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A Beginner Guide To Avoiding Scams When Trading Stocks

Trading in the last ten years has become very common due to how easy it is to trade. Now many traders can trade in the stock market with a few clicks of a button. There are many different apps such as Webull Merrill Edge Fineco Bank MetaTrader 4 E-Trade Trading 212 Robinhood and many more.

Despite it being easier to trade using these mobile apps it is also easier to scam people especially those new to trading. Traders are very vulnerable to an online scam which is why they must be vigilant when they are trading.

Here is the ultimate beginner’s guide to avoid trading scams in 2023.

Avoid Investing In Schemes

One of the biggest trading scams is investment schemes. It is when a fake account will reach out to you recommending a stock or scheme to invest in. In this scheme they will promise you a ridiculous return on your investment. It is a scam and if it is that easy to make money the whole world would be doing it. Even if they claim they have “insider knowledge” they are still lying.

Pump-and-dump schemes are a common type of trading scam. It is when the scammer will tell you to invest in a stock. They will likely do this to many other people as well to increase the value of that stock. Once it reaches a certain level the scammer will cash out on their investment ensuring they profit while many other inventors will lose their money. A recent case of this was GameStop.

How To Spot Forex Scams

Spotting forex scams is something else that a trader must be wary of if this is the type of investment they wish to invest in.

One of the red flags of a forex scammer is asking for payment with cryptocurrency. Cryptocurrency is one of the riskiest payment methods as you will struggle to retrieve it back. In some cases investment fraud attorneys will be able to retrieve your cryptocurrency however it is difficult so we would advise not to trade using cryptocurrency.

Scammers will often contact you through social media platforms. That will usually be through Instagram however they can also contact you through messenger platforms such as WhatsApp. Usually the scammer would claim to be a financial advisor influencer or somebody else to trick their following into investing in forex.

Check Online Reviews

You must check the individual to see if they are a regulated broker. You must also see if there are reviews about this individual to see if they are legitimate. If you see they have a lot of reviews you can be certain that they are legit. Nevertheless there are also many fake reviews of those accounts so make sure you are careful with your investment.

To Conclude

There are many different ways to invest however you must be careful. Always trade with a regulated and reputable broker to ensure your trading is safe. Never trade with someone who has reached out to you as this is likely a scam.