“Rule number one: Don’t lose money. Rule number two: Don’t forget rule number one.” – Warren Buffett
The explosion of Internet access across the world, as well as the contraction of the online world into a virtual global village, are two of the factors that have led to the improved access to (and increased number of) online financial market trading brokers. However, these factors have also led to an increase in online fraudulent or scam operations.
This does not mean that you, as a potential online CFD (or Forex) trader should stay away from investing online because of the risk of signing up with a fraudulent broker. As the www.jonesmutualfraud.com notes, the salient point here, or the question that should be asked and answered, is how to determine whether an online trading broker is bona fide or not.
Online Trading broker: Genuine or fraud
Fortunately, there are several simple ways to determine whether an online broker is genuine or not. Here are three tips to help you avoid online trading scams:
“A scam is only a scam when it is discovered by the gullible that were taken in by the lure of making easy money in the first place.” – Anthony T. Hincks
This quotation by Anthony Hincks perfectly depicts the rationale of the oldest financial scam around. Financial fraud is only successful because it baits people into believing that it is easy to make money trading on the global financial markets. The fact is that there is no simple way to generate large sums money.
Thus, if an online trading website advertises that they have found the elixir for generating large sums of money online, it is a good idea to avoid signing up with this company.
On the other hand, a website owned by a genuine broker will clearly display a risk warning (such as the one listed below) on their website, alerting investors to the risks involved when investing in CFDs or Forex.
“Risk Warning: CFD (or Forex) trading is highly speculative and carries a high level of risk. You may sustain a loss of part or all of your invested capital; therefore, do not speculate with capital that you cannot afford to lose.”
Online Trading platform user interface and usability
It is also a known fact that trading profitably consistently is not a simple matter. Therefore, it is vital to choose an online trading partner with a simple to understand, easy-to-use online trading platform. Furthermore, because CFD trading suits assets whose prices are fast-moving, it’s essential that the online trading platform is updated on a real-time basis. Any delay in showing linked asset prices will cause traders to make incorrect investment decisions; thereby, causing financial losses.
Quality of website
One of the most natural methods to ascertain whether an online trading broker is vested in their online traders’ trading success is to look at their website. A site that seems as though it has been constructed in a hurry with no thought to design best practices and is almost impossible to use shows the following:
- The broker does not intend to build a successful brand that will be around for a long time.
- The broker is not interested in whether their investors trade successfully or not, or the broker is fraudulent and is only interested in scamming traders out of their money.
On the other hand, it is worth considering signing up with an online trading company that ensures that their website is designed and constructed according to industry best practices and is intuitive and straightforward to use. Once you have identified a platform you think might work for you, it’s always worth checking online and seeing if there is something like this etoro opinie review available so you can get all the information you need and make an informed decision before signing up and starting to trade.
Again, because it is not a simple matter to trade profitably on the global financial markets, it is vital that the broker you choose to sign up with has a comprehensive education centre. The education centre should consist of a trading academy with a range of educational material for all traders from novice to advanced traders. Furthermore, it should include supplementary material like videos, eBooks, and documents on a wide variety of online trading topics.
Finally, the broker that you sign up with should have financial market trading specialists and analysists on hand to help you to trade profitably. They should be experienced in analysing asset price movements by interpreting technical indicators and oscillators to determine price movement trends.