How to Spot a Forex Scam

With so many people trading 24/7 globally, the amount traded in the forex market reaches almost $5 trillion. Forex trading is an easy way to earn money if you know how it works. However, since the market is not that regulated, there are plenty of scammers lurking around to find their next victim. Older scams have been silenced down due to the serious enforcement of CFTC and NFA but there are still new ones popping out everywhere. Read along to learn how to spot scammers and forex scams.

How to Spot a Forex Scammer?

One of the first signs of a forex scammer is the promise of unbelievably high profits with little to no risks. No matter what trade you do, there will never be a 100% guarantee in your trade. Scammers usually use this tactic to lure beginner traders since this kind of offer sound really attractive.

Another sign is that they are not registered with a regulatory authority. Scammers never affiliate themselves with regulatory companies. Real forex brokers are always open to show a proof of legitimacy. If you think there’s something fishy about your forex broker, you can ask a forex regulatory authority for a list of regulated FX Australia companies. That way, you’ll know which ones to avoid.

Educate Yourself and Make Lesser Mistakes

There is a huge risk of losing in forex trading. However, by learning more about the basics, strategies and formulating a trading plan can help you become better in trading. The most skilled traders are less likely to fall for scams since they know what signals to avoid.

Signs of Trading Scams

Scammers and their tactics will always be there as long as the forex market still stands. Here’s how to avoid entering their trap and losing your money.

  • They don’t have a proof – There are plenty of scammers that use this to lure new traders. They offer access to a trading system plus education which can make you think that they’re legit. However, they couldn’t show any proof when you ask them about their trading history and affiliation.
  • Spam mails asking for personal information – Some scammers send spam mails asking for a person’s full name, phone number and complete address. Before giving away your info to a broker, make sure to thoroughly read and understand the written risk disclosure statement. Never give your personal info to somebody you don’t trust.

  • No company background – Just like any other venture, make a thorough background check of the company you’ll be dealing with. Always do a quick check whether it is a person or a company.

One of the essential tips to keep away from forex trading scams is to take your time before making decisions. Doing a background check about an agency won’t hurt. Also, make sure you already assess the advantages and disadvantages of the venture you’ll be entering into. It’s not easy to find a reliable broker whom you can trust but if you found one, you’ll be sure that your investment is in safe hands.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

*