The online trading phenomenon is rapidly growing with a lot of people now entering the forex realm. They are looking to make a profit through it for a second source of income, side hustle, or to achieve their goals. However, one of the major hurdles in doing so is an illegitimate forex broker.
A fraud online forex broker can nullify all your online trading and investment efforts with just a single forex scam. Similarly, the rise of cryptocurrencies has led to an increase in crypto scams, which pose an additional risk to online traders.
So, it is important that you find the right online brokerage firm from the start. However, finding a reliable broker can be a challenging task because of the wide range of options available in the market.
Nevertheless, this article is here to help you out with it. We’ll give you a few pointers to ensure that you find the right online broker and don’t become a victim of any online trading scam, be it forex or crypto. So, without further ado, let’s get right into it.
Have a Conversation with a Broker
An interaction with your potential online broker can surely help clear a lot of your doubts. Since most brokers don’t have a physical presence, it can be difficult to have a one-on-one person. But you can always get in touch with them through the customer support services.
The broker that you plan on choosing should provide multiple ways through which you can reach the customer support team. As a result, you can get in touch with them without going through a lot of trouble. Furthermore, you can enjoy a streamlined trading experience.
An online broker might also facilitate you by getting a representative to meet you face-to-face. Therefore, it will further solidify their legitimacy and save you from a potential scam. All in all, it is vital to have a conversation with the online brokerage firm that you plan on signing up with.
Keep an Eye on Your Investments
The last thing that any trader should do is put their investments on autopilot. You should never leave your investment portfolio to the broker. In fact, it is best to review your statements from time to time — whether you receive them online or in print.
It will allow you to find out about any forex scams or even spot mistakes early on. Furthermore, it can help you have a clear idea about your investment portfolio. Get in touch with your online broker if you see a massive change in your portfolio or if the returns aren’t what you expected.
Also, don’t accept any assurances that aren’t backed by facts or figures. If the doubt is still not clear, then request someone higher in charge. In a nutshell, you need to ensure that you have a clear idea about your portfolio so the broker doesn’t involve you in a crypto trading scam.
Withdraw Funds If You Have Any Doubts
Last but not least, if you are unable to trust your online broker, then you should consider withdrawing your funds. Trust is the most critical element for any business transaction. So, if you don’t trust your broker, then you need to quit working with them.
But make sure to complain to the relevant authority about the broker’s conduct. The Securities and Exchange Commission (SEC) or FINRA (Financial Industry Regulatory Authority) are two bodies that you can reach out to. This will ensure that others don’t fall into the trap of this online brokerage firm.
A pro tip to help you find whether or not your online broker is an online trading scam is to check their registration with SIPC. The Securities Investor Protection Corporation or SIPC is a non-profit corporation and it aims to protect the investors in case the firm or the broker they’re working with goes out of business.
It is more like the Federal Deposit Insurance Corporation (FDIC) protects bank customers and provides coverage to bank customers. Therefore, make sure that the online broker is an SIPC member firm. This will give you a sense of security that your funds are safe in case the online broker goes out of business.