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Brokers: Spot the Scam

There are so many brokers today that knowing which one to go with is practically impossible for a first-timer. To make matters worse, some of those brokers are actually just convincing scams that are trying to get your deposit and make a run for it.

Why can’t the scams be stopped?

Scams are like bloggers. There are too many of them, and they do whatever they want. They can operate for weeks or months before the word get out that they are fake, then they disappear, change their domain and name and start again. If you know what to watch out for you can spot the scam in seconds. Here’s everything you need to know.

The website

Page one

Scams do a great job making their first page look convincing, but they have a habit of using the same old stuff that fooled people last year… over and over again. Here’s what to watch out for.

The Video

If you are greeted with an autoplay video that makes unrealistic promises of wealth, go to Defcon 1. They usually have a smooth and charming guy in a mansion or fast car explaining how he was once broke, and how trading changed his life. They often give numbers such as $1000 per day in the first month – with no previous experience. Seriously? If it seems too good to be true!!!

Try and find the charming CEO or spokesman on Fiverr.com or Facebook. It won’t take you long to realized that his identity is as fake as his tan and his promises.

The Testimonials

Scammy brokers invent testimonials and post them on the first page. It’s usually a thank you for the thousands of dollars I’ve made, scenario.

Respectable Brokers don’t expose the identities of the trading clients, and certainly don’t advertise how much money they made. Again check out social media. These identities simply don’t exist, and neither do the profits.

If the testimonials are video, take a look at the background. The traders (poorly paid actors) often claim to have made hundreds of thousands of dollars in the first few months, but for some reason choose to stay in a dingy apartment… would you?

The trading table

To give a legitimate feel, a lot of scammy brokers are placing tables on their site showing client investments and their winnings. Check the dates and times. T

Take a look on Monday, and you’ll see that they were trading and profiting at the weekend, even though the markets are not open on Saturday or Sunday. So obvious!

Site Content

Real brokers have page upon page of solid content. They have beginner guides, a glossary, video tutorials, eBook downloads, live chat, news reports, employee stories, company events, even an economic calendar. If you find a broker that has only 1 to 3 pages, hit the X in the corner.

Online Reputation

A simple online search will give an amazing indicator of who or what the broker is. If the first page results are full of warning words such as “Alert, scam, exposed, fake,” there’s a good chance they are about to disappear with everybody’s money and change name again.

Regulated

If you find a broker that is regulated by FCA (Financial Conduct Authority), ASIC (Australian Securities and Investments Commission), or CySEC (Cyprus Securities and Exchange Commission) it is sure they are not a scam, but not sure they are a good broker.

You are looking for a broker that has:

  • A polished website multiple pages
  • a wide variety of educational materials
  • a clean online reputation
  • a regulatory license number proudly displayed on the site

Anything else, no matter how convincing, should be avoided. Trading online has become an alternative to having a regular job for many people, but it takes years to master, and many traders learn the hard way that there are no guarantees. The best start you can have is to find a good broker. After that, patience and caution are key to lasting success.