Avoiding Forex Related scams and frauds

Avoiding Forex Related scams and frauds

A lot of people are "burned" by scam operations on the Internet. Their sites may look so perfectly legitimate to doubt whether they'd gone through all that trouble building a trading platform just to steal your money. Beware.

The first thing I look for is the geographical location of the broker. If you find that are based in a country where the financial industry is, in my opinion, relatively unregulated and under-developed, I quickly abandon register. This is terrible news for honest brokers in these countries, but your job as a trader is to protect your capital. If you lose, then it can not be traded. Onus is on them to convince you that they will do the right thing by you as an investor.

I started with an Australian broker. I am currently using the U.S.. I have not tried UK-based brokers but the British financial industry is one of the best. Companies that are based in countries like Japan, Germany and France are probably just as good too, if their website speaks your language.

Note any registration number, they may have registered with the regulatory bodies that act as government watchdogs who oversee the finance and investment industries. These are organizations that impose strict rules to protect your investment. Some of these rules may include a request brokers segregate all users of funds from operating funds of the business. Your money is needed to bring in highly reputable banks and funds are only withdrawn from these accounts to specific requests for withdrawal.

Consider that there are some false regulatory bodies are thrown around in cyberspace as well. Take a look at how long they work for. Try and catch any criticism or comment on them. See if you can find forums where traders have discussions about their brokers.

Below is a list of things to keep in mind to help you avoid being a victim of fraud:

o Stay away from opportunities that sound too good to be true

There are people who may have just acquired a large sum of money only, and recently the same and are shopping around for a safe investment vehicles. These may include retirees who have access to their pension funds. It is understandable why retirees would be drawn from "high-return, low risk investments. This is also what makes them very vulnerable. If you identify yourself to be one of those people, be careful. Many false signs are after money. Also, take a small amount of money for trading until you can start growing it. Not all people can trade successfully, so it is a venture should take on haphazardly. It's your life savings at risk.

o Avoid people or organizations that claim to predict or guarantee large profits

Any form of trading is difficult. Trading currencies is no different. Be wary of statements that make it sound easy. Statements such as:

o "Whether the market moves up or down, in the currency market will make a profit;

o "Make $ 1,000 a week, every week;

o "We are carrying out 90% of domestic investment;

o "We will make returns of 70% a year;

o "There is no risk strategy."

If they can make such returns, why would they ever allow you to know about it.

o be wary of companies that minimize investment risks

Hold your wallet tight and zip up your purse when companies say that written risk disclosure agreements are routine formalities imposed by the government. Watch out for statements such as:

o "with a $ 10,000 deposit, the maximum you can lose is $ 200 to $ 250 per day;

o "We promise to recover any losses you have."

o be wary of companies who claim that trade with 'Interbank Market

I do not believe that when some people say that they have access to the 'Interbank market "or that they can give you access to trade in that market because that is where bargain prices can be obtained. This is not true. The" interbank market 'is not a place that is not physical objects. It is only a loose network of currency transactions negotiated between large financial institutions and other large companies.

o Ethnic minorities are often targeted

Ethnic newspapers and 'infomercials' TV is sometimes used to attract Russian, Chinese and Indian minorities. Sometimes these ads offer so-called "Job opportunities for account executives to trade foreign exchange," according to which recruited "account executive is expected to use his own money to trade currencies and can often be encouraged to recruit members, their friends and family do the same.

o require the Association Background

Check any information you receive to be sure that the company is who they claim to be. If at all possible, try and get back to people who run the company. Do not rely solely on oral statements and promises by the employees of the company.

o If you are in doubt, not worth risking Money

If after trying to solicit information and at the end of it all, you are still in doubt about the credentials of a particular company, my suggestion is to start looking elsewhere.

You can find more information by calling "security" mode because they keep in touch with trends and reports regarding scams and other fraudulent activities. Please check the resource section of this site for information from organizations that regulate the securities industry, sorted by country. There is also a list of brokers that you may want to look.



Previous Article
- Introduction to Forex Trading