Avoiding Forex-Related Frauds and Scams

Avoiding Forex-Related Frauds and Scams

Many people have suffered "burns" as a result of online scams. Your doubts about whether they would have gone to all that work developing a trading platform merely to take your money may be caused by their websites' immaculate legitimacy. Beware.

The broker's physical location is the first item I check.

I swiftly decide against joining up if I learn that they are located in a nation where, in my opinion, the financial sector is underdeveloped and somewhat uncontrolled. Although this is bad news for trustworthy brokers in certain nations, it is your responsibility as a trader to safeguard your money.

You won't be able to trade if you lose that.

They must persuade you that they will treat you fairly as an investment if they want your business.

My first broker was an Australian. I'm utilizing an American one right now. Although I haven't used any UK-based brokers, the British financial sector is among the finest. If their website is in your language, businesses headquartered in Germany, France, Japan, and other nations are usually just as good.

Take note of any license numbers they may have registered with regulatory organizations that serve as the government's watchdogs and regulate the financial and investment sectors.

These organizations establish stringent regulations to protect your investment. Brokers may be required to keep all customer cash separate from the business's operating funds under some of these regulations.

Your monies must be deposited in trustworthy banks, and they may only be taken from these accounts in response to particular withdrawal requests.

Be aware that there are some fictitious regulatory organizations floating around the cyberspace.

Check out how long they have been in business.

Try to find any evaluations or remarks that have been made about them. Look for discussion areas where traders discuss their brokers.

The following is a list of items to remember in order to prevent falling for a scam:

• Avoid opportunities that appear to be too good to be true.

The same applies to those who may have lately received a substantial sum of money and are looking about for secure investment options.

Retirees with access to their retirement money may be among them.

It seems sense that retirees would be interested in "high-return, low-risk investments." They are also extremely susceptible because of this.

Be cautious if you consider yourself to be one of these folks.

Many dishonest people want to steal your money.

Additionally, until you can start expanding your money, just devote a small portion of it to trading.

It is a risk you should accept because not everyone can trade effectively. Your whole life savings are in danger.

• Stay away from people or businesses that promise or predict large profits.

Trading is difficult in all forms.

Currency trading is no different.

Be skeptical of claims that make it seem simple.

Observations like:

• "In the currency market, you will make a profit whether the market goes up or down";

• "Make $1,000 per week, always";

• "We outperform domestic investments by 90%";

• "You'll receive annual returns of 70%";

• "This is a no-risk approach."

Why would they bother telling you about it if they could generate such returns?

• Watch Out For Businesses That Undersell Investment Risks

When corporations claim that written risk disclosure agreements are standard formality mandated by the government, hold your wallet tight and zip up your pocketbook. Be wary of the following statements:

• "The most you can lose with a $10,000 deposit is $200 to $250 every day";

• "We guarantee to make up for any damages you may have."

• Watch Out For Firms That Suggest Trading In The "Interbank Market"

Never believe anyone who claims to have access to the "interbank market" or who can provide you access to trade there since that is where you can get great deals. That is untrue.

The "interbank market" is not a location or a structure. Simply put, it is a loose network of currency exchange deals conducted between significant financial institutions and other big corporations.

• Targeting Ethnic Minorities Is Common

It is occasionally used to draw Russian, Chinese, and Indian minorities through ethnic media and television "infomercials." These advertisements occasionally advertise "work opportunities for account executives to trade foreign currencies," wherein the hired "account executive" is expected to spend his own funds to transact in currencies and is frequently urged to find others to join them in doing the same.

• Research the Company's History

Verify any information you get to be sure the business is who they say they are. Try to learn as much as you can about the individuals running the business.

Do not depend exclusively on verbal claims and guarantees given by staff members of the firm.

• It's not worth risking your money if you have any doubts.

My advice is to start exploring elsewhere if, after attempting to gather information, you are still unsure about a specific company's qualifications.

Contacting government "watchdogs" who stay current on trends and complaints involving scams and other fraudulent activity may help you uncover more information.

Please refer to the list of organizations that oversee the securities sector, arranged by nation, in the website's resource area. A list of brokers is also included for your consideration.

This is a condensed extract from The Part-Time Currency Trader.