The seven simple rules on how to avoid Forex scams
Forex scams are common despite the fact that regulatory authorities around the world are actively trying to set regulations and rules to protect investors and public from fraudsters.
Forex market is still unregulated to a large extent and fraudsters are taking advantage to set their games to scam people who are not informed.
Often, the unwary people are tempted by promises of enormous high returns. But these schemes are often just the temptation that in most cases could result in losses exceeding thousands even millions.
So, how can you avoid Forex scams to happen to you?
1) Before begin to trade search for the broker’s headquarters to be registered in countries with banking and tax rules in control.
2) Check for the broker’s authorisation license to engage in the provision of financial services. Often scammers try to defraud people by publishing a license number that belongs to a registered firm. Always do your research with the related country’s financial regulator for the broker’s license. A latest example on how fraudsters misleading public is the case published by MFSA Malta with an authorised forex provider firm.
3) Do your search for any complaints about not be able to withdraw funds from a trading account. If you identify such complaints, try to contact the person publishing the complaint and get a true picture of the incident.
4) Always make sure you understand the terms and conditions properly when signing a contract with the Forex broker provider. Make sure you understand any commissions, bonuses and any restrictions.
5) Avoid testimonials and pictures of people with large amount of cash and/or luxury items. These pictures and testimonials do not prove anything and most probable are fake.
6) Start trading with a small amount of money and try to withdraw from your account to test the broker’s genuineness and reliability.
7) Cases exist where fake brokers may pay you the first return of your investment just to tempt you to move to a larger investment. Be aware and test the broker for months before move to a bigger investment. By this way you may possible not avoid the danger to be scammed at all at the end but definitely you minimize the chances.
The above seven indicative signs, that are logic, should help you avoid been scammed.
Definitely scammers are always up with new ways on how to defraud investors and traders therefore always be aware, do your search before sign a contact with a broker and always make your tests before engaging in large investments and trades.
No one can guarantee profits for you and if these brokers could really generate the large percentages in returns that they are offering and promising to you then why to share it with you? No one in real could offer you a better price than the price exist in the market.
Definitely trading in Forex is not always a scam. There are many professional firms, registered and regulated to providing Forex trading to clients.