Signing up with a broker is the first step towards online trading. Brokers have been a part of the financial markets ever since the concept of trading was introduced, and this has not changed with the advent of the internet. They are the ones who grant you access to trading instruments, the platform, and other necessary tools, and they also influence your profitability. This makes the selection of a brokerage firm crucial. As you will discover in this Neotrades.com review, not all brokerages are what they appear to be.
The internet is notorious for being a breeding ground for fraud, and it has since extended to the financial markets. It should not come as a surprise, given the large amounts of money involved and the large number of traders, who represent a large population of potential victims for con artists.
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Therefore, when searching for a brokerage, you should be vigilant and thoroughly examine their offerings to determine whether they are genuine or not. It may seem like a lot of work, but it will pay off in the long run if you are able to avoid scams and choose a professional and trustworthy brokerage for your needs. It works in the case of Neotrades, which exudes a positive aura because it resembles a trustworthy brokerage.
Neotrades Review
It purports to have been operating in the European Union for over 17 years and is governed by multiple jurisdictions. According to Neotrades.com's website, the company offers its services in more than 170 countries and assures extremely low spreads. All of this will attract your attention, but you must be cautious because nothing is as it seems. In fact, if you take the time to investigate Neotrades's offerings, you will discover the telltale signs of a fraud. What exactly are they? Let's review them.
An Unregulated Enterprise
Licensing and regulation are the most essential characteristics of a brokerage because they demonstrate the company's reliability. Brokers are only granted a license if they meet specific requirements, which helps establish their credibility. As stated previously, Neotrades presents itself as a multi-regulated EU broker, which should impress anyone given that the European Union is one of the most heavily regulated regions in the world.
The issue is that Neotrades does not specify which EU member states regulate it. Given its name, you might presume it is regulated in Switzerland, but the brokerage is not listed in the online register of the Swiss Financial market Supervisory Authority (FINMA). In addition, you can examine the Cyprus Securities and Exchange Commission (CySEC), which is the leading EU regulator, but Neotrades is not regulated by the body.
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In addition, if you examine Neotrades' leverage, you will discover that it violates the regulatory framework pertinent to brokerages in the EU. This is conclusive evidence of a fraud, as it demonstrates that the company is not regulated and is lying about it. Where is the actual registration? The answer can be found in the legal documents of the brokerage, in which its location in Saint Vincent and the Grenadines is disclosed.
Saint Vincent and the Grenadines is an offshore jurisdiction notorious for being a fraud refuge, so this does nothing to assuage your concerns. The country's authorities do not regulate the foreign exchange industry, so anyone can establish up a company there and do whatever they want, just like Neotrades. A legitimate brokerage would always be licensed by a reputable regulatory body, which is not the case here.
No trading system
Regarding Neotrades' trading platform, you will encounter the second red flag for fraud. This is a crucial aspect of any online broker, as it must be utilized to conduct actual trading. You are promised WebTrader and MT4, two of the most popular trading platforms on the market. However, it is common for fraud brokers to make false promises, and the same is occurring here.
Neotrades does not offer a demo account, so it is impossible to test and corroborate the trading platform. There is only a dashboard and nothing else, indicating that it is merely a lure to attract visitors.
Strong leverage
The leverage ratios that a broker promises determine your flexibility, and Neotrades claims to offer leverage ratios ranging from 1:100 to 1:1000. Certainly, you will be impressed by such high ratios because they indicate that you can make very large investments and enjoy high returns, but leverage is a double-edged sword that can also magnify your losses.
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Therefore, regulatory bodies establish a limit on the amount of leverage that can be offered, and EU brokerages are subject to the same restrictions. They are not permitted to offer leverage greater than 1:30, but despite claiming to be based in the EU, Neotrades offers high leverage ratios. This is additional proof that you are interacting with a fraud.
High minimum deposit
A minimum deposit is required to establish an account with any broker, and Neotrades is no exception. The issue, however, is the vast disparity between the quantity they are requesting and the norm. Even for the most basic account at Neotrades.com, a minimum deposit of EUR 10,000 is required, which is an exceedingly high amount.
The typical minimum deposit is $250, but most brokers now offer micro accounts for as little as $10. This is another telltale sign of a hoax, as fraudulent platforms typically require a larger initial deposit.
Using Enticing Bonuses to Capture Customers
In the accounts information section of its website, NeoTrade indicates that each account type is eligible for an incentive. The incentive percentages range from 25% for the standard account to 100% for the VIP account. Although this may sound enticing, bonuses are never favors. They are always accompanied by stringent requirements, which the consumer must meet in order to receive the bonus amount.
In the case of NeoTrade, a minimum trade volume is required to receive the incentive. The customer must execute a minimal trading volume equal to 25 times the sum of the deposit and bonus. In addition, these incentives corrupt the trader's account and render withdrawal requests inadmissible.
Consequently, these bonuses are a ploy to entice more customers. NeoTrade, with the aid of a notorious clause, has tied all incentives to trading volume requirements that even the most experienced trader will struggle to meet, preventing customers from withdrawing a single cent. Regulated brokers never offer incentives or gifts of this nature, as this is a common scammer practice.
Last Word
All of these indicators indicate that Neotrades is a fraudulent brokerage that you should avoid in favor of a reputable firm.
NeoTrade asserts that its clients have the opportunity to profit on the foreign exchange market. They provide a variety of account types, attractive spreads and leverage levels, the most potent and well-known MT4 platform, as well as numerous other advantages. NeoTrade lacks what is most essential for a forex broker — a legitimate license — despite the fact that the company's website is extremely appealing.
NeoTrade is an unregulated, fraudulent broker situated in a Dominican Republic offshore zone. It implies that consumers trading with Neo trade will be exposed to a variety of financial risks. Therefore, if you choose this broker for trading activities and this broker abruptly closes its website or declares bankruptcy, you will lose all of your money.
Therefore, it is preferable to choose a legitimate, accredited, and trustworthy broker who is licensed and regulated by reputable regulatory authorities, such as the FCA in the United Kingdom and CySEC in Cyprus. Only in this manner will your money be in safe hands.
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