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The forex market is huge, here is how to avoid being scammed


14th Oct 2019 Managing your Money

The forex market is huge, here is how to avoid being scammed

With its over $5 trillion worth of daily trades, the forex market is, without an iota of doubt, the largest financial market on the planet.

The world of forex presents individuals, investors, and corporate organisations with an opportunity to put their money to work for them. However, not only does the market allows banks and corporations to trade with one another, or individuals and groups to engage in daily trades, but it also leaves room for scammers and speculators alike to monitor the market developments and also take advantage of newbie and incompetent traders. With the evolution of the digital age, there is no better time to engage in forex trading than now. Nowadays, with just a single click of a button, one could be trading different currency pairs and earning millions in profits. Such is the ease with which one can really make money via the forex market.

However, the market is not without its downsides. And one major downside to trading forex online is that of unscrupulous individuals who try to scam traders on the forex market even though such traders are working with the best forex brokers UK. So, brace yourself if you are just joining the forex world – the market is not without scammers.

In this light, we’ve compiled a list of tips to help you deduce the activities of scammers on the forex market so as not to fall victim to forex scams.

Signal sellers

As a newbie trader or investor, one of the biggest challenges you are likely going to face is the determination of the operators to work with and the ones to run from. 

  • Quick Tip: Be careful of signal seller operators

Usually, a signal seller group will approach you with a system offer that is supposed to help you identify favorable times for trading currency pairs. The proposed system may be manual or automated. If manual, you will be asked to input your trading info, but if automated, your trade will be placed once a signal occurs. Regardless of the system a signal seller group adopts, they all purport to provide info that leads to winning trading opportunities. Typically, signal sellers might charge you a daily, weekly, or monthly fee for their services. While this may sound like a fair trade, it isn’t. In fact, ask yourself this: if it were really possible to beat the market with their system, why share such valuable information with the public when they can use it for their own benefits alone? Wouldn’t it be more profitable for them to use this fantastic signaling system to earn massive profits themselves?  Be careful of signal sellers! 

Forex investment management funds

Maybe it worked well in the past; not anymore! In fact, nowadays, most of these supposed forex management funds are nothing but scams. Usually, they offer you an opportunity to have your forex trades conducted by highly-skilled forex experts who have the ability to earn a lot of returns in exchange for a share of the returns. The offer they propose to you will require that you hand over your money to someone you know so little about other than an over-hyped reputation and a completely falsified record of success and testimonials on their websites. More often than not, these supposed experts are basically scammers, and they leave investors with nothing in the end. In fact, most of them are nothing but over-hyped individuals who live off the fat or newbie investors and traders alike.

Dishonest brokers

Although the forex market is not without its rules and regulations, it has no general or centralized regulatory authority. Additionally, the forex spot market, which is responsible for most of the trades happening on the forex market, is completely unregulated, which leaves a loophole for unscrupulous brokers to exploit. Consequently, these kinds of brokers find a way to cheat, defraud, and scam their customers. Since all of your trading activities in the forex world hinge on the kind of broker you’ve chosen to work with, you cannot afford to choose to work with a broker that is dishonest, unfair, or a scam. So what do you do? In simple terms, find the right brokers to work with. Beyond the traditional strategy of searching a broker’s website, you can tell whether a broker is genuine or not by checking their regulatory status. Some of the best regulatory bodies for brokers include NFA, CFTC US, ASIC, and the FCA. So, before you choose your broker, be sure that the broker is regulated by some, if not all, of the strict and reputable financial regulatory bodies. One very good broker that ticks all the regulatory boxes mentioned above is the IG forex broker.

Conclusively, as a general rule in the forex market, if the offer sounds too good to be true, like an annual return of over 100%, for instance, it's almost certainly a scam.