RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
Deriv is a licensed Forex broker offering the standard trading instruments such as Forex, Stocks and Commodities, but also Binary-like options and Synthetic Indices. The company that operates Deriv is also the owner of the world-famous Binary.com, one of the first binary options providers in the world. You can also use your Binary.com account to access the Deriv trading platforms. Surprisingly, however, they are EU regulated company and at the same time offer leverage of 1:1000 in Europe for some of their products. Find out how they manage to successfully bypass the European FX regulation in the full Deriv review.
Deriv REGULATION AND SAFETY OF FUNDS
Deriv is a broker that holds a variety of licenses in different jurisdictions- Malta, Isle of Man, Vanuatu, BVI, Malaysia and Jersey, which makes them truly a global company. They also operate an LLC in St. Vincent and the Grenadines, which is low regulated financial jurisdiction. The way they use their licenses, however, empowers them to offer investment products and services that are generally prohibited in the EU and UK by ESMA and the local financial authorities respectively. Deriv Investments (Europe) Limited holds a valid Forex broker license (the picture above) that allows them to offer the standard retail FX pairs to trade on leverage of 1:30. At the same time, through separate companies, Deriv holds gambling licenses issued by the Malta Gambling Authority, the UK Gambling Commission and The Gambling Supervision Commission in Isle of Man, which helps them include Synthetic Indices traded on leverage 1:1000 and similar to the binary options derivatives.
The MetaTrader5 accounts, offered by Deriv are fully protected in segregated trading accounts with negative balance protection, also guaranteed of up to 20 000 EUR in compensation, and Deriv explicitly states and proves that it’s true. The Synthetic Indices, Multipliers and Digital options (similar to binary options) accounts are said to be protected by the company, but these are not entitled to compensation by the money protection scheme in Malta!
Your funds are safe if you deposit with Deriv because it’s licensed, authorised and regulated Maltese Forex broker. Still, we do not recommend trading with them because they offer gambling products and services alongside the FX standard pairs, which increases the risks for the clients.
Your Forex broker should be licensed and regulated preferably in the EU (mostly CySEC regulated) or the UK (FCA regulated). Europe succeeded to create a lower-risk environment for retail traders, by imposing stringent rules and regulations towards the entities that want to obtain a license. But most importantly, there are money protection schemes in operation, such as ICF in Cyprus and FSCS in the UK, which further secure the clients’ deposits. Under CySEC (Cyprus) supervision, you can claim up to 20 000 EUR in compensation per client, while in the UK under FCA you are guaranteed of even up to 85 000 GBP per client. Each EU member state is compelled to create and further operate such a fund, which is considered a last resort for the traders, in case a Forex broker faces difficulties to meet its financial obligations.
Deriv TRADING SOFTWARE
Deriv offer MetaTrader5 accounts to its customers; MetaTrader4 accounts are not available for trading. They also provide the customers with three other platforms- Dtrader, Dbot and SmartTrader for Multipliers, Digital options and Synthetic Indices trading, which are significantly riskier and much unsafer gambling products that we do not recommend.
The MetaTrader5 platform comes with EUR/USD spread of 1.5 pips, which is not the lowest possible and maximum leverage of 1:30 for the major FX pairs, which is in line with the regulatory requirements. You’d be better off with a regulated broker that offers a spread of 0.1 to 0.5 because the difference between Buy and Sell constitutes part of the trading costs and directly affects the results you can achieve. Most of the legit Forex brokers offer such a spread, and they are not challenging to find either.
Their Synthetic Indices, however, are also available at 1:1000 leverage in a separate MT5 account, which is insanely high a ratio that shouldn’t be utilised by the traders. As already explained, the so-called instruments are gambling products, and we do not recommend trading these pairs. They include some Boom and Crash Indices, which has nothing to do with the real financial Stock Indices!
The leverage is a powerful financial tool that enables the traders to increase the size of their positions, thus amplifying the potential profits, but it comes at a cost. The risk escalates, and the traders might accumulate massive losses very shortly indeed.
Deriv DEPOSIT/WITHDRAW METHODS AND FEES
The minimum initial deposit is $5 for e-wallets and 10$ for Credit/Cards and Wire Transfers. The industry standard is $100 on average, and our advice is not to start with less, because you will not be able to register any significant profits.
There are loads of funding methods available: Debit/Credit cards, Wire Transfers, Skrill, Neteller, FasaPay, Perfect Money, WebMoney, Qiwi, Paysafe, Jeton, Sticpay and Airtm.
Deriv doesn’t specify a minimum withdrawal amount or withdrawal fees applicable. They will process the request within a day for free, but some charges might incur depending on the country, the bank or the withdrawal method, which are not collected by Deriv. It’s in line with the industry standards, as most of the brokers will not charge you for withdrawals.
An account becomes dormant after 12 months of inactivity and will be charged with $25 every 6 months, which is a bit high compared to the rest of the Forex brokers. However, some of them will not charge you a dime for inactivity. The industry standards are $20 per year on average.
No bonuses or other trading incentives offered. We have to make it clear: the bonuses are not free money, but a leverage tool that further increases the risk for the traders and generally worsens the trading performance.
Deriv is an authorised Forex broker, but also a licensed gambling provider, which somewhat mix both of the products, no matter that the separate derivatives are only available with different accounts. Traders with little or no experience might get enticed to go for the riskier synthetic indices, multipliers or digital options, which are not trading or investment products.
HOW DOES THE SCAM WORK
The scam is a criminal activity, and the scammers are trying to defraud people by making them believe that they can make easy money. In most of the cases, the scammers are hiding behind offshore companies, offshore Forex brokers, trusts and so on, trying to remain anonymous and difficult to trace. There is no or very light FX regulation in the offshore jurisdictions such as Vanuatu, Marshall Islands or St. Vincent and the Grenadines, making them some of the most popular destinations for shady and illegitimate enterprises. Regulation means customer protection and safety, financial authorities such as CySEC or FCA will make it impossible for a scam Forex broker to conduct illicit activities and harm the traders.
WHAT TO DO WHEN SCAMMED
No one is immune to scam, and anyone can fall into the trap. Scammers are always looking for new and different ways to scam consumers. What you need to do first, in case you got scammed, is to protect yourself from further risks. Contact your bank and explain to them your situation, they will give you necessary instructions to follow and will help you, if possible, recover your money.
Report what happened to you, file a complaint, contact the financial regulator, contact other government institutions related to trading and investing. Seek help actively!
It’s also important not to rush blindly trying to recover your funds because many scam recovery agencies and individuals are stalking, aiming to double scam the victims. These will most likely ask for an advanced payment, but will do nothing to help you recover your losses!
Share online your experience; it’s important to protect others, as well. Be responsible!
