There has been a lot of buzz about Forex in recent years. People who want to make extra money may see Forex as a brave new world of fast-paced trading, capable of creating huge returns, and is based on the simple principle of currency pairs. However, Forex is more complex and riskier than it seems at first glance and Forex trading scams make Forex dicey. ,
This isn’t to say there isn’t legitimate Forex trading. However, it is important to be honest about the risks involved even in the absence of Forex trading scams. Because there is so much fraudulent activity, the risks are even greater. Trader Defender assists those who have lost money in Forex trading scams.
What Is Forex Trading?
Forex is an abbreviation for “foreign exchange.” Anyone who has traveled outside of their native country has dealt firsthand with currency pairs. You may trade your dollars for euros or euros for pound sterling. As a tourist, you may have avoided changing money on certain days when the rates were not favorable.
Perhaps a significant political event made one currency rise and the other fall, and you may have changed money to capitalize on that event. Outside of a Forex trading platform, you were doing Forex trading.
People are attracted to Forex trading precisely because it involves money and currency–something most people understand and have experience dealing with. Forex may seem simpler at first glance than trading stocks, which requires research into company fundamentals or bonds which depends on concepts of government debt and interest rates.
Forex revolves around a concept people engage with frequently, which doesn’t mean that Forex trading is simple. Fluctuations in currency can occur at lightning pace. A trader can go to bed with their currency pair doing well and wake up in the morning and lose a bundle. Huge institutional investors make it less likely individuals will make huge returns in Forex trading. Additionally, the Forex market is riddled with Forex trading scams.
Types of Forex Trading Scams
Forex trading is challenging enough, given its high volatility, relatively lax regulations, and large institutional investors’ participation that affect the market. The number of Forex trading scams is huge, and it is important to become familiar with types of schemes and how to avoid them.
- Unregulated Brokers
The most important thing to look for when selecting a broker is licensing. Working with an unregulated broker is basically handing over money to scammers. With both strict and lax regulatory bodies around the world, there is no excuse for brokers to be entirely regulated.
Ensure that the license comes from a reliable regulatory body and that it is up to date and authentic. It can be difficult to spot a counterfeit license, but anyone can research regulatory bodies on the internet to determine if the license provides real protection from fraud.
- Point Spread Scam
The Point Spread Scam is a common one in which the rate between the bid and the ask, which reflects the broker’s commission, varies widely from one broker to the other. This spread can be manipulated by fake brokers to get more money out of the client.
- Signal Seller Scam
Signal sellers are people who offer fake tips and fraudulent trading advice. They will tell traders that Forex is too difficult to do on their own (which may be close to the truth). However, they may provide advice that is false or will benefit the ones giving the advice and not the trader. They charge for their advice, and the traders lose all of their money.
- Robot Scammers
Not all robot services are scams, but unscrupulous perpetrators of Forex trading scams take advantage of the fact that traders are worried about fluctuations in currencies when they are sleeping. These automated tools, however, are fake and may not even trade at all.
What If You Have Lost Money in Forex Trading Scams
If you have lost money in a Forex trading scam, do not give up. It is possible to locate the scammers and do a full investigation on their methods with services like Trader Defender. Consulting with experts and providing documentation will make it possible for the agency to locate the people who defrauded you.