4 Easy Ways to Avoid Forex Scams
by Heather Johnson
Online Forex trading is attracting more people every day, making it easier for criminals to prey on the less experienced. The fact is, there are billions of dollars worth of foreign currency being traded every day. Not everyone who trades is that familiar with how the market works, so they fall victim to "get rich quick" schemes. Mind you, the con artists are becoming more sophisticated in their approach, so newcomers aren't the only ones who get fooled.
No matter how experienced you are in the market, you should take care to heed the following advice. Below are four tips for avoiding Forex scams.
1. Research Everything – You should have been using a Forex demo account before you started trading, as it is very important to learn everything you can about how the market works. While it is true that anyone can trade currency, that doesn't mean that everyone should trade currency. It takes research, discipline and common sense to make sensible decisions and avoid being scammed.
2. If It Sounds Too Good To Be True, It Is – You have no doubt seen a pop-up ad or obnoxious banner that promises something ludicrous like "500% Profits in 2 Days!" While you may be wise enough to ignore such promises, there are more subtle versions of the bogus "guaranteed" Forex investments. Remember, there is no such thing as a guarantee on returns. Otherwise, everyone would be putting his or her money into currency trading.
3. Deal Only With Reputable People – You need to be placing orders with trusted, proven professionals and not someone you met through a pop-up ad. Forex trades should be made through a registered broker/dealer exchange, bank, insurance company, or other reliable financial institution. Always research the business/person you are dealing with to make sure they aren't trying to scam you.
4. When In Doubt, Consult The CFTC – The Commodity Futures Trading Commission, or CFTC, can be your guardian angel. The CFTC's official site has great information on Forex scams, known offenders and how to retaliate if you feel someone is trying to take advantage of you. In the United States, the CFTC has federal authority to investigate and take legal action against corrupt Forex brokers.
You should never stop learning about the Forex market and how the world's events affect currency. The more authoritative your knowledge of currency trading is, the less likely a bad broker will scam you. Not only should you be diligent in protecting yourself, you should report any shady business deals you come across, as you may save the next investor a heap of trouble and money.
Heather Johnson is a freelance business, finance and economics writer, as well as a regular contributor at Business Credit Cards, a site for business credit card and best business credit card offers. Heather welcomes comments and freelancing job inquiries at her email address
heatherjohnson2323@gmail.com.
Online Forex trading is attracting more people every day, making it easier for criminals to prey on the less experienced. The fact is, there are billions of dollars worth of foreign currency being traded every day. Not everyone who trades is that familiar with how the market works, so they fall victim to "get rich quick" schemes. Mind you, the con artists are becoming more sophisticated in their approach, so newcomers aren't the only ones who get fooled.
No matter how experienced you are in the market, you should take care to heed the following advice. Below are four tips for avoiding Forex scams.
1. Research Everything – You should have been using a Forex demo account before you started trading, as it is very important to learn everything you can about how the market works. While it is true that anyone can trade currency, that doesn't mean that everyone should trade currency. It takes research, discipline and common sense to make sensible decisions and avoid being scammed.
2. If It Sounds Too Good To Be True, It Is – You have no doubt seen a pop-up ad or obnoxious banner that promises something ludicrous like "500% Profits in 2 Days!" While you may be wise enough to ignore such promises, there are more subtle versions of the bogus "guaranteed" Forex investments. Remember, there is no such thing as a guarantee on returns. Otherwise, everyone would be putting his or her money into currency trading.
3. Deal Only With Reputable People – You need to be placing orders with trusted, proven professionals and not someone you met through a pop-up ad. Forex trades should be made through a registered broker/dealer exchange, bank, insurance company, or other reliable financial institution. Always research the business/person you are dealing with to make sure they aren't trying to scam you.
4. When In Doubt, Consult The CFTC – The Commodity Futures Trading Commission, or CFTC, can be your guardian angel. The CFTC's official site has great information on Forex scams, known offenders and how to retaliate if you feel someone is trying to take advantage of you. In the United States, the CFTC has federal authority to investigate and take legal action against corrupt Forex brokers.
You should never stop learning about the Forex market and how the world's events affect currency. The more authoritative your knowledge of currency trading is, the less likely a bad broker will scam you. Not only should you be diligent in protecting yourself, you should report any shady business deals you come across, as you may save the next investor a heap of trouble and money.
Heather Johnson is a freelance business, finance and economics writer, as well as a regular contributor at Business Credit Cards, a site for business credit card and best business credit card offers. Heather welcomes comments and freelancing job inquiries at her email address
heatherjohnson2323@gmail.com.
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