Forex Scams / Forex Fraud

One of the best ways of making money is to invest in the foreign exchange market. This is perhaps the largest and most liquid market in the world. Nowadays, more and more people are getting involved in trading currencies and earn their living. As this market is gaining its popularity, forex scam artists are also trying to cash in money from this business. There are ways to identify these scammers.

forex-fraudThe first step is to check out that your preferred Forex broker is accredited with the United States Commodities Futures Trading Commission (CFTC). You can also look for the regulator’s certification on your broker’s website and contact the CFTC to check the authentication of your broker. You must always check the legitimacy of your Forex broker so that you don’t end up getting scammed and lose all your money.

Next, if you see outlandish claims that are guaranteeing high profits in no time, then you need to stay away from them. There is no shortcut in trading currencies. When you are investing money in the forex market, you need to be very much dedicated, investigative, have good analytical skills, knowledge of economics, and consistence practice. This will make you an experienced trader in the Forex market. If you see any scheme that is assuring ridiculous guarantees through unsolicited calls, you need to be careful enough.Forex scams

Another way of identifying a forex scam is when you see a promotion that guarantees little or no financial risk in trading currencies. There is no such investment that does not have any risk involved. Forex Scam artists will always give you false hopes and guarantee that your investment is secure, or they will invest your capital in the “Interbank Market” and so on. Stay away from people who make such promises. Even the professional traders cannot guarantee that their money won’t be at risk in any given day. It is very hard to predict the foreign exchange market and thus you need to stay away from people who are giving false promises.

If you see a firm that is not trustworthy, then it can be a possible scam. You must check the background, physical address and the performance record of the firm before investing your money. If a firm has the intention of scamming people, then you will find many horror stories about them on the internet. Similarly, a legitimate business will be having all their information with the local law enforcement agencies. Hence, it will become easier to distinguish between a genuine business and a scammer. Stay away from the firms who make bold claims about how successful they are in the Forex market, but unable to prove it in papers.

Resources:

http://en.wikipedia.org/wiki/Foreign_exchange_fraud