How to spot Forex Scams and avoid them?

Forex scams idoforex
Forex scams idoforex

Foreign Exchange Market (Forex) has been the world's largest market so far. So there's no wonder there are plenty of Forex trading scams happening. Although the authorities have taken steps to protect the Forex market from such scams by heightening its security, it seems that there are still out there. So there is a possibility that you might too be vulnerable to these Forex Scams.

 

 

Forex scams may come in different forms. Hence, there's no such way we can name that this or that is the only method that might come as a scam. Yet, there are some ways to sense and spot the scammers.

If you are a beginner it might have already been little difficult to identify due to your lack of Forex knowledge and experience. But as you go further with this article you will find it's not that difficult. Mind you, you will have to be cautious and learn Forex gradually.

1. If a broker says that it directs you to gain huge amounts of profits without risks, then you have to be very cautious. Why? Because, Number one, Forex Trading itself is full of risks. Number two, There's no way you can trade without risks. But having a proper knowledge of it and practice you can minimize them. And number three, Forex is about making predictions. So no one can assure or promise of a future market change.

2. The next way you can sense of a Forex scammer is, that the broker or the account managers or the partners promise you a hundreds of pips in a day with no risk. The rationale behind why this should be sensed as a scammer is that if they are capable of giving that kind of an offer to you, why others can't and why they are trying to sell their own system to you? makes sense right?

3. The other way to sense a Forex scammer is that they do not reveal a license or the regulatory authority on their website. If a Forex manager or a broker has this license, why are they not displaying it. Because, if they are doing a business, and if their objective is to gain profits by delivering a service to their customers, showcasing the license inevitably attracts customers to them by building trust. Why have they given up such a valuable strategy in their business? That says something isn't it?

4. Most scammers do not reveal much about their organization their location and other background details. Having said that, we cannot say that all the organizations that have mentioned their location is not a scammer. Because it's just about updating their website. So take a careful notice on their country of origin or the headquarter's location falls under highly regulated Forex countries and do bit of research whether they are visually available in somewhere else; in videos, their advertising, marketing campaigns, webinars, tutorials etc.

Spamming your emails and messages with unprofessional tone of speech containing so much of exaggeration and unreal sounding facts or promotions could be another way of a spammer's reaching you.

Apart from this, if an email or an SMS asks your personal details without the name of the sender's name and there seems to be other way of contacting them, it could probably be a scam (Usually the licensed and professional companies have an established support center communicated on their platform or site and they are always professional in communicating)

Learn Learn Learn

What makes you rich first is, learning Forex. Because then you know what exactly Forex is and how it behaves and how to apply Forex strategies in order to expect profits. If you are a beginner, we suggest you to start from the very beginning. Forex Basics. 

Carefully Study the Forex Broker/Provider

If you come across a Forex broker or any other provider, check the following

  • where are they based?
  • how many branches across the world are being operated?
  • Is it regulated by an authority?
  • Does it have a valid license from a regulated body?

The answers to these will keep you in the safe side.

Get the Forex Broker confirmed

Websites can say that they have Forex license. Because usually the people do not cross check them. So if you have doubts of whether a broker/a manager has a license or feel like you are being scammed, just get it confirmed by the regulatory body of that country. Popular Forex regulatory bodies are as follows.

  • USA - CFTC (Commodities and Futures Trading Commissions)
  • United Kingdom - FCA (Financial Conduct Authority)
  • Australia - ASIC (Australia Securities and Investments Authority)
  • Cyprus - CySec (Cyprus Securities and Exchange Commision)
  • South Africa - FSB (Financial Services Board)
  • India - SEBI (Securities and Exchange Board of India)
  • New Zealand - FSP NZ (New Zealand Financial Service Provider)

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