Free Online Trading
Free online trading and other trading scams
Free online trading is a popular phrase these days. All over the Internet there are sites that promise free trading and high profits. Unfortunately, there are few things in life that are ever really free and online trading is no exception.
There are ways to trade for free. Just log on to the website of a leading online trading company and click on the box titled free trading. This will give you access to software that will enable you to trade the markets using a virtual trading account. That's right - a virtual demo account! This means that you will be able to trade without paying a cent, but at the same time you will not make a cent. While virtual accounts are a wonderful way to get the hang of online trading initially, at the end of the day most people who trade online do so with the aim in mind of making money. The bottom line is that free online trading can aid you in learning about the markets but cannot make you any money.
Another thing to look out for is companies that offer commission free online trading. While their motives may initially appear gallant, the truth of the matter is that no company can remain afloat without making a profit. They may offer 0% commission, but the chances are very good that there will be other hidden costs involved such as an exorbitant monthly fee for using their trading software. Alternatively, the free commission may only apply if you make a certain amount of deals every month without fail. Read the terms and conditions very carefully and do not hesitate to give brokers a call should you have any questions. Honest companies will have no problem explaining their policies to you in great detail, while fraudulent individuals are likely to be more tight lipped.
Promises of free trading are not the only trading scams that are popping up on the Internet. Sadly, there are a number of dishonest companies out there who make their profits by exploiting the naivety of less knowledgeable individuals all over the world. There are hundreds of online stock trading scams floating around. Some can be spotted from a mile off, while others are slightly more difficult to identify. Some of the more common Internet trading schemes include:
- Hype and dump stocks
- Pyramid schemes
- Spam stock offers
- Ponzi scams
The simplest and most effective way to avoid getting roped in by a scam is to always keep in mind the old saying: when something looks too good to be true, it probably is. Any promises that you will make instant profits, suffer no losses and encounter no risks when buying a particular stock are more than likely a lie. Research independent companies carefully and always double check offers that you think may be suspicious. Look for trading companies that have been approved by registered bodies such as the Securities and Exchange Commission (SEC).
In the event that you do fall prey to a free online trading scam or other type of unscrupulous trading scheme, your best option is to report the culprit to the Securities Exchange Commission. Their complaints division can be accessed online at http://www.sec.gov/complaint.shtml . They will investigate the company or individual in question and take the necessary steps to ensure that they are stopped.