Due to its high returns on low investments, forex trading is the money maker in the current era. Its vast market volume of approximately 5 trillion dollars makes it one of the largest financial markets in the world. It is an appealing business because of low investment costs, but if not appropriately strategized, you can end up losing a lot of money.
When investing in foreign exchange, you should make decision-based on fundamental and technical analysis, market trends and future predictions based on primary or secondary data. You should never take these decisions on the basis of your emotions or gut feeling.
Just like any other business, there are both, good guys and bad guys in forex trading. Forex scams come as part and parcel of forex trading; therefore, you need to have a piece of knowledge and have to take individual steps to save yourself from these forex trading scams. Forex scams are seductive, believable and well crafted. In this article, we will be discussing how you can spot a forex trading scam and save yourself from losing all your capital.
When you google about a broker, and you get nothing, it means there is something wrong. That is the primary sign that a broker is fake. Indeed, even the best brokers will have bad reviews. There will always be a trader who would want to blame all of his shortcomings on the broker.
Be that as it may, when there are no reviews, this is the point where you need to do some grave digging and put all your internet skills at work. If no one has heard about that broker, then you should keep away from such a broker. There is an absolute probability that the broker might be a new legit broker, but its better safe than sorry. Let the broker build up some credibility before engaging in business with them.
Observe the Broker’s website
Just a wrong or outdated website design can’t point towards a fore trading scam. The financial industry is known to be slightly behind on the technology end. But there still can be some pointers that you can observe to differentiate between a legit and a fake broker. A broker operating from an online blog should raise red flags. Can you trust a person with all your life savings who cannot even afford to host a website at a very nominal cost?
A broker using an online blog will always remain anonymous because they don’t have a registered domain under their name. Even if they have a website, try to observe anything that might seem out of the ordinary. Also, keep an eye out for weird money conversions on the website. All these clues can add up to confirm the legitimacy or fakeness of a broker.
Incomplete Sign up Process
A fake broker will not have a proper sign-up process, or his sign up will lead to a dead end. Also, you won’t be able to download the brokers proprietary trading platform. When you surfed their website and it talked about a trading platform, but now you are not able to download it. You should connect the dots to determine the legitimacy of the broker.
Unverified Trading Results
Be sure to observe the trading results posted by your broker on the reporting website. Many of these reporting websites offer the provisioning of verifying one’s account. Account verification of a broker on any of these sites is not a cumbersome process.
Therefore, if you see a broker posting results through an unverified account, you would want to hold on before conducting any business with such a broker. There is a very high probability of the broker being fake.
A scammer will paint a picture in front of you promising an unrealistic return on your investments. There often is a massive disparity between what they are offering and what you can achieve based on market trends and predictions.
If a broker is telling you that he can turn you 1000 dollars into a million dollar, then you need to hold your horses and conduct market research first. If you are being promised such unrealistic returns, then you are playing in the hands of the scammers. Remember that trading is business and you should be in it for the long haul.
By going through the above article, you will be able to spot the scammers and save your money from getting into wrong hands. Remember the fact that if there is anything that is too good to be true, then most probably it is a plot hatched to rip you off.
Before employing any broker, complete all the pre-requisites including due diligence. You can’t hand over all your money to someone before conducting thorough research about their history, clientele, and reviews.