Discovery FX Review – 5 things you should know about Discovery-forex.com

Discovery FX Review – 5 things you should know about Discovery-forex.com

Beware! Discovery FX is an offshore broker! Your investment may be at risk.

Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.

 

Discovery FX is a Forex brokerage registered in Samoa. It provides the MT4 trading platform and a wide range of trading products. We could see a generous leverage of up to 1:1000 and the required minimum deposit is also quite low at $200 and very favorable for traders.

Discovery FX regulation & safety of funds

We read on the website of the brokerage that it is supposedly operating out of Samoa and is owned by the company registered with the name Discovery FX Limited. We underline the fact that Forex trading has not been integrated into the regulatory framework of the country which posits much regulatory uncertainty for Forex trading  and potential clients of the brokerage are not guaranteed security and transparency as with brokers under the oversight of respectable European financial watchdogs. However, this does not bar many EU-regulated brokers from doing business in the region. However, it is beyond doubt this brokerage is unregulated and we can safely conclude that traders will be exposed to much unwanted risk.

Traders needn’t have to worry themselves with such risk if they choose to trade with a brokerage regulated and authorized by a prestigious regulatory agency. Such agencies are the FCA in the UK or CySec in Cyprus which have been leading names in Forex trading for some time now. Their regulatory framework is composed of a number of strict rules which prevent clients from falling victims to fraud. Such rules include the segregation of accounts which assures that commingling with the client’s money is not possible. Furthermore, a license by such a regulatory body entails participation in a financial mechanism by which clients may be compensated if they suffer losses due to fraud or bankruptcy. With the FCA the compensation is up to 85 000 pounds, where as with CySEC it is up to 20 000 euro per person.

Discovery FX trading software

Putting that aside, the brokerage states that it provides the MetaTrader 4 trading platform which is something we highly appreciate since a multi-functional software such as the MT4 is certainly always an advantage for traders. However, there are a couple of problems worth pointing out. First of, even though we see there are CFDS on stocks, indices, precious metals, energy, and cryptocurrency pairs we cannot be sure, having in mind the corporate uncertainty we pointed out above, that such a diverse portfolio is in fact offered to live accounts. Furthermore, we were not able to register for a demo account and thus could not discern what the available spread is. However, we do condone the broker for requiring the relatively low sum of $200 for starting a real-money account. We do learn that the leverage extended to traders is 1:1000 which doesn’t do much as info when all the rest is missing.

Discovery FX deposit/withdrawal methods and fees

We find no information regarding the available payment methods for clients which should strike us a surprise since the brokerage is clearly anonymous. Usually, in Forex trading potential clients of a brokerage may deposit or withdraw only via the standard Visa and MasterCard, as well as bank wire.

Interestingly enough, we read nowhere anything regarding withdrawal fees, however, this does not mean that the brokerage might charge some unexpected fees. This is why we always advise traders to put up only the required minimum deposit, instead of risking a bigger amount with no certainty. Afterwards, they may also try to withdraw a small amount in order to check for any unexpected fees or delays. Such fees and delays are usually the signs of a scammer.

How does the scam work?

Unfortunately, the possibility of a scam looms over almost every trade in forex, especially if you are dealing with an unregulated brokerage. That is why we believe traders should be acquainted with the methods of a scam. Here is how it would typically go about:

Through clicking an ad with promises for fast money, you will be redirected to a website such as  Bitcoin Evolution or Crypto Cash where registration will require you to give your address, email and phone number. After sharing your personal information, you will being receiving calls from brokers, compelling you to invest with them and win big. After a few minutes hearing their pitches, you decide to deposit some $200-250. And just like that – the scammers take a fat commission from this initial deposit.

After they are done with you, senior scammers begin working you into putting even more money. They say it’s the only way to profit from trading even more. After making the mistake of investing even further, you’ll begin wanting to get out of this and withdraw what you have left.

Unfortunately, the con-artists have no such thing in mind. They will now begin persuading you to wait it out and not withdraw right now. The motive here is quite straightforward – traders have a limited time window for filing a chargeback with their bank and get their money back. The “recovery department” will simply want to mislead you into missing this crucial period and, along the way, losing any chance you might have of getting the money back.

What to do when scammed?

As was mentioned above, scamming is quite the common in the trading world and, sadly, even you might suffer from it. In such an unfortunate case there still may be some available options for you.

You may contact your bank or credit card provider and file a chargeback. Furthermore, due to the high instances of fraud – both Visa and MasterCard have decided to sidestep scammers as best they can in Forex trading. The first thing we have seen so far is that MasterCard has increased the previous time period of six months for filing a chargeback to a year and a half.

If, however, you have provided the broker with your credit card details, immediately cancel your credit card.

If you have given information regarding your online banking pass – you should switch it asap!

Beware of potential calls from self-described “recovery agencies”! They prey on scammed and vulnerable traders who are desperate to recover their losses. They will require an “up-front” payment to help you, but after paying them, no such help will be coming your way!

Top Forex Brokers

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1 Comment

  1. The same crooks starting up yet another scam to steal your money.If you invested with them tell your bank straight away.

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