There are two basic things to know about online trading scams. The first is that the vast majority of all online brokerage firms are legit. The second is that while most brokers are safe and ethical, there are non-brokers who sell services to prospective traders. A small percentage of those merchants aim to extract money from new traders and investors through all sorts of cons, scams, and shady dealings. If you intend to buy or sell any type of security, commodity, or any other financial instrument via computer, it’s important to know about the kinds of situations that can be dangerous.
The definition of dangerous, in this case, means one in which a nefarious person or organization has the potential to get your hard-earned money without giving proper value in return. What are the most frequent pitfalls that new and inexperienced people tend to fall for? In addition to black-box systems, some of which sell for huge sums of money, there are offshore, unlicensed brokerage firms, companies that ask for large opening balances, and firms that impose inappropriately high fees, commissions, and other assorted charges on account holders. Here’s how to spot a shady deal before getting stung by it.
Black Box Systems
Black boxes have been around a long time, ever since the advent of online trading more than 20 years ago. The modern version of…
