Whether you are new to the commodity broker world or have been trading for a while, it is important to understand the risks that are involved. Some of the risks that you can run into include slippage, excessive withdrawal fees, and long hold times. You should learn how to recognize these risks in order to avoid getting cheated.
Negative slippage
Using limit orders can help to minimize the risk of negative slippage. Limit orders allow you to cap your price at a predetermined price. They also can help to reduce slippage by ensuring that your trades are filled at that price. However, limit orders do carry the inherent risk that they may not be filled.
Slippage occurs when an order is executed at a price that is less than the expected price. This can happen when the market price changes rapidly, or if the market maker’s bid/ask spread changes abruptly.
Slippage can occur with any type of order, but it is most common when market orders are used. This is especially true when the market is highly volatile. To minimize slippage, try to avoid trading during volatile periods. Similarly, try to avoid trading in low-liquidity markets.
Slippage is generally calculated as a percentage of the price bar range. To calculate, you take the difference between two price points and divide the numerical slippage by the expected entry price.
Enticing signup bonuses
Whether you are planning to trade forex, stocks, or binary options, you should recognize commodity broker scams and enticing signup bonuses. These fraudsters convince you to deposit money with them in exchange for unrealistic returns. You are then told that you can get tens of thousands of dollars within a short period of time. However, when you stop paying, the fraudsters disappear.
The unregistered brokers are operating on social media, messaging apps, and forex programs. You may be asked to provide payment information on their website, or to make a deposit directly into their wallet. They may even accept cryptocurrencies, including bitcoin, as well as other digital assets. In fact, if you want to avoid these scams, you should always avoid brokers that do not have any reviews.
When searching for brokers, you should avoid any broker that advertises expensive cars or other luxury items. A good firm will be able to entice you with quality products and attractive promotions for new traders.