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NO23 - How To Protect Yourself From Forex Scams

"Forex scams are something that you will come across. It is quite likely that you will be smart and avoid these scams or let greed get the better of you and end up as a victim of a forex scam. Because the forex markets operate in an online environment, it is easy for scammers to set up a trap and play on the greed of traders. Remember that there are no shortcuts to success and forex scams basically operate by giving you the shortcut. The sooner you realize this, the easier it is for you to avoid such forex scams. In this article, you will come across some of the most common forex scams that we will also show you how you can avoid such scams early on. The sooner you are aware of this, the better the chances that you will not end up being scammed. The main takeaway from this article is that you need to keep your expectations from forex trading in check. The moment you let your emotions take over is when you will start to walk right into the trap of the various forex scams."

As a beginner to forex trading, chances are that you have not yet experienced a forex scam. However, as you advance as a trader, there are circumstances where you will come across a scam at some point.

In order to avoid scams, you need to be alert to the signs that will start to tell you that it is likely a forex scam. As the old saying goes, if its too good to be true, it probably isn’t, most of the forex scams start off on a similar note.

What are the type of scams that you will come across?

There are many different scams in fact and we can’t quite name them all. Still, within the forex world, here are some of the most common scams that are widely prevalent these days.

The forex broker scams

The forex broker scams the most common of all. The first sign to spot such as a scam are those type of forex brokers who are domiciled in offshore jurisdictions. These forex brokers set up their office where regulatory oversight is non-existent.

While there are so called “local regulatory authorities” these are very lax and allow the forex broker to get away with the scams. We should mention however that not all forex brokers domiciled in offshore jurisdictions are scammers. But still, the lax nature of overnight gives many forex brokers a reason to set up shop there.

It is partly because of lower fees and the ability to circumvent the regulations put in place. These forex brokers are not subject the intense scrutiny that other legit forex brokers are put to. As a result, you will find scams such as the forex broker giving you a worst price than what you put in while placing your market or limit orders.

Stop hunting is also a common feature among such forex brokers who tend to trip your stop losses intentionally. And there are also instances when you want to withdraw your profits but the forex broker tries their best to prevent you from withdrawing funds by citing a breach of terms and conditions.

The forex product scams

The forex product scams are more in number compared to forex broker scams. Because every trader dreams of getting rich quick, forex product scams are easy to set up. They come in various forms and types.

For example, you will find product such as expert advisors or courses that promise to make you a better trader. However, this is not always the case. In many cases you will find out that the product is already freely available.

There are also forex signals services. These services claim to make money for you by sending you trading signals. These trading signals of course don’t really work as promised or advertised.

Thus, when you realize that you have been scammed and want a refund it is quite unlikely that you will get a refund if any. For the most part, anyone with an internet connection and a website can simply claim to provide you with the best service there is. This tempts many forex traders into falling for the trap of riches and end up losing more money.

You will also find other services such as automated trading systems. In these cases, the product seller will sell you just dreams on the performance of their trading system. These trading systems can vary from just under $5 to as high as a $1000.

After using the system for a while and understanding that it doesn’t work as promised, the seller is nowhere to be found or even worse, you would be shown the terms and conditions page which is designed to prevent the buyer from claiming an refunds.

Why are there so many forex scams?

There are so many forex scams for the simple reason that traders are greedy. If given a choice between spending time to learn the markets or a choice of taking the easy route, many prefer the easier option.

There is a fundamental flaw that traders are greedy and it is this greed that makes many traders to ignore the logical signs and fall for the traps. The traps are of course a lure to capitalize on the traders’ greed.

If you closely observe the many scams that are listed on many forex websites, you will find that these scams could have been avoided had the trader been thinking logically rather than chase the dream of getting rich.

Our forex trading course is designed to help the reader to be more mature and to avoid such type of scams. To be successful in forex trading, you need to give it time and also put in a lot of efforts. You cannot expect to become rich overnight by trading forex, which is the exact selling point for many such forex scams.

Read 897 times Last modified on Sunday, 12 May 2019 08:42