Brokers Blacklist – You should avoid these brokers.

Trading with speculative financial products is not just the right strategy and good risk management, choosing the right broker plays an important role, unfortunately some brokers have faced serious problems in the past, fortunately there are also providers. Many of them work very conscientiously and in the following article you will learn how to separate wheat from chaff and which brokers you should avoid, open a trading account with IQ Option now

What are good rules?

The licensing of brokers by regulatory and relevant authorities supervised by them aims to ensure that the rights of clients are respected and their information and funds are well protected. Protection from money laundering and fraud is also an important task for regulators, however, the standards that brokers must adhere to when regulated by regulators are set by themselves and differ from those in authority for power. This is why it is important to look closely at the responsible authorities.. Because although it does not guarantee serious work: if the broker is regulated by a reliable and strictly enforced authority, the broker It is allowed to offer services and must comply with certain rules.

Client funds are managed separately

An important standard that is set by the European authorities and by several regulatory bodies outside Europe is to manage separately from client funds, these are ultimately the property of the client and therefore must not be used for value. Other expenses of the recruiter The recruiter must raise funds for advertising, administrative expenses or other expenses. Any clients’ deposits are only used to provide the necessary edge when trading, obviously separating these funds is possible in many cases even if the broker becomes insolvent in reimbursing clients. Good regulators also support this and pay attention to the correct bankruptcy processing and the bankruptcy broker’s clients get their money.

Aside from the fact that clients’ funds are managed separately, it is also important that they are managed, this too it speaks for the broker if the managing financial institution is a highly rated bank.

Regulators are looking for evidence of price changes

Controlling the correct design of trading prices is one of the tasks of any good regulatory body, however this is especially difficult with wide market makers, since in this case brokers set prices themselves and at least they do. Legally obligated as a client’s direct competitor when trading, a reputable provider hedges against the risk of potentially losing transactions by balancing all client trades internally and placing trades in. The direction is opposite to the positions held with other providers, so the broker makes his profits only with the trading fees he receives from the client, in this case there is no more conflict of interest between the broker and the client. Go because it doesn’t matter to the broker’s profit, whether the client profits or loses.

By not hedging the risk of loss in trading directly with clients on the financial markets. But by manipulating prices in such a way that clients lose significantly more money than they earn, they may be able to generate significantly higher profits. In order for such frauds to be recognized and punished accordingly, strict regulators closely monitor the price movements of all brokers, if there is anything wrong they will be investigated, if fraud is found. Through price adjustments, brokers are subject to high penalties and immediate withdrawal of their licenses.

Risk warning on broker website

A warning about the risks that trading in speculative financial products such as Forex, CFDs and Binary Options is one of the requirements that regulators place on their brokers.

As a result, online brokerage sites now also contain information about the high risk of loss, which can extend to the loss of all deposits.

It is every broker’s goal to win clients and make money with trading fees. But this must not be done under the guise of facts, warnings about the high risk of loss with speculative investment schemes aimed at preventing clients with the wrong idea from signing up with. broker and not adequately informed about the high risk

Is this type of investment suitable for clients?

When opening a trading account most brokers not only But it requires personal information such as name, address and phone number. It also includes information about the client’s financial situation and previous trading experience with financial products, although it may seem inappropriate to some traders, for example when registering with an online broker, it must be stated at Monthly income is generated and products have been traded in the past, this information serves to protect customers.

This information is mandatory for regulatory bodies operating in accordance with EU standards. Potential clients whose planned investments in the products offered are insufficiently secure and therefore unsuitable will not be accepted to trade in the first place or At least they will be advised at least per trade The dubious broker will probably accept all clients at this point as every trader shows profits to the broker eventually the strict requirements of the regulatory bodies have a point. Wishes to ensure that profits are not the top priority. Traders ignore improper investments destroying products that are financially unsuitable for them.

Warning of “Foreign Brokers”

Some of the brokers active in the market are headquartered in remote Caribbean countries and are regulated by local authorities. The Seychelles, an island off the east coast of Africa, is also a popular location for financial services providers. Local works will stipulate certain requirements that regulated brokers must meet. But they are less stringent than if there are regulations from the European Union or the UK, in many cases the regulation is also less significant to the broker’s suspicion. “Foreign regulations” offer significantly more options for fraud.

This doesn’t mean that all brokers based in the Caribbean or Africa are automatically suspicious, however, we did rate the broker’s risk of misuse significantly higher than those regulated by European authorities. Trading also has a better definition with EU regulations than with so-called offshore brokers, if there is a lawsuit against a broker then there is no need to operate in other parts of the world which is difficult for traders. For these reasons, we only recommend brokers that are regulated by specially respected bodies and therefore regularly undergo rigorous regulation.

Brokers in EU and UK

Consistent regulatory standards clearly ensure that

The abbreviation MiFID stands for “market in Directive on Financial Instruments” MiFID It is an EU directive aimed at improving the transparency of financial markets and protecting investors. The goal of MiFID is that investors can invest more easily in other European countries and online brokers are also available in the EU due to the directive. MiFID applies to all European brokers, so the regulations of each regulator are similar, making it easier for investors to keep track of the requirements.

Long-term safety should be ensured

EU brokers are bound by MiFID directives and with high security standards, for example, providers are required to verify that the financial products offered are suitable for problematic clients or that they pose a high risk. Transactions in the financial markets must be extensively documented so that the guidelines can be followed later, the advantages that the broker will gain from other service providers must be disclosed to the client.

Strict regulations aim to protect client capital and prevent fraud.

Each EU regulator

There are many regulatory bodies in the European Union, the authority regulating the provider depends on the country in which the headquarters is located.

Many EU brokers on the island of Cyprus are regulated by the Cyprus Securities and Exchange Commission. This is mainly due to the fact that the tax requirements for financial services firms in Cyprus are particularly attractive, however, strict EU guidelines are also being applied.

Germany-based brokers are regulated by the Federal Financial Supervisory Authority (BaFin), however German brokers are virtually everywhere as other EU countries often offer financial advantages under similar regulations. But German BaFin is usually regulated in a certain area, many brokers are registered with. BaFin, although it does not have a German branch, however, this registration is not linked to total control, responsibility still lies in the country in which it is headquartered.

Potential problems with EU brokers

EU regulations are set to high standards and are intended to ensure safety when trading binary options. Unfortunately, in the past regulators have intervened with European brokers, hedging generally works quite well, so clients tend to get paid in case of Payment issues arise, however, EU regulations cannot provide 100% protection against fraud or unfair business practices, traders are advised to pay attention and invest with brokers only as necessary can be made without the problems that important

What to do if you have a problem with a broker?

If there is a problem with trading, for example, if the broker does not pay the account balance in a timely manner, clarification must be attempted through the provider’s customer service first. This center advises consumers to know what to do, there may be another complaint. However, it is also possible to directly contact the responsible supervisory authority to contact the broker about his obligations and, if necessary, can take additional measures, especially when it comes to larger amounts, it is advisable to contact a lawyer in In case of doubt, the advantage of EU brokers is that a lawsuit can be taken before a German court, meaning that no trial has to be taken abroad.

Here are some warnings to these brokers:

We have compiled a list of brokers below which we recommend against registering and making a deposit for various reasons.

Banc de Binary:After issues and complaints from several investors, the broker voluntarily returned his CySEC license in January 2017, thereby preventing the withdrawal of the license.

TopOption:The broker has been one of the leading online brokers for quite some time, however, in the meantime allegations of fraud and reports of problems with payouts are increasing, so it is not possible to recommend the broker. longer

GrandOption:The parent company of this brokerage, Rodeler Limited, which has been jailed by the regulator CySEC, has been fined €156,000 for several issues, among other things, interference by the regulator. Oversight deals with unfair advertising, inadequate security measures and the broker does not respond to inquiries and complaints from clients.

ZoneOptions:We still do not recommend this Cyprus based broker.

CapitalOption:Due to the lack of transparency and some conflicting information on the website, this provider cannot be recommended for binary options trading either.

Winner Picker:Like TopOption broker, Winner Picker is operated by Savecap. Investments and cannot be recommended.

OptionTrade: Options broker OptionTrade ceased trading in October 2016 and can no longer be used for trading binary options.

Dukascopy:The website is very confusing, hidden costs can occur when trading through this Swiss provider, also Switzerland is not a member of the European Union which is why. Why is the legal process more complicated than for EU-based brokers?

OptionBit:This broker used to be regulated by CySEC According to the OptionBit website, the broker is currently regulated by the island nations of St. Vincent and the Grenadines, so it is one of those offshore brokers that caution is advised for that reason.

Algobit: Algobit not a broker Rather, it is a trading tool that identifies trading signals and advises investors when to trade. Since Algobit is offered by the broker OptionBit, which is in our broker blacklist, this tool should not be used.

General Terms and Conditions of Brokers

Before signing up with a binary options broker, prospective clients should read the general terms and conditions of the provider and register and deposit when there is no longer any doubt about the exact terms.

Make sure the broker limits your eligibility as a trader with certain orders For example, in the past, individual brokers often had issues with payments because certain conditions had to be met in advance.

Only if you have read and fully understood the terms and conditions of the broker and fully agree with them, you should register.

Even without the broker’s fault, there can be high losses.

Even if a reputable online broker offers loss protection, it is strongly advised not to pay attention to good regulation, but even if the broker complies with all regulations and takes their work very seriously, binary options, Forex and CFDs are risky. High It is a highly speculative form of investment in which profits and losses are subject to high volatility, despite extensive professional price analysis Traders should be aware of this and consider investing as firms. For example, a common mistake beginners make is that they invest too much money in one position where good risk management only takes a small sum per trade, which means you can continue following the strategy. chosen even if there are multiple losses in a row.

Traders should also be aware of the margins that many brokers offer for Forex and CFDs. Positions are often automatically closed quickly when needed, the margin is not there. But with severe price fluctuations, it can happen that this automatic closure can occur after a large price jump and thus the trader loses more money than was in his trading account which was set in this case required. There is a new deposit to compensate the negative balance To avoid this risk, the broker can choose deliberately, which clearly separates the obligation to make additional contributions to his GTC.