The forex market is the largest financial entity in the world. With over USD$15 trillion trading daily on the foreign currency market, opportunities are equally huge. But so are the risks involved.
Amateur forex traders may fall into the trap of thinking that forex trading, is an easy way to make loads of money without any prior training. It’s true that there are people who have made fortunes through forex trading, and it’s a fact that most of them invested time and money to get educated in forex trading first. Training for forex trading is more effective with on hand experience. Even in the field of forex trading, practicing makes it perfect, though risks remain to be a part of the game, navigating hands on is the best teacher.
To be honest, unless you are a professionally trained trader or have hired one, forex trading can be more risky than profitable. If you’re just starting, it is advisable to research, study and learn from the experts. Sailing on unchartered territories, like forex trading is really a risk, so if you’re looking at it as an opportunity, utmost knowledge and training is vital.
It’s important to know that the currency market, unlike the stock exchange, isn’t regulated by any central body per se. This has its advantages in how it operates, but it also makes it vulnerable to fraud and scams. There are signs that you can detect if it’s a scam, but discerning it ahead of time is the challenge.
How To Spot A Scam
Scammers generally operate the same way, they often follow a pattern and strategy. They would touch the most delicate part of a human’s mind, which is their desire for money and luxurious lifestyle. Promises of a successful investment will always be the highlight of your conversation, to get you invested to the idea fully.
The forex trading market is full of inherent risks that you’ll have to surmount through training, research, and experience. Most fraudsters know that this is a deterring factor for most people, so they will try to lower the cost of entry, and they will be presented with an investment opportunity that has less risks. Scammers do this to make it more tempting to people, making them believe that engaging with them has an assurance of success and risk-free.
The rest of this article will try to show you some of the subtle signs that you’re dealing with a forex trading scam:
1. They Don’t Have Proof To Back Their Claims
If a company has been in forex trading for as long as it claims, it should have the necessary documentation to authenticate its authority in the industry. Check their website for registration with relevant boards. You can also go the extra mile and check with the relevant authorities to see whether or not they are registered.
A legitimate forex trading service should be operational and they should have functioning systems, to back up their claims of first-class services. You need to know where they were trained and there should be visual proof of the said training, their track record should be accessible to the public and easy to trace.
“Snake oil” is a term that traders use to refer to these unregulated traders, or as we all know as scammers or fraudsters.
2. They May Spam You With Requests For Personal Information.
These fraudsters are after your money and they would try to move faster in scamming you before you discover the red flags and signs. They will start by asking for your personal information, while convincing you that this is just a part of the standard operating procedure.
This is why you should start verifying their credibility and qualifications first before dealing with them. Otherwise, you shouldn’t be handing them details about your location, contact number, and full name. You should also refrain from giving out your bank account details, because this may be used to wipe out all your savings in a flash.
3. Pressure, Pressure, and More Pressure
A good old tactic that fraudsters also use is applying a lot of pressure on the victim. And this pressure can come in many forms.
- Guaranteed Profits-There is no such thing as guaranteed profits if you’re into any type of investing, yet this remains a common trick. A scammer will tell you that there is zero risk in this investment, no matter the conditions. This is an absurd offer if you know anything about forex trading and how it works. Your trader holds zero control over the trading climate, making them unqualified to make such high-sounding offers.
- Unsolicited Offers– If this opportunity just landed in your inbox by a seeming stroke of chance, then chances are fraudsters are targeting you. A legitimate company will advertise its services ethically and allow you to come to them instead the other way around. If they are in your inbox already and you didn’t invite them, then beware.
- Pressure To Invest– Now that you and the company representative are engaging, and they are starting to pressure you to decide immediately, giving you less time to think things through. This is the part when you should slow down and make them wait. Always think that your hard-earned money deserves the best opportunity to grow. If they are legitimate company, they would wait and understand where you are coming from. Investing takes a lot of attention to detail and careful research, before you fully decide is the wisest decision to make.
Conclusion
Engaging into forex trading isn’t just a walk in the park. You need proper training, thorough research and hands on experience to be fully confident in investing in it. If you have this basic understanding, you’ll be able to assess and differentiate scammers from legitimate traders. Always trust your instincts and beware of too good to be true offers, because in the world of investment nothing is risk-free. More the reason, that it’s you hard earned money that you are investing, so being cautious is really important.
Author’s Bio
Grace Tan is an IT specialist. She’s been in the industry for 10 years. She writes blog posts and guest posts and sometimes conducts webinars to share her expertise. Grace enjoys her free time by traveling to different places and camping.
Also Read: What Are the Advantages of Investing in The Currency Market?
