The Forex market is a massive one, dealing with enormous amounts of money and bringing more than big profits. So it’s not strange that more and more people every day want a piece of cake from it. Still, many lose their money thanks to the lack of experience, knowledge, and precaution. The market evolution has brought more security and regulations to respect, but there are still some insecurities. If you are rooky, you can avoid forex scams and unpleasant surprises by following some precaution steps, which are described below.
7 Steps To Avoid Forex Scam
Check the Legal Notice
Forex scam brokers and other investment advisory services are subject to strict regulation to ensure investor safety. Your first instinct should be to go and check the legal notices page. It must be clear, and the information must be legible and understandable.
Check Contact Information
The Forex broker’s contact details must be visible, telephone number, email address, physical address. Use the email address listed on the site to write to them. If it is a generic email address (Gmail, Yahoo, Hotmail), it is a scam!
Finally, check that the coordinates indicated on the site correspond to those indicated on the page of the online broker’s regulator, in case of difference, you are facing a scam.
Check the Country Regulation
Forex scammers like to use addresses based in tax havens. If you see the Marshall Islands, Bahamas, etc. you are surely facing crooks! For your security, favor brokers who are close to you, in your country, or your geographical area. It allows you to reduce the risks because it will significantly facilitate your further legal procedures in the event of a scam.
All Regulations Are Not The Same
Yes, it would be best if you always chose a regulated Forex broker, but even regulated, a broker can be a scam. You must, therefore, pay attention to the regulations held by your online broker. Typically, a broker regulated in the Bahamas is suspect. So what real guarantee do you have in the event of a problem? Favor globally recognized regulations, such as the FCA (Financial Conduct Authority) in London, which offers solid guarantees to all investors, including European ones.
Read Forex broker reviews
They are very helpful regarding choosing the right broker. So, check broker reviews where you will find forex platforms rated by users and where you can compare several of them and pick up the best.
Stay away from rewards for opening an account
Scam Forex brokers frequently make advertisements like “make $100 a day from a $300 investment” or “95% success rate.” The truth is that these are 100% Forex scammers, no matter if they are being created for Forex, CFDs, or some other financial market. There is no room for promises, small or large. In other words, if a forex broker guarantees that you will make money, it’s a scam. Forex brokers should not promise returns at all, small or large. Simply put, if a Forex broker is promising to make you money, it is a scam.
All in all, there are some general steps to follow when trying to avoid forex scams. These steps are, in fact, the answers to the next questions:
Does the regulatory body regulate the specific forex broker in your country?
Does the broker guarantee the profit and offer a bonus or reward for opening an account?
Do you see all credible information about forex broker company such as an address, phones email, company’s history and does it match the information on the regulatory body’s website
After you are sure that the Forex broker is trustful, analyze the market, choose your pairs and indexes wisely. Grab the endless opportunity of profit that it offers and good luck with the trading!