The 4 common CFD trading scams:
- Commissions on top of spreads:
Now these are the most common ways through which CFD trading scams take place. This is commonly known as commission on top of spreads and let me take you through what it means and how these scams take place. Now spreads are mainly the differences you see in the buying and selling prices of the asset when you’re buying them from the broker.
Now let me talk a little about the dynamics of this particular concept. Whenever you purchase an asset from the broker at 10 dollars you won’t be able to sell it back at the same price . The broker will buy it back at 8 dollars and the difference between the buying and selling price is how these brokers earn money and gain profits on all your trades.
However, if a broker has commissions on top of spreads they are more likely to take more money on every trade than they actually should. Your broker should always take money from you in the form of spreads. You’ll realise that you aren’t making a lot of money if your broker is taking money in the form of commissions and all your trades will be in favour of the broker rather than in your favour.
- Unnecessary regulations on withdrawals:
Now this is yet another way that brokers use to scam people and whenever you sign up with a new broker you need to open an account. Now whenever you are depositing funds you won’t have to provide a lot of information about yourself however if you have a broker scamming you they’ll ask you for tons of private information and personal information which is not relevant in the first place. Now these scammers or fraudulent brokers will ask you to give tons of information due to some policy and it’ll seem like hell when you’re going to withdraw your funds. However, in reality all the money in your account belongs to you and you should be able to easily take out all the funds. Now these funds include both the money in your account and the money you have made through your trades.
In any case you won’t need to go through all these unnecessary and irrelevant regulations if your broker is not a scammer.
- Requotes:
Now this is yet another thing you want to avoid while trading and that is mainly requotes. You’ll see on most good and established platforms you don’t have any requotes mainly because they are not necessary. This mainly goes on to show that requotes are not necessary and should be avoided at all costs. These requotes prevent you from entering profitable trades and thus you suffer and you won’t be able to make money on your trades.
- Cash deposits:
Now if you’re familiar with the online trading world, you obviously know that cash deposits are no longer a thing and are not viable anymore. The latest regulations state that online brokers are not allowed to take money from their trades in the form of cash. Whenever you sign up with a new broker you need to make sure that you’re sending them money in your trading account through a way that you can keep a record of and save it.
In cash deposits there is no record of any payment and the broker can easily say that you didn’t pay them in the first place. know that cash deposits are not a thing anymore. In fact, the latest regulations do not allow online brokers to accept money from their traders in the form of cash.
The Global Payback to your rescue:
Now you might be wondering where I’ve gotten all this information from, well let me introduce you to The Global payback.
The Global Payback is a website made solely for all new traders and CFD investors. I went and found all this information on the website. In addition to being an excellent source of information, The Global payback specialises in all types of CFD scams and is known to help customers report scams and recover money.
Do check out the website and if you ever feel like anyone is scamming you or your broker is being shady, report it and this company will help you. The Global payback will help you identify whether the broker is a scam and if the broker is then they’ll help you report and alert the appropriate authorities to recover your funds if you lost any.
