The greater popularity of forex trading has drawn an increased number of scammers. However, in case you observe these 4 pointers, you’ll be able to avoid all of them from taking your hard earned money and profits.
The foreign exchange market, being the largest and the most liquid in the world, is a great way of making money, and an increased number of people are getting involved in trading currencies as a means of earning a living. And, due to the increased attractiveness of trading currencies, the number of forex scammers trying to gain illegal wealth from the market is also on the rise. The following are four tips that can assist you to spot these forex scams.
First and foremost, you should ensure that the United States Commodities Futures Trading Commission (CFTC), or its equal in your country of residence, authenticates your chosen broker. In addition to ensuring that the regulators logo is on your brokers website, you should contact the CFTC, by phone or e-mail, to further validate the certification of your broker. In as much as most forex brokers are already licensed by the CFTC, you should do your own homework to ensure that you do not fall prey of these scammers who are frequently changing their tactics.
Second, you should not participate in schemes that promise abnormal gains in no time. Making consistent profits trading currencies is not an easy task. Undoubtedly, it needs lots of hard work, research, analytical skills, understanding of economics as well as constant practice to master a profitable trading strategy. Becoming constantly profitable in the foreign exchange market has no short cuts. Thus, any scheme promoting ridiculous guarantees through unsolicited calls should make you to start being suspicious. For instance, a promotion saying “1,500 pips in 2 days!” or “400% profits in 4 days!” should make you to start being suspicious.
Another way of recognizing a forex scam is when a promotion guarantees little or no financial risk in trading currencies. In any investment, there is always the risk of loss. And, trading in foreign currencies cannot be excluded. In most cases, forex scammers will attract inexperienced investors by giving them false guarantees that their investments are secure, or they will increase their profits through trading in the “Interbank Market”. However, you should remember that these claims are completely false, as even the experienced forex traders are not able to guarantee that they will not incur losses in any given day. The foreign exchange market is somewhat unpredictable; thus, you need to stay away from individuals who fail to recognize this important fact.
An additional tip that gives a picture of a forex scam is a company that appears to be giving incredible information. You can recognize this if a firm does not have performance record, is not willing to give you its background, or does not have a real address. Scam artists usually disguise themselves through lack of adequate backing for their activities. Thus, if your questions to a forex company are not satisfactorily answered, then this should be a red flag signifying suspicious dealings. If a firm is making bold claims concerning how it has succeeded in the forex world but unwilling to provide adequate backing for it, then you should proceed with extreme caution.
Forex trading is a profitable business venture; yet, you cannot anticipate its benefits if you happen to fall a victim of a forex scam. You ought to be very thorough and vigilant so as to personally recognize and avoid the costly dangers related to trading currencies.
