Have you heard stories of people making it big via online trading? Even before trading became digital, people profited from the financial markets, whether it was forex, stocks or commodities. The online phenomenon gave everyone easier access and the introduction of cryptocurrencies also drew a great deal of attention. Therefore, these markets have seen increased activity, which means the demand for brokers is at an all-time high. Of course, there are downsides to this as well because it has brought in the criminal element. Scam brokers are one of these consequences and Level5x review shows how they can be a problem.
The issue is that none of the brokers you find will ever tell you their flaws; even legitimate brokers may lack something, but they will never tell you. After all, their goal is to find as many clients as possible. So, why would they disclose something that they push them away? With fraudulent brokers, you will end up losing your money and your sensitive information will also be at risk. These concerns often prompt people to quit the idea of online trading altogether. Why deprive yourself of the opportunities? Rather than doing so, you should figure out exactly what makes a brokerage a scam.
This can come in handy when you have to make a decision and enable you to make a wise decision. When you check out Level5x, you will come to know that it offers more than 1,000 trading instruments, a web based platform, generous trading bonuses, a choice of five account options, fund management services and leverage as high as 1:400 to traders in different parts of the globe. The offer seems quite attractive and legitimate at first glance, but it really isn’t.
You have to find out what makes Level5x a scam, so you can avoid it and this is where the following review can be useful:
It is not legitimate
The most prominent reason to not choose a broker would be because it is not legitimate. Why opt for an unregulated, unlicensed and shady company that will put you at risk? There are perfectly good, licensed and regulated companies out there that can provide you excellent trading services. A check of Level5x reveals that it is owned and operated by a company named Vigo and Co LLC, which is based in St. Vincent and the Grenadines.
A registration in this offshore jurisdiction is meaningless because there is no reliable regulatory authority operating there. The forex industry is unregulated, which means anyone can set up a company there and start offering their services without any accountability. Therefore, this makes Level5x very unsafe and you will not be able to reach the true owners of the broker for pursuing legal action, if you need to do so.
It makes false claims
A brokerage that’s lying to you is not one you should trust with your money, or your information. According to Level5x, it is an ECN broker, but when you go through their Terms & Conditions, it identifies Vigo and Co LLC as a ‘market maker’. This is what most brokers are i.e. they act as the counterparty in every trade, yet Level5x does not want to disclose that. Why is this so? This is because they are offering to manage the trading accounts of their clients.
If you check out the ‘Fund Management’ section on the Level5x website, you will discover that they are talking about their team of professionals who will manage your account, diversify your trades and not take any excessive risks in order to help you maximize your profits. Even though this sounds amazing because it means you don’t have to do anything and can benefit from the expertise of others, it is just too good to be true.
As mentioned above, Level5x is really a market maker, which means that they will profit when you lose. Thus, they will never manage your accounts successfully because it will mean losses for them. Quite possibly, they will just mismanage your funds and lead to hefty losses because it will help them profit. This is considered conflict of interest.
It has a malicious bonus policy
One of the attractive offerings of Level5x includes generous trading bonuses and even though they are quite impressive, you shouldn’t be fooled. Why? This is because the broker has a rather malicious bonus policy. Trading bonuses have been banned in multiple regulated markets because they come with strings attached that are usually exploitative and the same applies here. You are asked to meet a minimum trade volume requirement before you can make withdrawals and these are not possible for any trader to achieve. This is just a tactic to gain control of your funds and leave you empty-handed.
It is unclear about minimum deposit
Another issue that you will come across at Level5x is that they are not clear about the minimum deposit that clients are expected to make for beginning their trading journey. At one point, they have stated that you need to deposit $200 and at another, the minimum deposit is said to be $500. Moreover, they are also offering two different set of accounts and they all have different minimum deposit requirements. So, which ones are the real accounts? These discrepancies are a hallmark of scam brokers and you should be on your guard right away. It also has the same discrepancy in case of leverage because even though it claims to be offering 1:400, the maximum leverage is really 1:200.
It has an untested trading platform
Rather than offering their clients any one of the leading trading platforms in the market, such as the MT4, or the MT5, which are known for their exceptional technology and features, Level5x has chosen to offer their own. It is called the Level5x WebTrader, which is largely untested and cannot be considered credible because it is provided by an unregulated broker.
Put all of these problems together and you will know what makes Level5x a scam broker.