Forex trading itself is not a scam but yes there are surely many scammers who use the forex market as a way to take benefits from unaware investors. These scams come in different forms, from careless brokers to fake trading systems. Forex market is risky sometimes with many scams too. Also forex market can be a valid and profitable form of investment, but unluckily, it is also a famous target for scams.
How to Forex Scam Work?
Forex scams many times involve the guarantee of impractical returns with little risk or no risk at all. Scammers will use high-pressure strategy to assure the investors to deposit large sums of money into a trading account, they will promise to use that amount as a fund to bring out guaranteed profits.
However, when you deposit the big amount then the scammers disappear, and the investor is left with nothing. Before entering in forex trading you should do deep research about this Market like is forex trading legal?
Some Common Forex Trading Scams
Some of the most common forex trading scams are mentioned below.
- Signal Sellers
- Ponzi Schemes
- Broker Scams
- Automated Trading Systems
- Trading Signals Forex Scams
- Avoid Forex Management Funds
- Unrealistic Promises
- Fake Bonuses and Promotions
- Unusually High Leverage
- Forex Robot Scams
- Blacklisted Broker
- Withdrawal Restrictions
- Guaranteed Returns Scams
- Personal Data Scams
- Price Manipulation
- Unsegregated Client bank accounts
- Investment Management Funds
- Aggressive Forex Brokers
- Pressure Tactics
- Unregistered firms
This type of scam includes unlisted firms that will offer you forex trading services without the proper licenses or regulations and documents verifications. If you want to know how to trade in forex you can check my previous article.
- Phony investment advisors
In this type of scam, scammers will themselves be involved as an individual posing as a financial advisor and will encourage investors to invest big amounts in forex trading without disclosing their own financial interests.
- Ponzi schemes
Ponzi schemes involve the type of scam that promises high returns with little or no risk. Investors are promised a return of their deposited amount with a profit. But instead of using the money to trade, they will use new investor’s money to pay the amount of earlier investors.
- High pressure sales strategy
High pressure sales strategy means the type of scam in which the scammers by using high-pressure tactics to persuade investors to deposit large sums of money as soon as possible.
- Refusing to withdraw funds
In this type of scam, the scammer refuses to return an investor’s funds, making it harder for the investor to withdraw their money on their own or with the help of any reputable broker.
- Automated trading system
Usually this type of scam includes an automated trading system that promises investors to generate profits, but in reality, it is a losing system and not any profit making trading system.
Some Tips to Identify Forex Scams
- Be careful before doing any investment and opportunity that promises guaranteed returns with little or no risk.
- Please never invest big amounts that you can’t afford to lose.
- Do deep research about the company and its management team before investing in it.
- Also check the registration of the company and regulatory status.
- Be cynical of any investment chance that needs you to deposit big sums of money quickly.
- Check the company’s reputation by reading online reviews and testimonials.
- Be wary of high-pressure sales tactics.
What To Do If You Have Been Scammed?
If you are doubtful that you have been scammed, the first step that you should take is to contact the appropriate authorities, such as the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). You should also inform your bank or credit card company to report the fraud and request a chargeback amount .
It is also necessary to file a complaint against them with the Internet Crime Complaint Center (IC3) and the Federal Trade Commission (FTC). Moreover, you should think about seeking some legal advice to understand your rights and options for recovering your funds.
It is necessary to remember that recovering your invested money can be very difficult and may need a lot of time and effort. Scammers often use strategies to conceal their identification and make it hard to detect them. However, by doing above mentioned steps like reporting the fraud and taking the appropriate legal action, you can help to reveal the scam and probably averts others from falling sufferers.
Conclusion
In conclusion, we can only say that forex trading can be a permitted and profitable form of investment, but it is very necessary to be conscious about the potential for scams. By being observant and taking the required precautions, you can save yourself from becoming a victim to a forex scam. Stay conscious, informed and safe in the market of forex trading.
