The Forex market is undeniably the world’s largest financial market right now. It has over 6 trillion dollars’ worth of transactions every day, with corporations, central banks, governments, and private individuals trading with each other. It is also easy to access which makes it all the more attractive even to newbies – one click and you will be exposed to various currency pairs to trade. And, of course, with it being the biggest and most accessible financial market, you can also expect great profitability. Gaining the upper hand in profit-making is not really an easy feat, though, especially when scams are always present in the trading world.
Forex scams are not really a new thing. Trading has always been entangled with it and will continue to do so. Forex trading itself is nowhere near fraudulent – it is the people inside it that get greedy enough to trick other people to get their money. The solution here relies on yourself – you need to be aware of scams and be wise enough to avoid them.
To help you identify a trading scam, here are three things you must watch out for:
Too good to be true promises
This pertains to individuals who offer Forex services like fund management, Forex signals, trading systems, and Expert Advisors or robots.
Trading is not a piece of cake. No exact and guaranteed way will give you everything that you want to achieve. If you want a bountiful profit, you have to work for it. So, if someone offers or promises you a large gain with little to no effort or financial risk at all, you can be certain that they are a scammer. The biggest sign of a Forex scammer is someone who makes too good to be true promises – they ‘assure’ you of achieving impossible things without doing anything substantial.
You cannot get anything for free nowadays. While you can definitely earn a lot from it, Forex trading needs education, training, devotion, and hard work. Never believe anything that seems unrealistic, especially in the trading world.
No regulatory authority
Now we’re talking about Forex brokers here. If they are not registered with any regulatory authority, they are most probably scammers. Remember that your money is on the line – you do not want to just give them away to unknown and unverified companies. When trading, make sure that the broker has proof of legitimacy. This will assure you that the company you are transacting with is legit.
However, there are instances that they can lie. When this happens, you can contact a regulatory authority. They will let you see a list of regulated companies as well as the cases opened against them. Inspect it and see for yourself whether the broker’s regulatory status is real or not.
Absence of background information
When money is concerned, you have to be a hundred percent sure that you are transacting with a legitimate entity.
If someone is offering you a Forex service, but don’t have a background information of their trades, an email address, and a phone number, you have to step away immediately. You should always ask for solid proof of their trades as well as their contact details in case problems arise. If you are going to subscribe to a trading system or software, you also have to inspect their actual and current performance data. Always be thorough when inspecting background information so you will not fall into scammer traps.
Same as with broker. You have to make sure that they provide you real information about them. Do they have an existing headquarter or physical office? Do they have a real contact number where you can talk to real people? It’s very easy to find these details on the internet, so do your due diligence.
Now that you know how to spot them, here are more tips on how to avoid these shameless scammers:
Educate yourself
This is the first step of getting into forex trading and also a step you have to maintain throughout. You should never stop educating yourself about all things related to trading and the market. Do not stop learning about scams after you read this article. You have to continuously expand your knowledge so you will be wiser in the trading world.
Only trust established Forex brokers
The Forex market is big and there are countless brokers to sign up with. This is why you need to be wary of brokers you get involved with – there are a lot of them and you cannot be sure which one to trust. When signing up with a broker, consider the following factors:
- They operate with transparency
- They are well-known locally and internationally
- They have experience in the industry for at least two years
- They have a dedicated customer support team able to speak your language
Steer clear of red flags
Remember the three things mentioned above check to see if someone or a broker is a scammer or not. This will help you determine a red flag in the trading world. Never forget to do a thorough research of the person you are trading with so you will be sure that they are reliable.
Forex trading is never easy. You do not have to make it harder for yourself by falling into a scammer’s cheese trap. Be a knowledgeable and wise trader!
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