3 Ways to Prevent Forex Trading Scams in 2020

2 Mins read

In today’s digital era, robot scams, signal-seller scams, and phony trading investment scams are prevalent in forex markets. You need to be extra careful against these scamming acts, specifically if you are a beginner, naïve trader, or have the low financial literacy to operate in forex markets. Read the following points to avoid probable trading scams:

#1: Don’t Rush Your Decisions

The best thing that you can do to avoid forex trading scams is to make informed decisions. Take your time to learn about a specific forex broker. You can either consider the recommendations of your fellow investors or search for online results. Finding the best forex broker is not an easy thing, especially when you are a beginner. However, there are a few things that you can do to determine the credibility of a broker. You can google the business name of a forex broker, review the website, and read the customers’ feedback. If there are positive reviews on the Internet about a specific provider, the chances of trading scams are reasonably low. However, if you see any legal actions against a broker, you can directly judge that he is not a reliable person to consult. Also, you can visit online forums to select the best forex broker, and minimize potential risks of trading scams.

#2: Choose a Regulated Broker

It is in your best interest to find a regulated broker that is associated with an appropriate governing body. You must understand that you are out of luck when you acquire the services of an unregulated broker. He can steal your money and go missing easily. You wouldn’t have any real chance to track him because he has no legal governing body to report to. You can check if a broker is regulated by looking at the bottom of a website. FCA, ASIC, SFC, FMA, IIROC, FSA, CySEC, MAS, and FINMA are legitimate regulatory bodies. If you notice the name of a regulatory body or company history, you can assure that a broker is trustworthy. Generally speaking, a regulated broker has transparent fees, valuable compliance policies, and favorable online reviews.

#3: Don’t Fall for Opportunities That Seem Too Good

You should keep away from opportunities that seem unrealistic or too good to be true. There is no such thing as ‘easy money.’ So if a forex broker offers you unreasonably high returns or profits for opening an account, then you must know its fraud. You cannot expect to make $50/day for $100 investment. Since foreign exchange markets are highly volatile, the success rate is usually below 90%. One thing that you should know that an experienced forex broker never promises returns. He simply guides you to make money on your forex investments by mitigating potential risks. If any broker says that he can help you get an expensive car while making investments in foreign markets, then he is wrong and probably involved in phony activities. However, I’m not saying that you cannot earn high rewards, I’m merely stating the fact that things take time and require adequate market experience.

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