This article looks at the ways that you can avoid FX rates scams and fraud.
When you trade FX rates you have to be aware of the scams and fraud that you can run into. As with all investments there are risks that come with forex trading and these scams are one of the risks. There are a number of ways that you can try and avoid the FX rates fraud and scams. It is important that you know what these methods are and employ them when you are trading.
Always do a Background Check
When you look at using any service on the forex market from the broker to a signal service you have to complete a background check. You should look at how long the service has been operating and what the other traders on the internet have to say about it. The experience that the other traders have of the service will give you an idea about the type of experience you are going to have with the service.
If there are a lot of bad reviews about the service then you may want to reconsider using it. The background of a service can reveal a lot of things that you may not be able to find out otherwise. There may be a condition to the use of the service that actually limits the trading that you can do. It is best to know about all of this information before you actually use the service.
Looking at the Regulations
The forex market is largely unregulated because of the decentralised nature of the market. As there is no central exchange there is no physical place for the regulations to be implements. However, there are many countries that have taken to regulating the brokers that are found in their country. When you look for a broker to use you need to consider the regulations in the country they are located.
The regulations will vary depending on the country that they are in. The United States of America has the strictest regulations that impact the capital the broker needs and the leverage they can offer. Other areas like Australia and Singapore regulate the capital the brokers need, but still allow the broker to use any leverage that they want. You need to look at all of this before you decide on a broker.
The Claims of the FX Rates Service
When you look at avoiding fraud on the forex market you have to consider what the service you are looking at is offering you. There are many services that offer a guaranteed income when you use them. This is something that should create a red flag when you look at the forex market. The forex market does not offer any guarantees because of the unpredictable nature of the market. If you have a service that guarantees you a return when you use it then you should be very careful.
There are other services that do not guarantee a return, but have over exaggerated tales of returns that people have made. If what the service offers you sounds too good to be true then it most likely is. These services should be treated with care as they could easily be a scam.
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