| Beware of Forex Trading Scams |
 There has been an increase in the number of forex trading scams since the inception of online forex trading. These are basically schemes that are employed by unscrupulous individuals bent on tricking individual traders. They convince gullible people that they can obtain high profit margins by trading with them in the foreign exchange market. The forex market has long been plagued by these swindlers. Thousands of innocent but ignorant investors have lost their money through these rackets. A typical scenario happens when an investor approaches a shady brokerage firm either by person or online. You are promised that your investment will reap double or triple returns in a matter of weeks or a few months. When you fall for this enticement, you surrender your hard earned cash on the pretext that it will be traded in the forex market. However, your money is not actually traded anywhere. It is wired to other accounts and the scammers disappear without a trace. The forex market is a zero-sum market. There is never a level playing field for all players. This implies that, when one trader gains profits, another one looses simultaneously. This is a far cry from the stock exchange where many investors can profit at the same time or loose money together. In the forex market, there are winners and losers although it might be on different transactions altogether. Therefore a scam is pretty easy to identify. They have common characteristics which separate them from the real deal. The first sign is the promise of high returns. Most forex scams will try to lure clients with promises of high yields on low risk investment. These dubious forex brokers will apply high pressure tactics to convince you to send money immediately through money transfers or through courier companies. You can come across such scams on newspaper and magazine classified ads. Some have started to advertise their services online and provide links for wiring money through online pay companies. Others have taken to making unsolicited phone calls to prospective clients. They present sugar coated proposals and solutions combined with high pressure tactics to convince you to take part and invest in their scam. Avoiding Forex Exchange Scams You should be aware of the signs of a scam from far. There are certain elements that raise a red flag on the possibility of a scam. You should carry out a background check on any forex exchange bureau before investing your money. Read the forex reviews and conduct investigations on any brokerage firm before investing your money. Ensure you report any questionable forex brokerage company to the police, IRS or other relevant authority. All legal forex exchange companies are registered either with the CFTC (United States Commodity Futures Trading Commission) or the NFA (National Futures Association) |
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