Deception on the stock exchange can be either explicit (rude, when the trader realizes that he was deceived) or hidden (there is no deposit, but the trader blames himself, although in fact he was deceived). We told the last article about what kind of fraud schemes by other traders lay in wait for a novice investor. Below we will talk about deception by another participant in the transaction – the broker.
Types of fraud on the stock exchange: how not to lose a deposit at the “kitchen” broker
1. “Paid Trading Signals and Social Trading”. The broker’s website is full of advertisements calling for copying trades of successful traders, and this is so tempting: just do what a successful investor does (or open positions opposite to the most unsuccessful trader). However, it is impossible to open a minute-to-minute deal, as well as close it. And given that the amount of 10-100 dollars. The US does not enter the market, the profit remains with the broker. Paid trading signals are also a way to lure money, since the promised probability of up to 90% of success is fantastic.
- Protection: carefully filter broker’s advertising offers, not buy signals, advisors, strategies.
2. “Bonus programs”. Fraud scheme, common in binary brokers. Bonuses can immediately appear on the account after replenishing the deposit, but the fact that they will need to be returned, and even real profit can be withdrawn only after transactions for a certain amount are written in small print.
- Protection: refuse bonus programs before trading. Read the bonus terms carefully! Remember: your principal amount is burned first and only then bonuses.
3. “Manipulation of quotes.” Favorite method of zeroing the deposit “kitchens”. When it seems to you that the price trend is about to reach the placed order, it suddenly unfolds. Another option: in the case of a profitable transaction, its results are not counted (the reason is not difficult to find), a stop-loss may fail. But slipping orders, which is considered to be a sign of fraud on the stock exchange by newbies, on the contrary, says that the transaction takes place in the real market and the broker’s influence on the price chart is limited.
- Important: in the trading platform offered on the broker’s website, a plug-in can be built in, with the help of which you can remotely adjust the schedule and placed orders. Cheating on the exchange will be invisible to the user. An example of such an add-in is Metatrader manager in MT4, with which the broker can see all client requests. Protection: use a trading platform taken from another resource, trust only reliable brokers, read reviews and analyze the causes of unprofitable operations. Summary . Only experience, prudence and wit will help protect you from fraud on the stock exchange. Remember that the first deals are almost always unprofitable, and only by gaining experience will you learn to recognize fraudsters. And FxCash rebate service will help you with that!