Unearthing the Truth
When the market is flooded with online brokers, how do you know your broker caters your needs in online trading?
Unfortunately, there are many online brokers, providing forex trading and binary options services on a global scale that will often mislead new traders.
Sucked out of the thumb risk management techniques, trading strategies that are suitable for 9 years olds and inaccurate information on global markets that will literally blow your investment into smithereens. If you are a new trader that was too naïve to trust the financial broker for professional training, we are certain you are still carrying that scar with you. Of course, there must be a way for new traders to determine the quality of both forex and binary options brokers, which we will share with you.
The Account Manager’s Litmus Test
Upon registering with the broker you are likely to receive a welcome phone call by an account manager in your mother tongue. This will be the first litmus test. Any person that is capable of training new traders must be fully aware of what is happening in the market. Therefore, asking the account manager on certain market events will immediately show how professional are the services you are likely to receive.
If you are completely clueless what to ask, you should know that most brokers provide access to the Foreign Exchange market (Forex), Commodities, Stocks and Indices. Google is your best source of information. Just search for ‘Forex News’ or any instrument of your choice (such as EUR/USD, Gold, SP500 etc.) and you will find hundreds of articles. and reviews in almost any language.
After spending some reading time, after all, it is vital you will be aware of what is happening in the market if you wish to begin trading, you are ready for the welcome call. Begin asking questions like, what is the European Central Bank (ECB) current monetary policy? How did the US Non-Farm Payrolls (NFP) affected the US Dollar (USD)? If you read that gold is rising due to increased global tension in Europe/Asia, ask your account manager why gold is rising? If the account manager defends him/herself by saying that if you will open an account you will be forwarded to a market professional or even worse, provides you with information that does not match what you read in Google, you are in dangerous hands. How can a person that is unaware of the key market events can actually train someone that is completely new to the market? After all, the account manager that has been involved in the financial industry must know what is happening in the market.
Before discussing the promised market professional that is conditioned with opening an account, we have selected the most common answers you are likely to hear from financially uneducated account managers.
“It will either go up or down, you decide.”
Certainly one of the classics. Am I a fool? I want to know how when the price will rise and when it will fall using a trading strategy. This remark indicates, unfortunately, that you are dealing with a person that will feed you with toxic information that is likely to cripple your financial investment.
“It’s like poker, use the odds to calculate your success.”
Trading is far away from poker. If you view trading as gambling then you will have the success rate of an average gambler. It is more sophisticated, changing variables and adaptation to changing market conditions. Your trading strategy will protect you the undesired volatility and limit your market exposure. Comparing trading to poker, consider a different broker.
The Alleged Market Professional
As the account is a total lost case in capital markets, we cannot rely on him or her that the market professional will really meet our expectations. Inform your account manager you would like to have a 5-minute conversation with the alleged market professional. The majority of brokers will allow it. Litmus test the market expert but with different financial instruments. If you asked the account manager on the ECB, NFP and gold, ask about the Reserve Bank of Australia (RBA) current monetary policy, the Fed Quantitative Easing (QE) program and crude oil. If you have no idea what these terms mean just search them in Google and then ask to speak with the market professional.
If he survives the test, there is a fair chance you are in good hands. If not or you are met by excuses that he or she do not monitor the instruments you asked about, you are likely to benefit from poor market services that you may only realize after your investment has been totally consumed by the market. A horrific image indeed.
To summarize, a big chunk of today’s account managers and market professionals were not provided an adequate training to assist new traders. We strongly recommend you will construct your schedule to make the time for learning the market by yourself and enjoy the information we provide at DDMarkets.com.
Basic Rules for Choosing a Broker
Aside the above, below are the key rules avoiding registrations with fraudulent brokers:
Regulations – There are designated bodies that monitor the broker’s activities. The most famous European regulatory bodies are Cyprus Securities and Exchange Commission (CySec) and the Financial Conduct Authority (FCA). Ensure your broker is regulated by these bodies and do not take for granted if the broker claims to be regulated on its website. Below are the links for Cysec and FCA:
The list is relevant as of today. It is recommended you will go to the home page of either CySec or FCA and search for the broker’s name to ensure it is regulated. If you do not find the name please ask the live chat support of your broker to provide you with the link to the regulatory license. It is possible a different name will be provided (the group holdings of the broker), in which case you will have to research the provided group name to reconfirm it is legitimate or email the regulatory body.
Withdrawals – If the broker is regulated and passes the litmus test, after making the investment do ask to withdraw a small amount of your investment and measure the time it takes to reflect in your account. If it within a satisfactory time frame, that’s great. if not, you can always close your account with broker. If the funds are not received at all do not fear. Contact the regulatory body to file a complaint and they will do the work for you. Make sure to document all your communications with the broker including phone calls if possible but not a must.
We hope this information will serve in trading the market.
Last Updated on July 12, 2017