Below is a list of some of the common ways that people sell you fake deals, promising quick and easy profits with very little work involved. It has also been tested to be true with good money managers who go into this market for a living.
1. Fake Forex Brokers
You will find them through various online forums where forex beginners, day traders, and some seasoned forex traders hang out. These forex brokers will pretend to be real but will give you very bad deals. They will encourage you to invest in far-out complex forex trades which are not a good bet to begin with.
How to Avoid Forex Scams
You must learn the risks associated with this market because some of the most common traps that you could fall into and lose your money are as follows:
Not realising you are dealing with a scammer – Despite the high returns that they are offering, it’s very important that you don’t trust all of the Forex brokers or their offers. It is possible that you could be losing your money because you are dealing with a scammer that wants your money so they can manipulate the market and your profits. Always do some research on the forex market and the broker before you open an account. Take advantage of the trading tips that you see on other Forex traders. Ask your friends and colleagues if they know of any Forex broker that can help you get a better trade or more profits.
Some Tips
There are a lot of things that you can do to improve the chances of you making good money in the forex market. These tips will help you survive in this market safely and quickly.
Trade with Old Forex Codes
The reason why many people prefer to use old forex codes is because it is very unlikely that any forex trader would modify or convert codes once they receive them and thus, it is a good bet for people who do not have knowledge of forex trading. The reason for this is that if you lose this money, it would be very difficult to get back and there are chances that no one would understand why you lost this money. Also, this is because your original CFD may have a long code that will look like a long string of letters.
Ask yourself three questions
Before you click on the link and sign up to an online Forex trading site, ask yourself a few questions:
If you don’t have the $1000 required to buy the Forex currencies on your side, how would you even start trading?
What is the likelihood that you will make profits as a forex trader in the short-term?
How would you ever convince someone else to trade with you on a particular currency exchange?
Do some research and find your answers by asking the following questions:
How much time will you dedicate to becoming a successful forex trader?
Who will you trust for information on trading sites?
How can you make sure you aren’t being scammed?
Identify the broker
There are brokers who market themselves as reputable and some of them are legitimate. All brokers have to comply with KYC regulations and all the information you are required to provide before making a transaction with a particular broker should be provided to you. So do not be tempted by the over-promising statements of fraud brokers. For instance, if the broker promises high returns, especially above 7.5 percent, at least for the first two years, that is not something you should trust.
One way to identify legitimate brokers is to look at the manner in which they will advertise the profitability of their brokerage and also the amount of money they are investing in the market.
Determine the risk
Before trading in the forex market, you need to determine how much you are willing to risk in order to get rich. Of course, the people running the scams would go all out to convince you that they will not let you lose even a dollar on the forex market. They would promise you an unbelievable return on your initial investment.
However, the truth is that when you start trading in the forex market, you need to understand that you are not betting. You are not gambling; you are trading. Every single piece of currency in the world has different value and nobody knows when it will come to market. You are trading in a highly volatile environment where there is always a chance of trading in an automated trading machine (ATS).
Check the reputation of the broker
In order to avoid being scammed, you should check the reputation of the broker you are going to use. It is also good to know the risks involved, because sometimes you can only make good money through forex trading if you trade on reputable websites that are monitored by some of the financial institutions and bodies. The brokerage houses that are legit will not promise you an easy and high amount of money but will only tell you that they will make you money in return. There is no guarantee that they will do the same thing or do it in a profitable manner. One only needs to do their due diligence by researching the names of the brokers they are going to use and its track record in this market and this is the best way to avoid forex scams.
Evaluate the service fee
Forex Scammers usually rely on commission-based payment system where they collect all the money from the trader from the moment the trade is made. It makes it very difficult for a person without a good or no experience trading to make money from this market. The cash payments are often far more than the hourly payment needed to carry out a profitable forex trade. If you are not sure, don’t get scammed, check with your broker to find out the commission fees or consult other traders in the market to figure out how to avoid being scammed by scam websites.
Find the market the website talks about
Forex websites have many different themes and will have multiple choices of markets to invest in. Usually, they will say something like, “I’m trading the x price. We’ll make you x/4/10.
Find out if the company is regulated
Always find out if the forex broker you are thinking of investing with is registered in your country. This is a process called the KYC/AML process. The key purpose of this is to prevent all kinds of illegal and fraudulent activities in the forex market. It will also help you identify the company’s responsibility to its customers and, in some cases, the right to terminate the relationship with the company if it becomes clear that the business isn’t healthy and will go under in the future.
Check its compliance record
If the company is registered in your country, check its compliance record. If the brokerage is not registered, you might want to move your funds to a regulated forex brokerage.