Few people wouldn’t benefit from more money. Wages are low, and living costs are forever on the rise. As such, even those of us who work every hour are crying out for more income. The trouble is that we don’t have any spare time to dedicate to the cause. That’s why investment trading has gained such a spotlight in recent years. Not long ago, this was the speciality of the elite. But, as a result of increasing demand, it’s now possible for us all to benefit from this passive form of income. And, we’re turning to this solution in our thousands.
If you’re reluctant to hand money over to big companies, though, you aren’t alone. Trading is often painted as ‘easy money’ nowadays, but that couldn’t be further from the truth. In reality, this is one of the riskiest things you can do with your savings. With most traders having pretty high minimum investment rates, you need to hand over large sums before even getting started. And, if things go wrong, that could be money down the drain.
That said, you shouldn’t let this stop you from trading altogether. If you’re looking to make money on the side, you still can’t beat this. All you need to do is make sure that you’re putting your money in the right places. There are various ways to do that. Watching the market before investing can see you opting for the best stocks. Equally, knowing about common scams in the trading world could be your best bet at keeping cash safe.
Sadly, as with any financial matter, scams here are varied and worrying. Many trading companies are waiting to take advantage of this new wave of inexperienced investors. Make sure you don’t fall foul to their tricks by looking out for the following common scams in the current market.
Signal-sellers
When you put the words scam and trading together, you often get signal-sellers. That’s because this is one of the most prevalent scams in the world of trading today. Unlucky for you, you’re also their prime target. Signal sellers effectively offer to sell you information about the best trades going. Many claim that they can predict upcoming trading trends off the back of their experience. All you need to do is pay them a daily fee for the privilege. On the surface, this seems like an excellent idea. You want to know that you’re putting your money in the best places, after all. And, if they do start the money rolling, their fee will be peanuts, right? The trouble is that no one can predict trends in this way, no matter how long they’ve been in the industry. As such, you’re chucking money away for trades you could make without this help. Many signal-sellers also take trader’s money without ever delivering predictions as promised. Though there are rare cases where signal-sellers can help, they’re generally best avoided.
Robot scamming
Along the same vein, we have robot scamming. Again, this is a company’s way of ‘ensuring’ that your trades go to the right places. All you need to do in this instance is put a set amount in your trading account, then let a robot decide which stocks you should invest in. Most companies who offer solutions like this promise they can help you build massive wealth while you sleep, and other such ludicrous claims. The trouble is that most of these computers aren’t quite the magic machines they claim to be. For proof of why consider the point we made above. Nothing is guaranteed in trading. As such, there’s no way that a robot can ensure you the best trades. Far from what they claim, then, most robots like these hand out trades at random. That means this could see your money far less secure than it would be if you choose stocks yourself. Don’t get caught into trader jargon like ‘algorithms’ and ‘high-frequency trading’, either. More often than not, words like these don’t mean a thing. They certainly won’t make you money.
Misrepresentation
When push comes to shove, trading companies want your money. As such, they often scam you through misrepresentation. This is a crime you can find in both the above scams, but it isn’t always that explicit. Sometimes, a trader will make a trade seem like a sure thing. They may encourage you to put more money down or fail to let you know about the risks involved. This, too, is a scam you need to be careful of. It’s such a problem in the trading world that the CFTC are always on the lookout for cases of this. The fact is that there is no such thing as a sure bet in trading. No company should ever claim that there is. If they do, you should steer well clear. If you feel the misrepresentation is severe enough, it may even justify a tip to the authorities. If you’re unsure how to go about this, don’t hesitate to get help reporting your whistleblower tip to the CFTC. That way, you can ensure no one else falls foul to these tricks. Then, make sure to take your trading money elsewhere.
While these are the most pressing scams out there at the moment, they aren’t even the least of your worries. Older scams, such as point-spreading, are also worth your attention. The fact is that any trading scam going can result in a significant loss on your part. And, that’s hardly what you were after when you started on this trading journey. Does this mean that you can never make trading work for you? Not at all. Thousands of people are now successfully supplementing their incomes this way. All you need to be aware of is that the trading world is far from sunshine and light. If you go down the wrong path, you almost guarantee that you’ll never see the return you’re after. So, stay on the straight and narrow and remember that, if something doesn’t feel right, it probably isn’t.