Beware! RedRock500 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.
RedRock500 is a Forex broker with a sleek red-ish website we found pleasant to look at. But that’s the only positive thing we can say about this broker. It’s an anonymous entity that doesn’t even elaborate to give an address, let alone legitimacy proofs. At the same time, they are really loud proclaiming themselves as “the most secure trading environment in the industry”. On the other hand, while researching we came across loads of positive reviews and publications praising this broker, which doesn’t seem genuine actually! There are other annoying facts about this broker, as well, which we are going to share with you in the full RedRock500 review.
RedRock500 REGULATION AND SAFETY OF FUNDS
RedRock500 is a totally obscure an FX creature, which doesn’t even give an address or a contact number to the public. We were only able to unearth that the Estonian governing laws apply to their business conduct. Still, it doesn’t mean anything because we found nothing about RedRock500 in the Estonian financial regulator- FI. Your funds are not safe if you make a deposit with RedRock500 because it’s an unlicensed and unregulated anonymous Forex broker, which operates illegally on regulated markets.
Avoid RedRock500 and trade with the legit EU(mostly CySEC regulated) and UK(FCA regulated) companies. Europe is a safe financial environment for the traders’ funds which puts the customer protection on top of its priority list. The best Forex brokers in the world hold European licenses, so there is plenty of choices. Most importantly, the traders are protected by the European deposit insurance funds. Under CySEC(Cyprus) supervision, you can claim up to 20 000 EUR per client in compensation, 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 similar insurance funds, which are considered to be the last resort for the traders, in case a Forex broker faces difficulties to meet its financial obligations.
RedRock500 TRADING SOFTWARE
Warning! RedRock500 provides the traders only with a web-based trading platform. The platforms brokers create by themselves are unstable and untrustworthy, also lacking in functionality and certainly out of Metatrader’s league. Beware, these platforms are considered prone to fraud and price manipulation, so we do not recommend brokers that only provide with proprietary web-based software.
Avoid RedRock500 and go for the MetaTrader4 and MetaTrader5 brokers because MT is the best retail Forex trading software in the world, and it’s free to use. It’s stable and reliable but also includes sophisticated trading tools such as Expert Advisors (EA), Algorithmic trading, Complex indicators and even a marketplace where the traders can buy or use for free a variety of third-party-developed solutions.
The EUR/USD spread is quite favourable- 0.2 pips, but as already explained, RedRock500 is a broker to avoid, so do not even consider opening an account. The spread is the price to open a position, so the lower Buy/Sell difference benefits the clients, making it more affordable to trade. Look for tight-spreads brokers, but regulated ones, it’s a must!
RedRock500 claims to offer a leverage of 1:1000. Such a ratio can destroy the trader’s account literally in seconds because the margin call level would be no more than 10 pips away from the opening price. A tiny move in the opposite direction would instantly trigger a margin call causing losses that are difficult to recover. It might as well bring the balance to minus because an illegal broker such as RedRock500 is not obliged to provide Negative Balance Protection for the customers, no matter the fact that they claim the opposite.
There is a leverage cap of 1:30 imposed on the markets in EU, UK and Australia (from 2021) as a customer protection measure. Canada and the US agreed on 1:50, so brokers offering higher ratios are not recommended to trade with due to the lack of sufficient regulation and customer protection. The Swiss brokers are an exception as there isn’t leverage restriction imposed, but Switzerland has its own way to protect the clients- a license there cost 20 mln. Swiss Francs (some $22.6 mln. at the time).
RedRock500 DEPOSIT/WITHDRAW METHODS AND FEES
The minimum deposit with RedRock500 is $250, which is in line with the offshore brokers, but at least two times higher if compared to the regulated companies- $100 on average to start trading. The funding methods are said to be Credit/Debit cards, Wire Transfers and Skrill, but we cannot confirm their statement as valid. Traders should know that Wire payments are final and non-refundable. Bank cards, however, allow to chargeback within 540 days from the money transfer and it’s the safest funding method so far.
The minimum withdrawal amount is $100 for bank cards and $250 for Wire Transfers. The withdrawal request is said to be processed within 2-5 days, which is longer than the regulated brokers’ practice- 48 hours on average.
The withdrawal fees deserve a whole chapter! Bank card withdrawals will be charged with $25 plus a $10 processing fee, while a transaction fee of $50 will apply for Wires. Also, the traders have to execute more than 200 in turnover if they want to evade an additional fee of 10% from the withdrawal amount. It’s an unfair clause that’s totally unacceptable. Now compare: most of the regulated brokers do not restrict the traders to the amount they can pull out and do not impose fees. It’s obvious that RedRock500 makes money by plundering the clients’ accounts!
An account becomes dormant after 6 months of inactivity and will be subject to a deduction of 10% monthly, which is yet another unbearable fee to accept. The regulated brokers charge the dormant accounts with 5 to 10 dollars at most, so it’s a solid argument alone to trade with regulated companies.
No bonuses at the moment but trading incentives are possible in general. When traders accept a bonus from RedRock500 a minimum trading volume of 30 times the amount of the deposit plus the deposit applies to become eligible for withdrawal. It’s an unfair clause making it impossible to withdraw as the bonus bounds with the deposit. The trader has to trade on 24 hrs a day, 7 days in a week to meet the requirements and withdraw some profits. Fairly speaking is such a requirement is impossible to meet, so do not accept a bonus if offered.
Overall, RedRock500 is a shady entity offering risky trading conditions and at the same time imposing unbearable fees, making it a costly broker to trade with. They also provide with a poor web-based trading platform, and it’s an argument enough to stay safe and avoid RedRock500.
HOW DOES THE SCAM WORK
A group of scammers usually operates many scam brokers, scam websites and call centres. Sometimes they simply rely on the quantity; they create many websites waiting for traders and investors with little or no experience to bite. Nowadays, it’s very cheap to create one, and it looks like a profitable strategy, as they carry on doing it.
Internet and social media are bustling with scammers. They approach people on Facebook, Instagram, Telegram; you name it. Pages showing lush lifestyle, cars, yachts, celebrities etc. lure people all over the Internet. Often the scammers will give free advice or a tryout, and before you know it, they will be asking for a deposit. You also see pictures of trading accounts displaying huge profits or Bitcoin earnings, and if you have no FX experience, you might easily believe in your eyes. The scammers also post tons of positive comments and reviews about their phony brokers all over the Internet, so you should be cautious and always looking for more information before sending any money to a broker.
Anonymous offshore companies stand behind many fraudulent brokers. Jurisdictions such as the Marshall Islands, the Commonwealth of Dominica or St. Vincent and the Grenadines fail to adequately regulate their financial sectors and the three mentioned do not even issue Forex broker licenses. It makes it easy for scammers to quickly incorporate companies there and begin to unlawfully sell Forex products and services on regulated markets such as the Europen, American or Australian ones. Lack of regulation equals lack of customer protection and safety, so even if the broker is not ill-intentioned, the traders remain vulnerable. That’s why you should always avoid offshore brokers, no matter the promises they make.
WHAT TO DO WHEN SCAMMED
Unfortunately, no one is immune to scam. 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, call the police if you feel necessary. Seek help actively!
It’s crucial not to rush blindly trying to recover your funds because many scam recovery agencies and individuals are stalking, aiming to double scam the victims. They ask for an advanced payment, but do nothing to help you recover your losses and simply pocket the money you’ve sent!
Share online your experience; it’s important to protect others, as well. Be responsible!