The Forex market is the largest financial market in the world trading over $5 trilion every single day. It allowes central banks and corporations to trade with each other and speculators to take advantage of market that trades 24 hours a day, 5 days a week. Accesstion to worlds forex market has never been easier. You can just click of a button and you could be trading on the direction of the Euro, US dollar, British pound, Japanese Yen or even Russian Ruble.
Trading the forex market is not considered easy, nevertheless the financial gains may seem lucrative. It is essential to have a sound trading education and properly funded trading account. Also is necessary to understand of risk management techniques. Unfortunately, there are always many individuals, who will try to scam others through forex trading scams.
Forex scams will be around for as long as the Forex market exists and will take many different forms. As schemes are evolving, scammers are always somewhere nearby, trying to steal your money away. They tend to target uneducated traders and the best way to avoid getting scammed is by getting a good Forex trading education. Once you are educated, you are no longer an easy target.
How To Spot A Forex Trading Scam
The Forex scammer is usually someone with the guarantee of unusually large profits with little or no financial risk. First of all, although it sounds very attractive, there is no such thing as a 100% guarantee. The bottom line is this: if something sounds too good to be true, it probably is.
Here are some simple rules to follow to avoid scammers:
- Stay safe and do not believe empty promises
- Do not trust software that claims to have found a “secret formula”
- Do not install any suspicious programs unless you are sure that it will not damage your device
Furthermore, remember that true brokers always prove their legitimacy by registering with the regulator.
Three Major Types of Forex Scams to Avoid
There are three main types of forex scams that need to be understood and avoided:
- Forex Robot Scams
A forex robot is a trading program that uses algorithms, or lines of computer code, as technical signals to enter and exit trades. Typically forex robots are built using expert advisors, or EAs, within the popular MetaTrader suite of trading platforms.
However, not all forex robots are scams, online forex robot scams list is here to help you identify which one to avoid.
- Forex Signal Seller Scams
Who are forex signal sellers? The individuals sending out ideas about trade including a currency pair, direction entry price, stop loss and target levels. Here’s a list of things you can watch out for without being a victim of these scams:Â
- Subscription fees:Individuals may market you amazing results without any verification. To get access to the trades, you often need to pay high subscription fees, or they start out low and use credit or banking details for other kinds of money scams.
- Broker-tied signals:Some signal sellers offer you trading signals, but only if you sign up with a specific broker. This means they may be getting a kickback from the broker, so are motivated to send you any trades for you to take regardless if they win or lose. Having said this, there are some that will want to keep you profitable so they can continue to receive their kickbacks from the broker, which acts as their payment for the service.
- Unverified results:It’s all well and good saying your forex signals have made a high percentage return but if they can’t show a verified track record it means they’re not trading the signals themselves – which is clearly a red flag in itself.
- Phony Forex Trading Investment Scams
There are many ads promoting forec trading investments scams and phony firex investment funds. In essence, a slick marketing message or salesperson will sell you on the phantom, or unverified results, of their forex fund. Its say that all you need to do is send them your money and you can sit back, relax and enjoy the returns of your investment.
Many people who did this often never seen their money again. The company says they’ve never heard of you and have not received any funds from you. Another case, is that they open an account for you and after one or two trades, they wipe out your account. While they blame it on the market, it’s all gone to their brokerage company. And, because it is unregulated, it’s very difficult to get your money back – just another type of currency scam.
Three Signs of Forex Trading Investment Scams
Trading Systems and Education Without Any Proof
At the begining we said that you should be getting a good Forex trading education to avoid getting scammed. However the are also a lot of scammers selling trading systems and education often without a trading room or any services. They do not have any valid proof of their trading history.
Email Spam Asking for Personal Info
Scammers may also ask you for personal information, such as your full name, your phone number or your home address. Never give away your personal data to someone you do not fully trust. Always remeber that data may become currency soon. Be suspicious of brokers who don’t provide you with a written risk disclosure statement
No Background
Always ask about background information. Never work with someone who refuse to provide you this information and always do a quick check online to see if the person or company is legit.
Questions To Ask To Avoid Forex Trading Investment Scams
You should always ask proper questions and you have every right to that. Make sure you know your rights, make research and check the company‘s registration and business background. A few proper questions you can see below.
- What can you do when you realise a broker’s offer is not for you?
- How binding is the contract?
- How easy is it to reach customer service?
- Can you contact the broker by phone, Skype or email?
- Do they list a physical address?
- Do they use actual names?
- Are they a registered company?
- Can they provide performance history?
