According to the financemagnates.com Forex journal, in 2014 the average daily volume (ADV) was 5.5$ trillion, that makes the currency exchange markets the most lucrative financial market in the world. Such huge money flow obviously attracts some unscrupulous people looking to take unfair advantage or scam people. The authorities are doing their utmost to stem the tide of Forex scams, but there is only so much even they can do. This is why all Forex traders need to learn how to recognize and avoid such persons and any deals they might have to offer. At this point, it does not matter what types of Forex scams there are, but how to recognize scams when you see them.
Whether your “broker” is trying to overcharge you for the services he or she actually provides, or falsely advertises promises of huge success and their proficiency only to steal the money you forward to them, or sells fake Forex robots and trade signals, you need to be prepared to protect your financial interests. Always be skeptical of the promises your broker makes, even if he means well. Promises don’t always come true.
Where did we go wrong?
There are many things people overlook, especially if they have no real experience with Forex trading. For one, they pay inflated prices for broker services and trading software that may not even be legit. The broker needs to be verified as much as humanly possible, to make sure they are who they claim to be. People also put trust into “reliable” customer experiences, never realizing that such testimonies can be bought and sold and are no guarantee unless you actually know the person and trust them. People fall for empty promises of wonder machines that will make them money by themselves. Those are probably the people who fell for the story of Jack and the magic beanstalk; guess nobody told them it was a fairy tale. In any case, most of that software has never been tested, probably because it would never stand up to scrutiny and its peddlers know this. And even if they work, their price can be shamelessly steep: thousands of dollars instead of hundreds. Besides that, people can’t be bothered to separate accounts. It may be a drag, but unless you do that, there is no effective way for you to track your performance.
What to look for in Forex scams:
When you are being scammed, your broker will not let you retrieve your money; there will always be a glitch, or a reason you can’t make a withdrawal when you want it. There will always be a reason you can’t enter or exit a trade when promises turn to be “wrong”. However, once you do fall for their sweet-talk, there is little chance of retrieving your money, even if the fraud is proved in court. The best course of action is to use verified brokers and trade small, until you make sure they can be trusted. Forex scams are constantly changing, so make sure you keep up.