To open a margin trading account is not an inconsequential act. After filling the forms, you will be very quickly allowed to transfer your first deposit on your broker’s bank account. Then will follow several questions.
Are my funds segregated or is my broker allowed to use them ? Am I protected against a potential bankruptcy of my broker ? Is the custodian a top tier bank ?
Some offshore companies simply disappear with their clients deposits. Some investors have lost everything and it could have been you.
So to make sure you are safe from that kind of scams where it almost impossible to get any compensation, the first thing to do is to check if your broker is properly regulated.
In European Union, it has to be MiFID compliant which means either licensed in your home country or at least allowed to provide investments services through an European passport.
If any regulators find a company which offers financial services without being registered, they generally add it in their black list.
To know more about online trading scams and to check if your broker is registered in your home country, visit your local regulator’s website.