Forex trade scams are rampant all over the Internet. The Forex market is the biggest financial market in the world with a daily turnover of more than a trillion dollars. Most people who are new to Forex trade assume that the market is a gold mine waiting for them to grab a piece of it at any given time. In order to make money, you must learn how to analyze currency trends, determine appropriate risks and take proper action. If you get involved in any scams, you will only be wasting your time, money, and even your reputation. Learn how to recognize the different Forex trade scam types so you can avoid becoming one of these victims.
A forex trading scam is an obviously false claim. The usual scam is that a broker promises huge profits with little effort required. A real forex trading system is not a get-rich scheme. A genuine broker will always try to convince you to go ahead with his services, showing you all the benefits you can get with the system. A fake broker will only offer you a limited-service, promising big returns and fast payouts, but in fact, they could only give you a fraction of what they are offering.
Another common scam is that a broker will promise very low spreads, but will charge you much higher fees. These brokers make a tidy profit by charging high rates to novice traders. They convince traders that they need a lot of money in order to get started in Forex trading when actually they only need a small amount. If you choose this kind of broker, do yourself a favor and move on to the next one.
The most common Forex trade scams involve the use of fake certificates. If a broker offers you a certificate that purports to be from an institution, it is usually a fake. There are some brokers who use certificates that say ‘Bank Of America’ or ‘HSBC’. Make sure that the broker’s name is not on this certificate.
Forex trading involves the purchase and sale of one of the world’s leading currencies, the US Dollar. Some scammers will pretend to exchange your currency for another currency in order to fool you. You should never pay for a service to transfer funds; such as the transfer of your Forex broker’s funds to your account. Such activity is referred to as wire fraud. Such scams are extremely dangerous and should not be taken lightly.
A third common type of Forex trade scam is the creation of fake trading platforms and manuals. These manuals are often sold along with a trading platform and broker. If you are not comfortable with the technical aspects of forex trading, it is advisable that you do not purchase manuals or any other products that purport to offer you a simplified version of the market. If you take advice from someone who has traded successfully, you can gain a lot of useful insights from them.
Fourthly, there are some forex scams that involve the use of secret ‘robot’ programs. These are not real robots, but only programs that are designed to automatically place and close trades for you. If you think about it, if this were actually possible, it would free up a lot of your time. Why would a broker provide you with such a program? Again, if you do not want to lose money through forex trading, it is advisable that you do not purchase any product that advertises automatic trading.
Finally, another type of Forex trade scam involves a pushy sales letter. The scammer wants to sell you a product, such as a manual, but he or she does not want you to learn how to actually trade. Therefore, the product that they are selling you comes with a money-back guarantee. As you are trying to protect yourself from losing money, you should purchase the product and receive the money-back guarantee. The best way to do this is to find a broker that offers a good reputation and a long list of happy customers.