Forex trading has been actively trending for a couple of years now, and we can hear different stories around the globe. From people who have become successful traders to individuals who think forex will only ruin you. Why is, is it like that exactly? What should you know about forex?
The crucial difference between the two is next – that the first one did their research and continued educating themselves on their own, or with a suitable broker, and most importantly, works for a regulated company. The other ones got burnt because they rushed in too quickly, probably seeing an ad online telling them they will earn thousands if not million in a week. They fell for a cheap advertisement but paid a high price for it. Is forex a scam or not then?
In this article, we give you a simple breakdown of how a scam can look like and what to look for if you are serious about your investments and want to trade successfully.
There are regulated companies, and there are scammers, like in every other business.
Regulated forex companies want to make sure you get proper help and security regarding your trading account. Of course, if somebody calls you out of the blue and says the same thing, how would you know the difference? By taking your time and checking their company online.
Search for reviews, not just their website. See if the name of the broker who called you appears on LinkedIn and make sure to check broker reviews online. Make sure you go to websites in charge of regulating trading companies and searching for the company there. If they are on their regulated list, everything is fine, and you can continue. If not, better do more research and find a broker on your own. Don’t rush.
What scamming looks like
Nobody gives away money just like that, especially the finance market. You should give to get. That doesn’t mean thousands of dollars. If you accidentally or out of curiosity clicked on a commercial saying something like “invest one dollar get a thousand,” it is a scam. You will probably get lots of phone calls where “brokers” are claiming you signed up for their company, and you need to pay some small amount of money to start trading with them. Now, this is the case with regular forex companies as well, but the main difference is that if you ask for a withdrawal, you will get it right away.
And like we said, regulated companies probably won’t put commercials like that and won’t call you out of anywhere. With forex companies that are not trying to scam you, you will get in contact with them. You will get a suitable broker. They will be there for you. Once again, they are probably on the regulated list already. Everyone calling you because you clicked on an ad should be suspicious, especially if they are uncomfortably pushing you. If they are too aggressive, if they don’t listen to you, that is already a red flag. If you are financially unstable, avoid engaging with that kind of person. Calm yourself down, do research offline and online (especially on the internet), and then start small.
When we talked about regulation websites, we mean about authorities such as NFA, CFTC, FSA, and many more. These authorities make sure they got the customer’s back and will make sure that you can get your money if something goes wrong (if the company you are trading with is regulated). This is a must when you are checking a forex company.
“Forex Demo accounts are a scam.”
We would disagree entirely with this statement. Demo accounts exist if you are a complete beginner. Its purpose is to teach you how everything works, and you are not trading with real money. You can see how everything changes and how it functions. People will often avoid that if they see you have some knowledge about the market because demo accounts can give you a false impression where once you start trading for real, you will still treat your money like it’s fake. That is where people make mistakes and then say they will never trade again. Trading is an investment, and you should always look at it that way. If you are a complete beginner, try it with your broker’s help, but don’t do it for too long and learn as much as you can meanwhile.
While we are talking about brokers
A broker who is committed to their work is dedicated to their clients as well. You won’t see them calling you until you put in a deposit and then disappear. They should give you advice and provide you with 24/7 customer support. 24/7 is a must since forex is also operating all the time across the globe, and opportunities are endless. If a potential broker is hesitating when you ask about withdrawals, that should be a hint. You should check his background. But regulated brokers are there to tell you to start small, give you advice, and teach you how to trade. Ultimately you will get comfortable trading by yourself, but he should be there even if you want to trade only one dollar.
What does your gut tell you?
Don’t underestimate your instinct. If you are a distrustful person in general, then make that background check. If you are nervous because you are desperately trying to find a way to earn income, don’t let your emotions and impulsivity work for you. They will probably work AGAINST you. That’s when you get caught in a mess called “scam.” Try scheduling a conversation where you will get some necessary information about trading if you are overwhelmed when you go on the internet. Perhaps the best option is to sign up for a short online course. This year many appeared on famous teaching websites. They are free and very informative. This will give you some sense of confidence. See where you go from there.
Forex is a serious industry that detests scammers as much as you do. The foreign exchange market itself cannot control every company. That’s why you have regulatory authorities where you can check the credibility of what you are being told over the phone or googling a company. It’s in everyone’s interest in the financial market to keep customers safe and turn them into traders who know what they are doing.
That means you are aware that you can gain but also lose. Your broker should tell you that right away. He will also advise you to start small and never invest more than you are ready to lose. That doesn’t mean you will, but you should follow a general rule if you want to play smartly. If somebody called you and told you after a day or two to invest everything you have because it’s the right time, by the end of this article, you should know that it is called a “scam.” Nobody can promise you the world and give it to you just because they said so.