Before you get started with any career or any business, know that there are going to be scammers all around you and you need to find a way out on your own to stay safe and protected. Especially when it comes to trading, whether it’s forex or binary options, know that you cannot trust your broker all and all and you need to make sure that you aren’t falling a victim to any Ponzi scheme broker.
You see, your broker plays a massive role in your trading business and you just can’t take any risks in that regard. You need to make sure that your broker is being very much honest with you, he is giving out you the returns that are all yours and you need to make sure that his dealings with you are transparent.
If you search on the internet right now, chances are that you will see a lot of people complaining how they got trapped in a Ponzi scheme and this can end up in a situation in which you will be questioning that, “is binary option a scam?”. Well, for starters, “no” binary option is not a scam at all and the only place where you might face some problem is when you will choose a broker. You see, as said earlier, your broker plays a very important part when you close a trade in binary option so make sure to choose your broker wisely.
Now, for those who don’t know what a Ponzi scheme is, it basically is a fraud in which some money from the new investors is generated and is given as a return to the early investors. All of this creates a false idea that everyone is getting some profit out of this process until the time comes when the scheme actually collapses.
Here are some of the best ways to avoid Ponzi scheme brokers;
1- A background check
Only 20 percent of the investors and traders out there conduct a background check before hiring a broker and well, that’s the place where all the issue begins. You see, make it rule that whatever you want to purchase in the world, you are first supposed to do a background check. In case of a broker, you should first check the experience the other person has and read reviews about him on the internet before making any final decision.
2- Look at the firm
Go to the database of SEC’s EDGAR for some free corporate information and there check for the lawsuits and bankruptcies, if you find the name of the broker there then obviously you know what is supposed to be done next.
3- Red flags
These brokers know how to make you their prey by using different words like “risk-free”, “guaranteed returns” etc. Just know that these are nothing but some red flags and you are supposed to be careful about them. Don’t fall a victim to such words and do the research you think you are supposed to.
4- Read the reviews
Open up a legit reviews site and read the reviews about the particular broker there. If the reviews are good enough then yes, hire the broker right away but if you think there’s something fishy about someone then just don’t even think about hiring them because if you do, it’s going to be plain stupid.
These are some of the best ways to avoid Ponzi scheme brokers. Use the tips we just gave, and we assure you that you won’t be disappointed with the end result.