Beware! InvestMarkets is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
InvestMarkets if a forex broker trading in forex and CFDs which allows traders to profit from price movement via a contract between client and broker. CFDs involves a lot of risks as it is a highly speculative way of trading where high leverage and spreads that have to be paid to enter and exit positions can make it costly for the trader. The European Securities and Markets Authority (ESMA) has placed restrictions on CFDs and certain types of CFDs are banned in the US. So, is this broker reliable to trade in such a speculative way and can we trust it, we are about to find out.
InvestMarkets Regulation and safety of funds
We find out that InvestMarkets is operated by Arvis Capital Limited, Belize, which happens to be an offshore zone. We checked in the IFSC register and found the name of the company there which confirms its registration. One of the requirements set by IFSC is that in order to be licensed, forex brokers must provide $500,000 deposited in a bank in Belize. This high amount serves as a wall against scammers which is on the positive side. However, on the negative side, brokers from offshore zones do not contribute to compensation funds which means that if the broker goes bankrupt, the traders’ funds will be gone.
If you are looking for reliable and licensed brokers, we suggest that you research some of the forex brokers from the well-established jurisdictions of Australia, the US, the UK or the EU. In our opinion, the brokers from the jurisdictions of the UK and the EU offer the best conditions. First of all, to be licensed there, brokers must have an initial capital of no less than 730,000 EUR which among other things serves as a preventive measure against scammers. You can’t imagine scammers investing so much money in an attempt to look legit, do you? In addition to that, forex brokers regulated by CySec must contribute to a compensation fund from which, in case of bankruptcy, clients will be compensated up to 20,000 EUR per person. If, on the other hand, the broker is regulated by the FCA and contributes to the local Financial Services Compensation Scheme, then its clients will be compensated up to 85,000 GBP per person if the broker becomes insolvent.
InvestMarkets Trading software
Due to some broken links in the system, it was not possible to open an account the ‘normal’ way with registration, etc. However, when we clicked on the trading button, it took us to this web trader. As we mentioned above, the website offers trading in CFDs and this trader reflects exactly that (screenshot below). On the left, you see the forex currencies with their bid/ask price, next to them, you see a box with information about the currency pairs that is displayed in the chart. The box contains the trading volume, bid and ask price and also close at loss or close at profit options. In addition to that, we can see the spread for the currency pair EUR/USD which happens to be 0.3 pips, a rather low spread compared to 1.5 pips for the industry average. However, if you look in the image with the accounts information, you can see that for the same currency pair, the spread can go as high as 2.5 pips which is high and won’t allow traders to make a sustainable profit and will increase the cost of trading. If you remember, we mentioned that in CFDs transactions, the trader pays the cost of the spread to enter and exit the position.
On the far right side, as we mentioned is the chart with the price fluctuation of the same currency pair. We found out in the account types information, that the leverage offered for all accounts is 1:500. As we mentioned already, high leverage is typical for trading in CFDs. It exposes the trader to high risk of losing its funds if the transactions end in loss which is typical for 70% of the forex transactions. In the EU and the US, there is a cap on leverage to protect traders from experiencing heavy losses. Please compare the leverage that cannot exceed 1:30 in the EU and 1:50 in the US with the leverage offered by InvestMarkets. Please do not get tempted by high leverage and avoid brokers offering such highly speculative leverage.
Although on the company’s website it shows that this broker offers also the MetaTrader 4 trading platform, we were not able to confirm due to the broken links in the system. However, we want to mention that although considered quite ‘ancient’ due to its 15 years of age, the MT4 is still going very strong and is choice number one among around 80% of the brokers. This is largely due to its excellent package of charting options that contain technical analysis indicators to choose from, such as the Bollinger Bands, Fibonacci retracement, moving averages, etc., that help traders predict the future direction of exchange rates and make a profit. In addition to that, the MT4 offers an auto trading option, an app market, a code base with customs scripts, trading signals, VPS, etc.
However, at the end of the day, what matters most is not the platform but whether the forex broker is licensed and reliable.
InvestMarkets Deposit/Withdrawal methods and fees
To its clients, InvestMarkets offers 4 different account types – Basic, Gold, Platinum and VIP. The minimum initial deposit for the Basic account is $250. The other accounts start at $25,000, $100,000 and $250,000 respectively. We saw on the company’s interface the payment methods to be VISA and MasterCard which does not provide many options to the clients.
While perusing the company’s legal information, we noticed that the withdrawal methods are credit card, wire transfer, eWallets, Neteller, PerfectMoney and Skrill. However, we also noticed that the withdrawal fees are rather high – 3.5% for credit cards, 30 EUR/USD/GBP for a wire transfer, 3.5% for Neteller and 2% for PerfectMoney and Skrill. In addition to that, as per the Terms and Conditions document, the company reserves the right to charge a withdrawal fee of 80 EUR in some special circumstances.
As per the company’s policy, trading accounts that stay inactive for 2 months will be charged 80 EUR fee. After that, up to the 6th month of inactivity, the fee will increase to 120 EUR, 500 EUR will be the fee for an inactive account between its 6th and 12th month and for over 12 months, the fee will be 1,000 EUR and if the client wants to re-activate his/her account, then the fee for reactivation will be 2,000 EUR. We call this demands ‘over the top’ and frankly, cannot imagine someone paying so much money in fees!
This broker also offers bonuses that are attached to difficult to fulfil requirements. Should you decide to accept a bonus, which we really do not recommend, please make sure to read carefully the conditions of the bonus policy. One of the requirements for accepting a bonus from this broker is to trade 0.2 lots ($20,000) for $1 received. This is not that easily done! Also, please remember that licensed brokers do not offer any bonuses, free gifts or incentives.
How does scam work?
Actually, it’s quite simple and people often fall into the trap of experienced scammers. We bet you have seen those attractive ads on the Internet promising big and quick profits over a short period of time. Just provide your personal information, and voila! The scam brokers are waiting for you and you will be inundated with phone calls promising easy profit. Tempting, right? You think ‘ok, I can spend $200-300 and see what profit it brings me’. Congratulations, you just provided a fat commission for your scammers that will be distributed down the food chain. Now you have ‘graduated’ to be handed over to a senior ‘broker’, a smooth talker who will try to convince you that there is no more perfect time like now to invest more money. After all, you want to make more profit, right? However, something starts to feel off and now you start asking yourself questions and all you want is to withdraw your money and get out fast.
Unfortunately, it is too late! Someone has pulled the cheese and you are trapped because scammers don’t give up easily. Scammers will do anything in order to delay you so that you miss the deadline for a chargeback.
What to do if scammed?
Our advice is to immediately file for a chargeback if you have been lucky enough to make your deposit via credit card. VISA and MasterCard allow for 540 days chargeback period, so you still have a chance to get your money back.
Things don’t look so good if your currency of choice has been Bitcoin or bank wire. In that case, you may have to wave your money goodbye.
There are some other things that you can do in case of being scammed – cancel your credit card if you have given your CVV code to the scammers. Also, erase any software from your computer that gives scammers access to your private data.
Be warned, as well, that some so-called ‘recovery agents’ may approach you promising to recover your funds for a fee. It could be another form of scam where scammers prey on your misfortune. Should you choose to use one, you must make sure that you are dealing with a genuine and legitimate agency by checking their credential and company’s information and transparency.