The forex trading market is a big, vast world, and it is in constant motion. Once the market for one country calls it a night, another one opens from the other side of the world. With how big and all-encompassing it is, not every part of it can be regulated. This is where people with ill-intentions exploit the situation.
Those weak spots in the forex market are where people fall prey to Forex scams. If you are thinking of venturing into the Forex trading market, then it is fortunate that you stumbled upon this article. One of the key things to being successful in Forex is knowing all possible outcomes. If you are already aware of the risks and how they can happen, you can approach each decision carefully.
Our first quick tip that makes a huge difference is that you should first check out the Background Affiliation Status Information Center to see if a broker you are speaking with has ever had a regulatory action filed against them.
Once you’ve had that out of the way, here are some more ways you can avoid forex trading scams! Read on to find out indicators that will help you spot them:
1. Entices you with unrealistic goals.
If their claim sounds too good to be true, then it probably is. Even if Forex trading earns money relatively fast, it is not a get-rich-quick kind of venture. These trading scams will reel you in with great results that you can achieve fast. However, they do not provide you with the method on how they plan to achieve that, nor do that provide statistics nor data to back up their claim. If they promise you big money fast, then you should already know that it is most likely just a scam.
2. The signal-seller scams.
One of the most modern forms of Forex scams is the signal-seller scam. These are retail firms or managed account companies that offer you a system that claims to be able to pinpoint the best times to buy or sell a currency pair, solely based on “expert” recommendations. The experts boast of being long-time experts, and peddle you with testimonials of their results. Then they offer you those results, only if you will hand over a handsome fee.
However, most of these signal sellers disappear once the payment has been made. Be wary of these, and be sure to research any service you are thinking of purchasing.
3. The classic Point-Spread scam.
This is probably one of the oldest scams to ever exist in the Forex trading world. It is based on computer manipulation when it comes to bid/ask spreads. It has lost its traction over the past decade, but it is still around and you might be susceptible to it if you are not vigilant. Tendencies for these scams still do exist and, since the Forex market is digital, it is extremely easy for expert scammers to pack up their bags and leave.
One more thing that you should look out for is if the brokers will not allow you to withdraw money from investor accounts. An important factor to consider whenever you check out brokers is that they are credible, through the reviews and experiences of legitimate people.
Conduct your own due diligence by doing background checks of those that you want to do business with. Do not hesitate and ask for proof in case you have doubts about their legitimacy. After all, you will be investing your own money, so it is best to make sure that it goes to good use.