The internet has bought the world closer to our doorsteps, allowing retail investors and traders the authority to trade in stocks.
But unfortunately, so are the broker and Bitcoin scams.
The internet revolution has brought our world closer. Gone are those days when you had to inform your broker to trade stocks. Instead, the brokers would research and trade the stocks at the best price.
With the help of the internet, the freedom to choose stocks and trade them at the best possible price was a dream; now, it is possible. Retail investors and traders can now participate in the market and make a significant profit based on their research, and they now own the reins of their trades.
But unfortunately, besides genuine brokers and brokerage services, there are a lot of scammers out there to prey on you. These scammers impersonate a broker or a brokerage firm and then entice you with tall tales; once you fall for their gag, the only ones making money would be those scammers.
Sometimes you have a day job or other such priorities, or you are even a newbie to the stock market and need real trading experience. Then it is in your best interest to let your stock broker do all the trading on your behalf.
However, a few indicators indicate you are not dealing with a reputed and trusted stock broker or brokerage firm. We have listed a few signs that should raise red flags once you encounter such situations.
Brokers are misleading you while investing and trading.
Your stock broker or brokerage firm may be misleading you for various reasons. However, one must consider the possibilities that the broker may either be new to the trading world or simply out there to scam you out. These ask them to provide some glimpse or research that might help to trade. Remember, it is forbidden by the law to indulge in insider information.
Trading your stocks without your prior consent.
The stock broker or brokerage firm must trade your stocks, like buying and selling stocks, without your consent. The broker or the brokerage firm can trade on your behalf but need your consent before trading.
Misguiding you while trading stocks.
If the stockbroker or the brokerage firm misleads you on certain stocks by wrongly interpreting the market or insufficient research where you end up paying a hefty price is a sign of non-professional stock traders.
Need a valid license while trading.
Stockbrokers or brokerage firms should have a valid license and certificate to run a business offering financial advice and services. In addition, these stock brokers or brokerage firms should have a certificate from a private or governmental regulatory body. If they don’t have one, then be assured that you will be a victim of broker or Bitcoin scams.
Breaching trust and promise is a federal crime.
The stock broker or the brokerage firm needs to be upfront and honest. Since they are providing a service, they are bound by certain results and regulations. They cannot challenge what they have written in their contract. Thus, as a client, you must understand all the terms and conditions before signing on them. If you need help understanding them, get hold of any lawyer who can interpret the terms and conditions before signing on them.
Trade should be carried out as per your instructions.
When you seek professional help from a stock broker or brokerage firm with whom you have your broking account, they should follow your instructions while trading and only carry out trades of which you are aware.
Be cautious of margin accounts.
Typically, money sent to a broker for investment is placed into a cash account. Margin accounts, on the other hand, allow you to invest twice as much because your investment serves as collateral for an equivalent amount. Brokerage costs should be calculated based on the amount invested; however, less ethical businesses may calculate these fees based on the balance of the doubled margin account.
You are requested payments in Bitcoin
If someone tries to persuade you into transferring money to them in Cryptos or promises to double your Bitcoin investment, you may be confronting a Bitcoin scam. The ideal solution is to authenticate the person before moving ahead.
Ensure that your portfolio is diversified.
When you open a trading account with a broker or a brokerage firm, ensure that all your risks are properly hedged. Since they provide financial services, they must cater to their clients and ensure they stay safe. If trading in one or two stocks, then be assured they are up to no good.
The broker or the brokerage firm avoids over-charging.
Stockbrokers or brokerage firms make money on commission based on trade. However, a scammer will ensure that they will keep on trading relentlessly regardless if the client is making a profit or loss.
Your portfolio should always be adjusted so that you make a profit.
Genuine stock brokers will always strive to ensure that you make a profit. However, if certain stocks are performing poorly, they must inform you before changing your portfolio. If you are not being informed, then you have a shady broker who will only ensure their profit margin rather than yours.
A dedicated client service center.
Since everything we do is related to the internet in one way or the other, it is not surprising that these Crypto brokers or brokerage firms have dedicated client service or support centers. However, if the contact number is forever busy or keeps you on hold for extended periods, then be assured you are a victim of Crypto or Bitcoin scam.
Going through the website of a broker or a brokerage firm is a good idea. However, if you find any grammatical errors or other glaring mistakes like poor construction of sentences and punctuation marks, then avoid further investigation and search for one that fulfills your needs. Don’t forget that making a Crypto transaction would mean you cannot reverse it, unlike the transactions in the stock market.
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