As a whole, the Forex market has a daily turnover of over $5 trillion. Because of its huge size and lucrativeness, it has attracted both good and bad players. Good players are the ones who enter the market whose goal is to make profits honestly. Meanwhile, bad players are those who try to make money through shady ways, giving Forex trading a bad name.
Forex scams are probably the worst, and they also come in many forms. Let’s take a look at some of the sources of Forex fraud.
Dishonest Brokers
You will need a Forex broker to access the currency market. While there are brokers that do their business honestly and fairly, there are also those who operate to just steal money from their clients. They fraud their victims, who are mostly beginners, in different ways.
How do you avoid bad brokers? The first step is to do an extensive background check on the broker you plan to trade currencies with. Forex regulation is very important. Good and serious brokers usually mention on their site which regulating authority monitors their activities. Credible regulating bodies include the UK’s Financial Conduct Authority, Cyprus Securities Exchange Commission, and the Australian Securities and Investments Commission.
Forex Signal Sellers
Forex signal sellers provide traders information of the best time to enter and exit the market. Their systems may either be manual or automated. Signal sellers, who charge a daily, weekly, or monthly fee for their service, rely on technical or fundamental analysis or a combination of the two. Many analysts widely criticize signal providers because if their signaling system truly works, why would they make it available to the public? It would make more sense to keep the system themselves to make huge profits.
Forex Investment Management Funds
“Invest $1000 and I’ll double it in 2 days”. You have probably seen this kind of post on social media platforms. The Forex market has attracted self-proclaimed account managers who offer fund management and promise huge profits in no time. There’s no easy money in this market. Thus, if it sounds too good to be true, it probably is.
Also read: Swap-Free Accounts for Muslim Traders
