The foreign exchange market, being the largest and the most liquid in the world, is a great way of making money and an increased number of people are getting involved in trading currencies as a means of earning a living. Because of the growing popularity of the Forex market, Forex scam artists trying to cash in on the Forex gravy train also tend to increase in number. Here are four ways on how you can recognize these scam artists.
To begin with, you need to make sure that the United States Commodities Futures Trading Commission (CFTC), or its equivalent in your country, accredits your preferred Forex brokerage firm. Besides looking for the regulator’s certification on your broker’s website, you should contact the CFTC, through their website, to ascertain the authentication of your broker. Several Forex brokerage firms are already certified; however, do countercheck to avoid being victimized by these terrible and dangerous Forex scammers.
Next, stay away from outlandish claims that guarantee high profits in no time. There is no easy money in trading currencies. It is without doubt that it requires a lot of dedication, investigation, analytical skills, knowledge of economics, and consistent practice to become an experienced trader in the foreign exchange market. There is no short cut for harvesting high profits in the Forex market. Thus, any scheme promoting ridiculous guarantees through unsolicited calls should make you to start being suspicious. For example, an advertisement saying “1,000 pips per day!” or “300% profits in 2 days!” sounds too good to be true.
Another way of recognizing a Forex scam is when a promotion guarantees little or no financial risk in trading currencies. In any investment, there is always the risk of loss. And, Forex trading cannot be an exception. Forex Scam artists can give you false promises that your investment is secure, or they will use your capital for trading in the “Interbank Market,” and so on. You have to bear in mind that these assertions are far from reality, since even professional traders cannot guarantee that they will not lose their money in any given day. The foreign exchange market is somewhat unpredictable; thus, you need to stay away from individuals who fail to recognize this important fact.
Another red flag showing a clear sign of a Forex scam is a firm that seems not to be trustworthy. You can recognize this if a firm does not have performance record, is not willing to give you its background, or does not have a real address. Scammers often like to hide behind lack of information to prevent their dealings from being scrutinized. If you find a Forex brokerage firm unwilling to provide you with convincing answers to your questions, then this should make you to be suspicious. If a firm is making bold claims concerning how it has succeeded in the Forex world but unwilling to provide adequate backing for it, then you should proceed with extreme caution.
Trading currencies is a good way of earning money; however, you cannot look forward to benefitting from it in the event you do not take extreme caution before investing your hard-earned money in the Forex market. You ought to be very thorough and vigilant so as to personally recognize and avoid the costly dangers related to trading currencies.
Your broker has the highest chance to steal your money; never let this happen by knowing how to choose an online broker. Note that being regulated is indicated an honest brokerage. Check out the details of a broker that regulated by multiple financial authorities in multiple countries at Easy Forex review.