How to protect yourself from Forex Scams?
2 min read
In recent years, the forex industry has bloomed to be a multi-billion-dollar industry. It has hundreds of regulated brokers. Per day trading volume is worth around $200 billion dollars.
Though it is a consistent industry, some malpractice participants and frauds are bringing in complexity. Another reason can be the scam and fooling new traders or investors.
These scams can be cut down by the regulators but sometimes due to void of correct information on scam and of local guidelines, traders are often deceived.
You must be careful of the these following scams:
- Unregulated and dishonest brokers
- Forged forex signal seller scams
- Forex robot
- Trading system scams
- Unreliable investment schemes and funds
Now the question arises how to maintain distance from these scams. The following article will enlighten you with the methods.
- The foremost and the most important to distant from scams is to educate yourself. This means you need both the theoretical as well as practical knowledge to sustain in the industry. Familiarize yourself with how the industry works and learn from how the experienced traders conduct their trades and also about the technical analysis, fundamentals & the risks of forex trading, and the market players like regulators, brokers. You can even appoint an adviser who will guide you in the matter.
- Another acclaimed way is to start trading with a demo account. A demo account helps to you gather clear perspective of the practical experience of trading in a real market environment. As the name suggests, there will be zero risk of losing your money.
- As mentioned earlier, the industry is full of scams and frauds. They make too surreal commitments too come true. A good trader is not made in a day. Years of experience and volumes of knowledge make a good trader. No shortcuts are there in the process.
- Do not trust every broker you come across. It is mandatory to trade with brokers who are regulated by the government authority. The major regulators of the forex industry are the FCA of the UK, CySEC of Cyprus, NFA of the USA, ASIC of Australia and others. Before signing up, do some research on the regulator and his or her policies.
- Another thing to look for in a trustworthy and experienced broker is to check the reviews on reliable websites, the track record, forums for user review and other experienced trader. Though no forex broker has astoundingly positive reviews, you should look for the ones who have good history, that is, a broker with almost zero failure. Do not forget to compare the brokerage fees and the hidden fees that the brokers charge.
- After checking for an authentic broker, look for the risks and try to asses and manage them thoroughly. It is a vital step for each trader to check for risk management methods like stop-loss orders and negative balance protection. Practicing this will help you to trade long way hassle free and without keeping up too much losses.
