Scammers have found their way in every business transaction, even in foreign exchange or forex. With trillions of money traded daily worldwide, scam forex brokers try to find their way into this lucrative business.
1. Absence Of Proof
Instantly avoid so-called traders who cannot provide you with proof of their trading background. Most of them even try to avoid answering if you ask them about it. These scammers, who are called “snake oils” are false traders who cannot present any proof of their trading history.
2. Email Spam
Never answer an email asking for personal details like full name, phone number, and home address. Do not immediately give this information to anyone. Ask for and thoroughly read a written risk disclosure statement from your broker.
3. No Background
Never make any deal with anyone who does not want to provide information about himself. You may do an online background check on a person or company to ensure that it is legit.
Types Of Forex Scams
1. Robot Scams
These are forex robots using expert advisors (EAs) as trading platforms. However, there are some legit Forex robots; thus, check online or visit trading community sites like TradeWise for robot scams list.
2. Signal Seller Scams
These scammers often ask for subscription fees to have access to the trading signals they offer. Remember to ask for their verified trading records to ensure legitimacy.
3. Phoney Trading Investment Scams
Some scammers will sell you forex investment funds through their sweet talks. You only need to send them the investment money, and you don’t have to do anything else to reap the returns. Beware, you may never see your invested capital ever again.
How To Avoid Forex Broker Scams?
Here are some tips on how to avoid forex scams:
- Do not rush in studying and assessing all possible investments.
- Verify the legitimacy of brokers.
- Look for online reviews from previous clients.
- Never believe promises of implausible high-returns.
- Ask a licensed financial advisor for guidance.
Even with the existence of laws against forex scammers, many people still find an opportunity to deceive innocent traders. You must know how to arm yourselves against scammers by keeping yourself informed. Reading stock market reviews, trading reviews, and Forex reviews might help you find the necessary information about the forex industry.