Currency trading is a lucrative option to make your money grow beyond all proportions. Imagine if you will be able to slice off a share of the three trillion US dollars pie traded every day in the global forex market. All it requires is an understanding of currency trading and market indicators. However, several traps can spoil your dreams of multiplying your bank account through currency trading. Such traps are grouped under the name ‘forex scams.’
Understanding Forex Scams
Forex scams are online fraud schemes that lure customers to deposit money for quick returns. Forex scams lure traders through advertisements in newspapers, television, or websites. They usually target amateur and new traders. According to trading experts, forex scams are able to trap individuals who are not actively thinking about the security of their money. If you drop your guard while making an investment decision, you face a high risk of landing in a forex scam. Thus, you should always follow the highest standards while trading currencies through a third party.
Forex Scam: Warning Signals
The US Commodity Futures Trading Commission (CFTC) has identified the following signals as possible warnings of a forex scam:
Get-rich-quick plans advertised on forex websites, forums, and networks. You may also receive such plans in your mailbox, claiming to make you rich within months.
Remain skeptical of currency trading schemes that sound too good to be true. Also, validate schemes that guarantee long-term profits in the forex market.
Stay away from programs that promote currency trading as a no-risk affair.
Please do not deal with a company or broker without information about its background. For example, you can deal with a new broker that has information about past records or the company that owns them.
In the forex market, there are no free lunches. Remember, currency trading occurs in a volatile market, and even the best investment broker cannot guarantee profits in forex. If you have become a victim of a forex scam, contact the local forex regulatory authority or securities commission immediately.
Key take ways to spot and avoid forex scams
Trade with regulated forex brokers – avoid unregulated and offshore broker.
When your broker limiting withdrawals or commingling funds it could a sign of future scams.
Before go for a service seller or signal provider test their service or strategy and check their reviews.
If your broker making difficulty to generate profit be aware check for regular simple broker.