When you start in the forex market, you might be overwhelmed by the sheer number of products and services on offer. There are several ways to get involved and make money, from high-yield investment programs (HYIPs) to signal sellers. However, it would be best to be cautious as there are also several forex scams.
The forex market is awash with scams. While some brokers are genuine and offer good old-fashioned service, others are shady business ventures focusing on cryptocurrency and the like. Aside from these, the best way to protect yourself is to be careful of who you do business with. Don’t hesitate to contact your local law firm if you find yourself in a scammer’s crosshairs. They will help you navigate your way out of the financial maze.
The most important thing to remember is to do your homework before making any significant financial commitment. Don’t get suckered into the nimblest of schemes. Doing your homework can save you hundreds of dollars. Plus, you’ll be armed with the knowledge you need to pick reputable firms from shady ones.
Unachievable and unrealistic investment dreams
One of the best aspects of trading the forex market is the lack of regulation, making it an ideal playground for those who are too hot and bothered to do the requisite due diligence. On the other hand, a naivete can easily result in losing a hefty chunk of change. It pays to arm yourself with some helpful knowledge to avoid these pitfalls and maximize the rewards. The best way to do this is to invest in an intelligent advisor, which can be found in a local forex trading club. Fortunately, these specialists will not only guide you through the mines of gold but will also be there with a boodle to spare if needed.
High yield investment programs (HYIPs)
HYIPs are one of the rifest scams in the Forex market. These fraudulent programs promise high returns with a minimum risk. Instead, the money that is initially invested is diverted to the operators’ accounts.
HYIPs often involve trading fictitious financial instruments, such as prime bank securities, futures, and gold. The scammers promise high rates of return, but the promises are often too good to be true.
These programs are usually operated through social media, and the operators are motivated to convince investors that the program is legitimate. However, they are prone to hiding their identity and the underlying management of the investment fund.
They usually claim to offer very high returns, sometimes as much as 100% per year. In other cases, they may be involved with banking or offshore trading companies.
Trading with a brokerage regulated by a prestigious regulatory agency
When you deal with a brokerage regulated by a prestigious regulatory agency, you can be confident of its legitimacy. But a broker’s license can be revoked or suspended for several reasons.
The first thing to look for in a broker’s credentials is a track record of success. If the firm has consistently made money, you can be assured that it is legitimate.
You can also check out the websites of a regulatory body to see if there have been any cases against the firm. A good firm should be able to provide proof of its legitimacy and a list of regulated companies.
Another good indicator of a reputable firm is its ability to meet your trading requirements. Traders should be able to withdraw their funds and should be able to make trades without the need for technical expertise. However, the Forex market is volatile and can be risky.
Recovering from a forex market scam
If you have been a victim of a Forex market scam, you can try to recover the money you lost. Unfortunately, it will not be easy. There are a lot of complicated procedures involved in this process.
The first thing you should do is contact your credit provider to reverse the charge. You may also want to report the scam to the appropriate authorities.
You should then check your financial institution’s records for any transactions involving fraudulent brokers. Your bank’s chargeback feature protects you from any potential broker scams.
If you suspect you have been a victim of a forex scam, you can file a complaint with the regulatory authorities in your country. For example, you can do so in the United Kingdom with the Financial Conduct Authority.