Beware! FXParamount 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.
FXParamount is a broker that offers trading in Forex, Stocks, Indices, Precious Metals and Energy. They advertise 3 types of accounts – Standard, Classic and Paramount Pro – differing in terms of the minimum deposit required and the leverage offered.
To register for a Live account we had to complete a form asking for our First and Last Names, Email address, Phone number and Country. The registration was successful and we received an email confirmation with our personal account details in it – not the best practice in terms of privacy and security, as an email communication can be intercepted.
The trading area we accessed with these credentials was plain, without many features. There was the option to open a Demo account, which we decided to explore further.
FXParamount Regulation and safety of funds
FXParamount has a Dubai, UAE address and phone number on its webpage. Forex brokers there need to be regulated by the Central Bank of the United Arab Emirates (CBUAE). In order to be licensed by the Bank, the broker should either be a UAE citizen in the case of natural persons or the national shareholding should not be less than 60% of total paid-up capital in the case of companies. There is also a minimum capital requirement of one million dirham ($275 000).
This brokerage, however, is not regulated by the UAE Central Bank or any other respected financial authority, which significantly lowers its credibility. If you are considering investing in Forex trading we would suggest finding a broker licensed by an established regulatory organization, such as the Financial Conduct Authority (FCA) in the UK, the Cyprus Securities and Exchange Commission (CySEC) or the Australian Securities and Investment Commission (ASIC).
These watchdog agencies impose very strict rules on their licensees. The Minimum Capital Requirements for brokers regulated by the FCA or CySEC are €730 000, while in Australia they are AUD 1 million. European brokers also have to participate in Compensation Schemes that provide additional guarantees to investors’ funds in case the broker goes bankrupt – up to 85,000 GBP in the UK and 20,000 EUR in the EU. In addition, regulated brokers must keep their clients’ money in segregated accounts – separate from their own operating funds, whereas the Negative Balance Protection policy ensures that the traders may not lose more than the total sum deposited, in this way effectively preventing indebted accounts.
FXParamount is not a regulated broker, so they are not bound by these rules and policies. Any claims regarding the good trading conditions and tight spreads they offer or the safety of clients’ funds are not guaranteed by any regulatory agency, so we would warn our readers that there might be a risk to their money if invested with this broker.
FXParamount Trading Software
The broker offers the MetaTrader 4 (MT4) trading platform as a Desktop and Mobile (iOS and Android) application. MT4 is the world’s number one platform, preferred by over 80% of users. It offers an intuitive and user-friendly interface, advanced charting and analysis tools, as well as copy and auto-trade options. It can be further customized to create different trading strategies using its proprietary MQL4 programming language.
In the MT4 screenshot above we see a spread of 1.7 pips for the EURUSD currency pair. This is not very large for a beginner’s account, and to be fair, it is in line with what the broker promotes on their website.
In order to attract Muslim investors, after all the broker operates in the Middle East, FXParamount’s less expensive accounts are swap-free, meaning investors can keep an open position overnight without paying interest. This is done to comply with Sharia law which does not allow Muslims to pay interest; that’s why they are called Islamic, or swap-free, accounts.
The leverage advertised – up to 1:1000 – is very big, however. Trading on leverage that big entails significant risks to inexperienced traders. Of course one can make big profits with leveraged trading, but in the event that you lose, your losses will be multiplied, and it may turn out you have lost much more than what you invested. For that reason most regulatory authorities impose leverage caps for non-professional traders: in the USA it is 1:50, while for brokers licensed in the EU and the UK it is 1:30. The Australia’s ASIC also recently announced that from 29 March 2021 it will restrict leverage for major currency pairs to 1:30.
FXParamount Deposit/Withdrawal Methods And Fees
In the broker’s website we see various payment providers’ logos – VISA and MasterCard, Wire Transfer, PayPal, Skrill, WebMoney and Cryptos. These are nicely summarized in a table listing the minimum deposit amounts, processing times and commissions. With the exception of credit cards, all methods come with commission, which goes up to 6% for cryptocurrencies, for both deposits and withdrawals.
These fees are very high, especially for bank transfer. Although international transfers can be costly, most legitimate and reliable brokers would cover it. What is more we could not check these methods and conditions in the trading area because in order to perform a deposit, we had to upload documents.
We also have to note that this broker is promoting an up to 60% bonus offer on its website. This is a common scam tactic to lure unsuspecting investors with big promises. Regulated brokers do not offer such promotions as they are prohibited by the respective authorities.
Overall, we must say that FXParamount is not like the most common scammers. They offer the MT4 trading platform and their conditions are tolerable. What is most important, however, when choosing a broker to invest with, is whether they are regulated, and FXParamount is most definitely NOT regulated, so we would advise not to invest with them.
How does the scam work?
The usual scam operates on a multi-level, though very basic model. The users will be tempted to click on an Internet ad promising quick and easy profits. If they do, it will take them to a website that will ask for their personal details, including email address and phone number. Once they submit this information, an avalanche of emails and phone calls will be unleashed. Scammers will promise the world to these potential traders in order to induce them to make an initial deposit between $200 and $300.
These “brokers” will get a fat commission from the deposited sums and will transfer the unsuspecting users to “senior” scammers. The latter are smooth talkers who will try to persuade users to invest more funds, using phrases like “now is the right time” and “the moment is perfect for making hefty profits”. Of course, these are empty words, and traders will soon have doubts whether they have not been played.
When they try to withdraw their money, these doubts will be confirmed: the con-artists will do anything to deny or at least delay their withdrawals. From trying to convince the traders that they are making a big mistake to withdraw funds now because they will lose big profits, to asking for additional documents or citing clauses in the accepted agreements, to transferring you to another department, there is a single objective to delay the users from filing for a chargeback with their financial institution and lose any chances of recovering their money.
What to do when scammed?
Anyone can fall prey to such a scam. In the unfortunate event this happens to you, there are a few things you can do. If you deposited using a credit card you should immediately file for a chargeback. In an effort to combat online fraud VISA and MasterCard have extended the period in which one can file a chargeback to a year and a half, so there is a big chance that you may be able to recover your funds. If however, you used a bank wire or bitcoin to deposit, chances to get your money back are almost none.
We should also warn against “recovery agencies” who prey on victimized traders by claiming they can recover their funds. These scammers will ask you to pay a fee for this service, but will only take your money and do nothing.
Rich Snippet Data
The Forex Review