How Can You Avoid Forex Trading Scams?
The forex market is so huge that the average daily trading volume is about $5 trillion. Since the market is not well-regulated, there is always a chance of forex scams to take place.
These forex scams promise you quick fortunes through algorithm-based trading, secret trading formulas, or trading through forex robots. This is why you need to very careful if you dealing in the forex market.
Before you get into forex trading, you should do your homework right. The first thing you should do is visit the Background Affiliation Status Information Center website to find out how to select a reputable broker so that you can avoid scams. If needed, you should also check broker reviews online. Just so you know, every company and individual who wants to get into the forex market first needs to become a member of NFA.
Things To Do To Avoid Forex Trading Scams
If you are looking for ways to avoid forex trading scams, then we are here to help you. Go through the information laid below and you will know what to do.
Be careful of opportunities that seem to be very good
You should be careful, before opting for any opportunities that seem to be too good to be true. For instance, if someone’s telling you easy money or quick money in a month, there is a 90% chance that it is a scam. If you find someone promising you such things, then it’s pure nonsense. Forex trading needs a lot of education, screening time, and patience to become profitable. There are no tricks to get easy money in this field. You can only achieve something when you take out the time to learn proper trading.
Check whether the broker is regulated
The second most important thing to check is whether the broker is regulated or not. In case, you are a newbie trader, you should know that brokers who are not regulated don’t have a governing body. This means that if they pull out any tricks with you, then you cannot do anything about it. In other words, dealing with an unregulated broker means you are increasing the risk of getting scammed. When you are working with an unregulated broker, you cannot report to the authorities, if anything goes wrong. This is why you should avoid trading with any such unregulated person.
Trading education and systems without any proof
You will come across many scammers selling trading education and systems. But how do you identify them? Well, when you ask them to show you a proof of their trading history, they simply hit the exit button. You should be very much aware of such people. Some traders provide their systems without any services or trading room. These scammers are known as snake oil merchants. These are the people who do not have any proof of their trading history.
Email spamming for personal info
Some scammers may ask for your personal information through email. But no way should you give away your details if you don’t know the person well. They may ask for the following information:
• Your full name
• Your phone number
• Your home address
In forex trading, you should not give information to any random person, especially when you don’t trust them. You should also be aware of brokers who do not provide any risk disclosure statement.
Broker offering automatic trades to guarantee profits
You will find many scammers who will provide you with automated trading performed by an algorithm or robot claiming that it will make you a lot of money. They claim their robots trade-off signals to get more money for you. These scam brokers usually focus on binary options or cryptocurrency. You should completely avoid these types of brokers as no company can generate big profits through signal or automated trading. Even if they are doing it, you should know that they are never going to give it to you for free.
A forex market is a risky place. It is filled with fraud and scammers looking for a way to scam innocent traders, especially the ones who are new in the market. This is why you need to stay completely alert. If you are approached by anyone with a very good offer, instead of getting happy, you should get suspicious. Forex trading takes time and no one can consistently generate money using any shortcut. Therefore, you shouldn’t fall for any such tricks or scams ever.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes