As a beginner trader, it can become overwhelming fairly quickly. You have so much to learn to understand the basics of investing. Top that off with finding a reliable and trustworthy broker, and it’s easy to see why trading is not for everyone.
You’ll need a broker if you want to trade on the foreign exchange or stock market. The broker provides a platform that connects you to the market, can offer education and advice, and can even help monitor your investments. However, many brokers out there will do the opposite and cause you a massive headache.
Are you new to trading? Take a look at our list of characteristics in a broker that are red flags for you to avoid.
Can’t Find or Won’t Show They’re Regulated
Don’t get tempted by unregulated brokers. Maybe they have smaller fees than regulated ones, but non regulated brokers can cause you an immense amount of trouble.
A non regulated broker is just that – a company that isn’t regulated. They don’t report to a governing authority. That means if anything happened (glitches in the software or even unprocessed withdrawals), you as the trader have little to no protection.
You should easily find regulation and licensing information on the broker’s website because they’re required to disclose it. These MT4 forex brokers are trusted and regulated.
Offer Guaranteed Wins or Strategies
With any kind of trading, there is no guarantee that you’ll win every time. If they are, they could be dabbling in insider trading (trading off of non-public information), which is often considered illegal.
A trusted broker wouldn’t guarantee a win. So, if you come across a broker that makes this claim, as tempting as it may be, turn away and look for someone else.
Difficulty Withdrawing Your Money
A broker holds your money in an account to make trades. All the money you deposit is still yours. It is not the brokers. For that reason, there should be no issues for you to withdrawal your earnings at any point.
If you find a broker that makes you jump through hoops to access your cash, that’s yet another red flag to look for someone else. With trusted brokers, they gain nothing by preventing you from accessing your funds.
Cannot Verify Award Authenticity
Popular brokers will make their awards public because it makes their company look better. If you’re winning an award that deems you the best platform for beginner traders in a year, you’d want to show that off. However, anyone can claim they won an award on their website, even if they didn’t.
If you spot awards on a potential broker’s webpage, verify them. Can you guarantee the authenticity of the award? If not, then you’ve come across an untrustworthy broker to avoid.
Little to No Customer Support
A reputable broker provides customer support for its users. The more positive features where they can help the user, they increase the likelihood of the user staying with them.
Brokers that offer little to no customer support, or you can never get a response from them, are likely untrustworthy.
If you’re still unsure about a potential broker, you can do a few things. To start, check out any reviews about the broker. A simple Google search should provide information on the reliability of the broker. You can also browse lists of trusted and regulated brokers to see if your potential one is listed (like this list of the top forex company in India).