We are aware that the Forex/Crypto Trading market is the largest financial market in the world, with over $5 trillion traded every single day. We know that at the click of a button you could be trading on the direction of the Euro, British pound, Japanese Yen, US dollar or hundreds of currency pairings. However, while the financial gains of trading the forex market seem lucrative, it’s not considered easy. Sound trading education, properly funded trading account and understanding of risk management techniques are essential.
For these reasons, many individuals are not willing to make the sacrifice necessary to learn professional forex trading. They prefer to give out their money for others to trade on their behalf. Unfortunately, there are many unscrupulous individuals who will try to scam others through forex trading scams. On this second part on our forex/crypto scam series, we are talking about the popular forex investment scams.
There are many adverts nowadays promoting phony forex trading investments scams and phony forex investment funds. In essence, a slick marketing message or salesperson will sell you on the phantom, or unverified results, of their forex fund. All you need to do is send them your investment, and you can sit back and enjoy the returns. Of course, many people who send their money over often never see it again. In some cases, the company says they’ve never heard of you and have not received any funds from you. What started as a forex trading investment scam now turns into one of those money scams.
Another outcome, is that they open an account for you, usually with an unregulated shady broker. However, after a few trades, they wipe out your account. While they blame it on the market, it’s all gone to their brokerage company. And, because it is unregulated, it’s very difficult to get your money back – just another type of currency scam.
How To Spot A Forex Trading Scam
The most important giveaway of a Forex scammer is the guarantee of unusually large profits with little or no financial risk. First of all: there’s no such thing as a 100% guarantee. If there was, there’s no way traders would share it with other market players. Some of these offers may sound very attractive, especially to beginning traders. But as the saying goes, the only free cheese is in the mouse trap. The bottom line is this: if something sounds too good to be true, it probably is.
Here are few simple rules to follow in order to avoid scammers:
Remain safe and don’t run after empty promises.
Be especially wary of software that claims to have found a ‘secret formula
Do not install any programs until you are certain they won’t damage your computer
Another giveaway is that scammers never register with any regulatory authority.
Beware of placing your hard earned money with an unregulated hedge fund manager or forex investment company. Do not be deceived by promises of high yield returns.
Why You Should Educate Yourself To Avoid Trading Scams
As Forex trading carries exceptionally high risk, losses are inevitable. Retail traders are almost always trading undercapitalized, and are subject to the problem of gambling addiction and improper use of leverage. Any trader who trades without skill is essentially playing against the market as a whole, which has nearly infinite capital, and they will almost certainly go bankrupt as a result. In all fairness, a large number of the reports of money being stolen by brokers is a result of weak trading, and not scam brokers. If unskilled traders spent time developing a proper trading methodology, they would become better traders much quicker, and would likely avoid Forex scammers altogether, as they would be suitably informed about the potential risks and what to avoid.
Most retail traders should be able to use almost any trading platform with any broker, and see very little difference in their results – it’s that simple. Once you accept your losses, trade with a trading system, and master your market, it will be much harder for you to fall for a scam. In conclusion, to avoid the risk of falling victim to forex investment scams, choose to become a professional forex trader.
Get yourself a good mentor and acquire the unique skillset. Beware that forex trading is a profession and you are dealing in the world’s largest financial market. As such, trading isn’t a walk in the park. You should be ready to maintain self discipline and not approach the market as a get rich quick scheme.