Friday February 8, 2019 - 10:35:44 GMT
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Forex Scams: How to Avoid Them
The general perception that the forex market is riddled with scammers is an unfortunate one and perhaps not very accurate. Sure, there are bound to be scammers here and there - it’s a cash trading system with a learning curve attached to it. This would naturally attract people who want to take advantage of it.
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Fortunately, avoiding most common forex scams doesn’t require a deep understanding of the forex market. More often than not, it’s simply common sense. However, scammers usually target uneducated traders who are new to forex, which is why touching up on your trading knowledge before settling in with a broker is so important.
Identifying a Scam
Just like most money-focused scams out there, forex scammers entice their victims with extraordinarily high profits and risk-free trading opportunities. But the reality is that there’s no such thing as a 100% guarantee on your trades. That’s just not how forex works.
Scammers will use buzzwords such as “revolutionary” and “secret formula.” What secret formula are they talking about? There’s isn’t one. Again, that’s just not how forex works, and if someone did find a secret formula, they probably wouldn’t be sharing it with the world.
One of the most effective ways to identify a scammer is to check whether they’ve registered with a regulatory authority. Every broker has to do this and their affiliation with the authority can be confirmed by contacting the authority themselves, helping you identify any false claims.
Read the Reviews
What’s great about the forex market is that many websites frequently provide reports on the best and worst brokers. This is a surefire way of determining who you should put your money with. Wall St Nation Forex reviews is a great place to start, providing comprehensive and insightful reviews on currently trending brokers.
It’s worth noting that different people will have different experiences with the brokers they’re reviewing, either putting them in an inaccurately favorable or unfavorable light. That’s why it’s important to read multiple reviews on your broker of choice.
Common Signs of a Scammer
If you ever ask a scammer to provide their trading history or any proof of their profits, chances are they won’t pitch up. That said, anyone can easily fake a screenshot. Be sure to take them with a pinch of salt if your broker seems fishy.
If they’re emailing you asking for personal details such as your phone number and home address, it’s likely a red flag. Some scammers will offer a risk disclosure agreement. Read these thoroughly as there may be signs of a scam written within the agreement, which would help scammers get away with their dealings because you “agreed” to it.
A simple way to verify the identity and background of a potential scammer is to do a quick check on the internet. If details are far and few between or inconsistent, they may be using a fake identity.
Your broker should be established, reputable and compliant with the rules of regulatory authorities. Educating yourself, taking the time to research your broker and using common sense is all you really need in order to avoid scammers.
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