Many factors come into play when choosing a reliable broker to start your trading journey.
For someone with limited experience in the markets, this choice can be very confusing, and the priorities are hard to define.
However, traders have their own trove of practical knowledge, and tapping into it can shed light on brokers’ red flags.
As part of its global research, global broker Octa surveyed hundreds of Nigerian CFD traders to determine what warning signs make them avoid financial brokers.
Advertisements always show only one side of the coin, regardless of what is advertised. The drawbacks, on the other hand, often become known the hard way in practice. Everyone has had negative experiences with certain products or services and will never choose them again.
This is especially true of e-brokerage services, where the entire trader’s journey depends on the broker and the trading platform. Any misstep on the part of the broker can be detrimental not only to the client’s experience but also to their funds. So, what are the most common red flags in brokers, according to Nigerian traders?
The signs of unreliability
When asked what signs are most indicative of a broker’s unreliability, survey participants named the following red flags:
- chart manipulations (58%)
- price slippage and non-execution of orders without any visible underlying market reason (35%)
- the broker’s quotes significantly differ from the quotes of other brokers (33%)
- slow deposit or withdrawal transactions (20%).
This shows that trading in a predictable and fair environment is a major factor determining Nigerian traders’ willingness to trade with a certain broker. As things stand, it is the broker’s responsibility to provide full transparency and adequate proof of value to its clients.
As a trusted and highly experienced broker, Octa works with independent, third-party liquidity providers to offer non-distorted market prices to its clients. In turn, liquidity providers aggregate prices using data from multiple sources, including banks and large financial institutions. As a result, chart prices are beyond the broker’s control.
Octa also provides access to historical chart data so that traders can verify that the broker’s prices align with actual market conditions and that there were no chart manipulations or price slippages at any given time.
Fair commissions and fast withdrawals are top priorities
When asked what broker’s flaw is the major deal-breaker, Nigerian traders’ highlighted three main factors:
- high spreads and hidden commissions (32%)
- non-transparent commission model for deposits and withdrawals (25%)
- slow deposits or withdrawals (18%).
It is safe to say that withdrawal-related issues come to the fore for Nigerian traders when considering brokers’ red flags. This is further substantiated by the fact that 50% of survey participants said they would stop working with a broker in case of unjustified delays in or blocking of withdrawal transactions.
At the end of the day, the only way to make sure your broker is trustworthy is by trying it out yourself. For example, Octa addresses this concern by offering a highly efficient and fast withdrawal procedure that helps traders establish a long and trusting relationship with the broker and focus on trading instead of background factors.
Whom to trust?
The difficulties in choosing a reliable source of insights and updates are a well-known issue in the trading community. The spreading of misinformation and the proliferation of online experts with questionable credentials can cause a lot of confusion, especially among less experienced traders.
When asked what signs indicate that a source of information can be fraudulent, 61% of respondents highlighted aggressive advertising. The most popular answers also include:
- promotion of scam investment projects (35%)
- trading signals manipulations (35%)
- lack of online reviews (27%)
- unconvincing success stories (24%).
This distribution of answers in Octa’s survey allows a glimpse at the variety of tactics used to attract traders’ attention. Given that, a platform with expert-curated ideas can be seen as a great solution in terms of reliability. Octa offers its proprietary platform, OctaTrader, which features a built-in customisable feed of trading insights in real-time, allowing traders to reduce cognitive load and make their decision-making more efficient and precise.
Safety remains in the limelight
Various kinds of fraud come across as significant issues for many Nigerian traders. When asked about fraud in trading education and mentoring, 23% of respondents professed to know traders who were scammed by fake educators, coaches, and mentors. What’s more, 20% have paid for false trading signals, and 16% encountered situations when scammers tried to talk them into a Ponzi scheme.
These results reflect a medium-to-high dependency on up-to-date security measures and tools on the part of a broker. The modern cyber threat landscape is very complex, and keeping track of the best international practices is a must for any client-oriented broker. It is only natural that global brokers have a competitive edge in that respect. Their extensive reach allows them to absorb and integrate the most advanced security practices and tools from various regions, offering their clients the most efficient solutions.
Conclusion
According to Octa’s survey, Nigerian CFD traders tend to view the ease and speed of withdrawals as a direct indicator of a broker’s trustworthiness and reliability. A fast, hassle-free withdrawal process allows traders to feel more in control of their financial decisions, ensuring they can access their profits or capital when needed.
The research also established that Nigerian traders prefer to work with brokers that provide a sense of security and transparency. They look for clear, predictable, and honest procedures that avoid hidden fees or complex withdrawal conditions, which can help establish long-term relationships with brokers based on mutual respect and clarity.
Disclaimer: Trading involves risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before making an investment decision.
Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
Since its foundation, Octa has also won more than 100 awards, including the ‘Best Trading Conditions Africa 2024’ award from Finance Magnates, the ‘Best Customer Support Nigeria 2023’ award from Global Brands Magazine, and the ‘Best Forex Broker Nigeria 2022’ award from Global Banking And Finance Review.