How To Spot A Forex Scam

By Steven Hatzakis Monday, January 15, 2018

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Have you ever heard about Forex scam? What is it? How is it so dangerous? How can we recognize and keep away from it? This post will help you!

Introduction

Forex is the most popular market where traders all over the world sell and buy virtual money. Such the environment creates favorable conditions for many defrauders taking advantage of. For traders, especially newbies, the risk of being scammed is one of the biggest problems they have to face when entering the Forex industry.

Is there any solution for identifying Forex scam? If you have that same concern, our post can help!

What Is a Forex Scam?

A scam (also known as fraud) is the intent of swindling unsuspecting money out of a person. Forex scams are common, and you can find some famous cases over the years on the internet. They usually name after their creators, for example, Ponzi scheme – that name comes from an infamous swindler Charles Ponzi. Long as FX market exists, scams are still out there.

Make sure that you completely understand the risks before trading Forex and making profits. Trading is not always 100% profitable, so you need to consider how much money you can afford to lose. Should not take risks with the money that you save for your own life and your family.

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Also note that there are some variations between an incompetently run brokerage and a dishonest one. But don’t be misunderstood!

How to Avoid Forex Scams?

Spotting a Forex scammer might take a lot of time. For instance, it takes time to compare the regulatory agencies’ regulations with the terms of Forex brokers on their website so as to detect the term’s inconsistencies and oddities.

Forex scammers commonly offer and guarantee that traders will receive profits without any financial risks. Forex swindlers will try to discover your insight, optimism, and fears if you lack trading experience.

Whether you are a novice or an experienced trader, these following tips may help you avoid being scammed.
  • * Don’t run after or quickly trust an empty promise which gives you too perfect trading opportunities because nothing is 100% guarantee. 
  • * Be especially cautious of software which could be found some secret formulas.
  • * Install programs which you are not certain will harm and even damage your computer.
  • * Forex defrauders never register with any regulatory agencies in the Forex market.
  • * A true or reliable Forex broker is always regulated and willing to provide evidence of their legitimacy. Conversely, information about scammer’s performance history is frequently nontransparent.
  • * Be constantly concerned with testimonials from clients on the website. In some cases of defrauders, there are no testimonials. Sometimes, Forex scammers write fake references.
  • * It’s easy to recognize that you are facing a scammer If you receive some uninvited calls to persuade you to invest and ask you to send them immediately cash via Internet, email or unsafe payment method, etc. Never give anyone whom you don’t fully trust your personal information and depend on oral conversations.
  • * Take licensed financial advisor’s bits of advice if you don’t believe your discernment or you have less time to find out more about Forex frauds. 

What Can You Do If You Are Being Scammed?

You have the right to ask Forex brokers. Thanks to proper questions, we can determine that we are coping with a trustworthy broker or a Forex defrauder.
  • * Firstly, know all of your rights. 
  • * Secondly, check the contacts. Can you easily connect to your broker by email, Skype or phone? How can you reach their customer service if needed? Do they list their physical address? 
  • * Lastly, think about registration and business background. Are they regulated or registered? Are willing to supply traders with performance history?

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Whenever you are skeptical of encountering a scammer, you can make contact with regulatory authority to have them give you a regulated companies’ list in order to check out.

Moreover, when you find a fraud or feel you are cheated, you can tell the government authority where you live (of course, if Forex is legal in your country or state). Therefore, you can also play an important role in cleaning up the Forex market.

What Is the Most Common Forex Scam These Days?

One of the most common scams today is the signal seller. What is a signal seller? They are people who can be a retail firm, or an individual trader, etc. who commits trading rely on professional recommendations that can make other traders rich.

They show how much experience and trading abilities they have to let others not only trust and cooperate with them but also make them look like their friends. Then, traders do not suspect and give those scammers a number of dollars. After collecting a certain sum of money, the signal seller will disappear.

This kind of Forex scam is slowly evolving into popular modern-day problems. Nonetheless, not everyone is bad, many other signal sellers are honest and perform their functions well.

Conclusion

Forex scams possibly come from the fake broker, the system or even the signal seller. So, never forget to find a reliable broker whom you could contact with if you encounter a problem. Visit your broker website carefully to find out company’s information. You should also check whether testimonials come from customers or not.

There are no warranty profits in Forex trading. Don’t trust them. Google brokers’ name and forums with keyword “scam”.
See More:
  1. Top 10 Best Forex Trading Software That Every FX Trader Must Know
  2. Top 12 Forex Trading Tips And Tricks For A Successful Trader
  3. Where To Get Free Forex Signals
  4. Forex Trading Psychology – What It’s Viral And How To Control It

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