Foreign exchange (Forex) trading is one of the most effective revenue generating and profitable form of investment nowadays, thus numerous investors and individuals are into forex and they are also very particular with forex trading scams. However, there is huge risk associated with forex trading because of the presence of forex trading scams. Why is forex trading? Why is it getting popular nowadays? What are the ways to avoid becoming a victim of forex trading scams? To know more about forex and ways of preventing becoming a victim of forex fraud, read the article below.
What is Forex trading?
It is the method of trading different types of currencies. Forex trading comes in two types, conventional forex trading and online forex trading. Conventional forex trading is the one where transaction is done in banks or in financial institutions, while online forex trading is the one done using the Internet. In online forex trading, you can invest, can buy currencies and can sell them even within the bounds of your home.
History reveals that since 1981, this type of business venture continuously grew and at present, it becomes the largest financial industry worldwide which is trading more than two trillion dollars everyday. Because of the profitability, scammers and fraudsters want to take part of their profits.
With the onset of economic crisis, numerous swindlers and fraudsters are targeting inexperienced individuals and neophyte investors who want to become forex traders. Despite the presence of government agencies and regulatory bodies to monitor the activities of forex traders, forex trading scams managed to penetrate the industry. Because of their presence, forex trading becomes risky, thus it is suggested that seasoned and neophyte forex traders check the track record and background of companies that will manage their accounts or those which they transact their business. Most often, these imposters are dressed in sheeps’ clothings and act as if they are experienced in forex trading, thus plenty of innocent individuals fell into their prey and became victims.
Below are suggestions and guidelines to guide on how to avoid forex trading scams:
• Be sure to require credentials from individuals you transact business. Inquire from local regulators and organizations of their track record. Inquire if they have been doing business and trading for a long time. Also make sure that they are legitimate by knowing if they are licensed and registered with the Securities and Exchange Commission (SEC) and your local regulator. You can also notice that scammers know little of forex trading but aggressively markets and traded forex.
• When you are doing business online, be sure to ask questions before buying their product. Try to ask straight-to-the-point questions and if they give a roundabout answer, for sure they are forex trading scams. When dealing with these companies, it is a must to transact business with those which have security or privacy policies, have money back guarantees and direct contact numbers, otherwise look for other websites. These things are precautionary measures to safety consumers in the virtual or online market. By having direct line, you can be sure that the company you are trading has a base office where you can trace their operation.
• You will also noticed that scammers are not receptive to questions and they are unsure and vague of how the forex system works, but instead urge you to market their products aggressively.
With the guidelines mentioned above, you can avoid becoming a victim of forex trading scams.