1. How to Close Trading Account: Why you should

Let’s say you wish to trade with another broker or stop trading altogether. Or, you may be a victim of a cyber scam. Closing a trading account seems easy but in reality, it may get tricky. There are several issues you may encounter along the way, which is why you should explore all the ways to perform that action.  

To close trading account, it’s important to follow a few key steps to ensure success. Whether you’re switching brokers, no longer actively trading, or simply want to get it off your mind, here are the guidelines you can follow to complete the process.

What is a Trading Account?

A live trading account is a platform that allows investors to buy and sell securities and assets such as currency pairs, stocks, bonds, mutual funds, cryptocurrencies, etc. It represents a medium between you and the financial markets, enabling traders to execute trades, place orders, and manage their assets.

Brokerage firms usually offer a multi-tier account system, with each subsequent type providing the customer with additional features and better trading conditions for a higher minimum deposit requirement. Another division refers to retail and professional clients, with the latter being able to access advanced accounts with higher leverage, tighter spreads, and lower commissions.

Accounts are subject to various fees, such as dormant or inactivity fees and penalties. You see here a potential reason why you would want to deactivate trading account.

Reasons to Close a Trading Account

As mentioned, there are several key reasons why one would want to delete trading account. Some are common, while others are not. We outlined the four main cases where traders decide to do so:

• Switching to another broker – You have found a better broker with more optimal trading conditions and have decided to close your current trading account.
• Quitting trading – If you have decided to ditch actively trading and no longer need an account, the best move would be to close it and avoid paying unnecessary dormant/inactivity fees or maintenance.
• Financial plan change – Your financial plan, circumstances, and aspirations may have changed since you opened your original account, which is why you need something different.
• You have been scammed – You have noticed suspicious activities on your account, as well as unauthorized transactions, leading you to believe that you’ve been defrauded by the broker. In that case, you ought to shut the whole thing down.

Steps to Close Your Online Trading Account

How to close a broker account? There are several ways to go about it. Of course, it depends on your circumstances and the reason why you have decided to close it.

We recommend you follow these steps as listed, carefully paying attention to the process and what the broker communicates back to you. If unsuccessful, you may be dealing with a fraudulent provider, meaning you have to explore other options, such as filing complaints with financial regulatory authorities, consulting an attorney, and contacting law enforcement.

Notify Your Broker

The first step would obviously be to inform your broker of the intention to close the trading account. Explain your reason for the decision and be honest about why you want to remove trading account. 

This can easily be done by contacting customer service via phone, email, web form, or live chat. You will probably be required to provide account details and any supporting documentation required to verify your identity.

Close All Open Positions

Before shutting down your trading account, it’s crucial that you first close all open positions to avoid any potential complications. Just place sell orders for any security/asset you currently hold.

This step should be smooth as it can be done at any time. You should not experience any issues with selling off your securities. If you fail to do so, the broker will do it for you, but you can then expect additional fees or losses due to price fluctuations.

File a Withdrawal Request

If your trading account still has funds, you will need to withdraw them and transfer the money to your linked bank account, credit card, electronic or crypto wallet. This process varies from broker to broker, which is why you must carefully read the terms and conditions and follow the instructions.

Also, you won’t be able to withdraw funds if there’s an open position, hence why the previous step is important. In case you experience withdrawal issues, you may have already been scammed.

Fill and Sign the Account Closure Form

The majority of brokerage firms require you to fill out an account closure form and finish the deal. The form usually needs your signature and may require you to disclose the reason for closing the account.

Once you have completed this step, the broker will proceed to shut down your account. Expect a confirmation email that it is finished successfully.

Can a Broker Close My Account Without My Permission?

Theoretically, a broker cannot do so without your permission. Yet, there are many instances where the firm closes your account without first informing you. Potential reasons include the violation of the provider’s terms and conditions or fraudulent activities.

Unfortunately, the latter is the more likely scenario. There are countless illicit brokers lurking online and just waiting for unsuspecting traders and investors to buy into their fake promises. They convince users to deposit funds and eventually steal them, leaving the victims with worthless accounts and financial losses.

If you believe that your account was unjustly closed, you have to explore other options for getting your funds out. Consider contacting regulatory authorities such as the U.S. Securities and Exchange Commission (SEC) and the UK’s Financial Conduct Authority (FCA), or law enforcement agencies.

Be sure to inform your bank about the incident and monitor your funds to prevent further unwanted transactions. Lastly, get in touch with a chargeback company. 

Over here at Scam Brokers Reviews, we offer chargeback services for victims of cyber fraud, offering them professional assistance in recovering funds from their broker accounts. Book your consultation today so we can go through your case together and come up with a solution.

FAQ Section

What is a trading account?

A trading account allows users to deposit funds onto the platform and use it to trade various instruments and assets.

How to close a trading account?

Notify the broker, close all positions, withdraw all available funds, fill out the closure form the provider sends you, and receive confirmation.

Broker closed my account. Why?

Two possible reasons – you violated the terms of use or you got scammed. If it’s the latter, contact a chargeback company for help.