker, there are four main ways you can be scammed. Let’s talk about them one by one.
1. Commissions on Top of Spreads
One of the first and worst ways you will lose money to online CFD trading scams is in the form of spreads on top of commissions. So, you have to understand the two concepts here so you can know what really is happening in the digital world of trading. When you talk about spreads, these are the differences that you see in the buy and selling prices of the assets when you buy them from the broker. If you buy an asset A from the broker for $1, you will not be able to sell it back for the same price. When you sell it back, the broker might pay you something like $0.9. That’s the difference that helps brokers make money from your trades.
However, when a broker has commissions on top of spreads, you can be sure that you will pay more money on every trade than you should. The broker should only take money from you in the form of a spread. It can make as much money as it wants by making the spreads loose or tight. But when there are commissions, all the profit you make on your trades is lost in the form of spreads and commissions. You find out later that you can never make money with the broker because you are paying an unnecessarily huge price for your trades.
2. Unnecessary Regulations on Withdrawals
When you sign up with a broker, you have to open an account. While depositing funds in your account, you might not have to provide a lot of information about yourself. However, the wrong brokers will make you provide them with a lot of information when it comes to withdrawing your funds. It seems as though all the policies of the world apply on you because you thought of withdrawing funds from your account. In reality, since the money in your account belongs to you, it should not be an exercise to pull the funds from your account. They are either funds that you have deposited or those that you have earned as profits on your trades.
In either case, you should not have any trouble in withdrawing money from your account. That’s not going to happen when you sign up with a fake broker or scammer. They always have many different policies that make it nearly impossible for a trader to withdraw money from the account.
That’s something you want to avoid at any cost when you sign up with an online broker. In fact, you will notice that the best online brokers tell you that there are no requotes on their trading platform when you sign up with them. This shows that requotes are not a good thing and you should stay away from them when you are with an online broker. What happens in a trade is that you can’t enter a trade because the broker you have signed up with does not want you to. You have entered a price that the broker does not like and that’s why you are not allowed to enter that trade.
In this manner, fake brokers and scammers can stop you from entering a lot of benefitting and profitable trades. As soon as they realize that you are going to earn some profits on your trades, they throw a requote at you.
4. Cash Deposits
If you are familiar with the online trading world, you should know that cash deposits are not a thing anymore. In fact, the latest regulations do not allow online brokers to accept money from their traders in the form of cash. When you sign up with a broker, you have to make sure that you send the money in your trading account through a method that you can keep a record of. When you send cash, you don’t have any record to prove that you had made the payment to the broker. Even if you have some proof to show that you have sent the money to the broker, the broker can easily claim that it never received that money.
What Should You Do?
You should use online companies that can help you figure out the best online brokers before you sign up with them. For example, you have Money-Back that provides you with this amazing service. Before you sign up with a broker, you can sign up with this company to get help with your exploration of the best broker. The company will provide you with all the help you need to verify legitimate brokers and sift the illegitimate ones. In fact, you can get help from Money-Back even when you have already been scammed. The company will help you recover the money you have lost in the hands of a scam through its team of lawyers and experts.
Be very careful when you sign up with online brokers. You can’t really do much when you have already been scammed unless you contact a company like Money-Back. If you think you can recover the money yourself, you are making a huge mistake. Online scammers are quite sophisticated with their scams. They never leave any chance for you to get the money back. The only option for you to get the money back is to hire the best experts who know this trade.