Every trader in the Forex Market trades with the objective to earn profits. Experienced traders definitely earned profits. They trade with a realistic approach and in-depth market knowledge, the risks involved are also very high. The risk is not only limited to losing money in Forex trading but also the existence of various Forex scams that can devastate you.
The fraudulent activities exist in different forms in the Forex market. There are several fake companies existing in this trade with fake credentials, false testimonials, and hidden terms and conditions, who promise to offer huge profits in very fewer times. There are companies who conduct phony marketing offering the investors to go for experienced Forex traders who can manage their funds and generate profits. The inexperienced traders with the intent of gaining huge profits in short term often fall for it losing out their money. There are Forex scammers who are incredibly smart enough to convince the customers to buy automated software systems that can help them earn huge profits. Besides, several Forex brokers exist in this market that is not fair in their practices and can make their customers lose their funds. Other types of Forex scams are managed accounts, copy trading, signaling services.
These scams are so prevalent that you should be aware of them and also know how to keep yourself protected so that you do not incur losses or blow up your funds completely.
Here are 10 ways to avoid Forex scams; which will help you to be aware of fraudulent activity in the Forex market and prevent you from losing money.
- Know how Forex trading works
Before you get into Forex trade, you must be well aware of how trading in Forex market functions. Successful Forex trading happens gradually and if you want to earn profits in this business, you need to gain experience and knowledge and practice trading. Remember, there are no shortcuts in Forex trading. If any company or broker offers you easy ways to earn profits, it must a possible scam and you must do all possible research to check their credentials, authenticity.
- Do not trust websites that offer early profits.
It is always easy to set up a website and promote false claims of giving you early returns. You may find many online websites which are created based on fake credentials. You should always restrain from the websites which promise you to earn huge profits in a short span of time. You should always read their terms and conditions before entering into any deal or agreement.
Do not be carried away with their flashy look, creative content and testimonials as they all can be false. Before you wish to put your investment decisions in someone else’s hand, you should thoroughly investigate. Always go through the disclaimers and ensure that there are no hidden terms and conditions. Besides all authentic websites are members of NFA or CFTC. Verify the authenticity of the websites.
- Beware of phony marketing
There are several swindlers who pose as authentic investment houses and companies and all the investors in order to lure them to invest with them with the guarantee to offer them huge profits in no time. These swindlers often try to convince the investors that they can offer them experienced Forex traders who can manage their Forex trades and generate outstanding profits. In such cases, the scammers ask the investors to completely give them the control of their funds and if you fall for it, you are at risk. They have absolutely good sales pitch and convincing power but do not fall for it. Never transfer money online if they ask to as they are all swindlers located overseas trying to turn your money into their fortune.
- Beware of fraud companies
There are several companies who guarantee surprising profits. Any company doing so must be trying to cheat you by offering you opportunities are unrealistic. Remember, Forex trading is not easy and you can be rich overnight. Companies which claim to guarantee you unexpected profits and low risks, be wary of them. Any company that promises you to cover all your losses is surely making a false promise as Forex trading has a lot of risks.
Always verify the authenticity of these companies and check with CFTC or the NFA to know if the company is genuine. Always try to read the reviews and rating of such companies.
- Avoid dishonest brokers
There are several brokers in the Forex market who are actually not genuine and may try to use their client’s money to earn money for them. There are several brokers who claim to earn good profits and make you rich overnight. Be careful of such brokers as they may make you lose your funds. Many swindlers try to pose themselves as authenticate ones by setting up a grand office. But never fall for these appearances.
Whenever you choose a broker, always validate his license and does a background check. You should also check if he meets the basic financial requirements to be a broker. Check out websites that tell you about the best broker, their business authenticity, and market reputation.
- Avoid companies trading in the interbank market
Any company that asks you to trade in the interbank market is actually scamming. The interbank market is not a physical entity but a system in the Forex market that allows currency trading between financial institutions and big companies. Stay away from such fraudulent companies.
- Know the margins
If you’re inexperienced or not able to monitor the trade, do not get into margin trading as it may cause you losses. Also, ask your broker or financial adviser how margin and leverage work in trading.
- Avoid being unrealistic
If you are realistic and you know how Forex trading works, you will never fall into any trap laid down by the scammers. These swindlers will always try to propose attractive offers to make you earn huge profits, but if you are not affected by the greed of earning profits quickly, you will stay safe. Do not be carried away by the swindlers who promise big profits at no risk. Remember, consistent practice will make you experienced in trading and help you gain profits in long run.
- Value Clarity in Communication
If you are trying to appoint a broker or company to handle your investments, always ensure that they are transparent in their business conduct. If you are deciding upon an online broker, make sure the fees and commission structure is available on the website. There should be information about how you can withdraw your funds. Check for their income proof on the website. Investigate about all information they provide on the website. If you are in doubt about anything, do not go for it.
- Ask questions
If any broker or company approaches you and tries to convince you to go for their so-called profit-making services, ask them questions to know what they promise is real. Ask them how they found your details, where is their office, what are the substantial risks involved, are the investments traded on regulatory exchange etc. Verify the physical existence of their office and go through their track records.
Remember, anything that sounds unusual should not be trusted easily. There will always be a catch to it. Be careful!