[Ghana] Safeguard yourself from falling victim to online trading scams, says INFINOX MD
The rise of the digital age has resulted in an information overload and often a lot of this information is made up of unqualified opinions and regurgitated statements according to Jay Mawji, Managing Director of INFINOX.
INFINOX is an online trading partner which is now available in Africa with the aim of empowering traders to trade Forex, shares, commodities and other financial instruments with ease and confidence.
“As technology has grown, scammers have evolved to take advantage of digital opportunities, and as the number of online traders is expected to continue growing, it is vital for aspiring online traders to safeguard themselves when it comes to trading,” Mawji says.
Mawji explains that many would-be traders are concerned about the security and safety of personal funds and data, and are therefore hesitant to start trading.
“As such, it is vital for potential traders to work with an established, reputable, and regulated broker who will monitor the activities of its clients, partners and stakeholders to make sure they are operating within the regulatory guidelines,” he says. “The implementation of stricter regulations has been a game changer, and regulated firms put their customers first and ensure they are running their companies in a sustainable way.”
Finding the right broker
In order to find the right broker, Mawji says it is crucial to conduct research on the brokerage and the regulations that they abide by, and adds that the best place to do so would be the Securities Commission of The Bahamas (SCB) who keeps an up-to-date register of all firms and their business activities.
Secondly, he explains that traders must recognise the investment risk versus reward, and take into account that it should be a balanced approach between the two, while being aware that if it is too good to be true, it usually is. “Be wary of schemes that are too easy to open an account, too easy to deposit, too easy to trade, and too easy to make money. This is a clear sign of limited regulations and processes,” he says.
It is also important to question that if your investment is too low, how is the brokerage making money? If this is the case there is often more at play that we may initially realise.
Mawji explains that the broker’s physical location also comes into play, citing that although the business is one that is run online, firms that have a physical presence demonstrate a commitment to their business, their teams, and ultimately to their clients. It is for this reason that INFINOX will soon offer clients on-the-ground presence in South Africa - an extension of its London-based headquarters.
Mitigating risks is key
While some traders may still fall victim due to more-elaborate schemes, Mawji does offer valuable advice on how best to mitigate the potential risks.
He says that apart from never dealing with unregulated brokers, traders should take their time when it comes to deciding which broker to partner with, and be familiar with their services. Most importantly, Mawji suggests that aspiring traders ask a friend for advice as they will most often only have your best interests at heart and make you aware of any potential risks they may be aware of.
“There are unethical practices in all industries, and CFD trading is no different, but by having the right monitoring and supervisory policies in place, and by working with regulators, will grant the industry and its traders the peace of mind in knowing that there is no easy way for someone to tarnish the reputation of our industry,” concludes Mawji.
INFINOX is available in African countries including Nambia, Mozambique, Botswana, Tanzania and Ghana.