The daily trading volume in the forex market has reached $5 trillion, making it a huge market. That size of the market and not really advanced level of regulation allows many scams to happen. Therefore, as a trader, you have to learn ways to avoid forex trading scams.
The scams usually happen through secret trading formulas, forex robots or algorithm-based proprietary trading methodologies. Here are how you can avoid forex trading scams.
Signal Sellers
A signal seller offers services aimed to identify the favorable time to buy or sell a currency pair. They usually use a traditional system where users need to enter their trading info. Later, that may be automatically put through a trade when a signal appears.
Their system usually relies on several things, like technical analysis, breaking news, or the combination of those two. They usually charge a daily, weekly, or monthly fee for their services.
Many criticize this system since it can easily beat the market. While other analysist differentiate between the known scammers and reputable sources of market information that offers good signaling services.
Phony Forex Investment Management Fund
Up to these days, there has been proliferation of forex management funds, yet most of them are scams. They usually offer the chance for investors to have a highly-skilled forex trader carries their trades.
The biggest problem relies on the requirement for investors to fully give up control upon their money. They ask the customers to give up all of their money to someone they knew a little about.
Most of the time, investors left with nothing.
Dishonest Broker
The forex market does not have one central regulating authority. Consequently, some forex brokers do not deal fairly with their customers. Some of them even defraud customers.
To avoid bad brokers you can search on the basic website. Other than that, you can choose the brokers who also deal with stock market trade. They usually have the license which will not be thrown away by defrauding their forex customers.
Also read: Psychological Factors That Lead to Your Demise in Forex
