Forex trading is exponentially expanding throughout the world. Especially in South Africa, Forex trading has grown massively over the last few years. The sudden increase in the popularity of Forex trading has also attracted a lot of beginners. Unfortunately, people with bad intentions see this as an opportunity to scam others.
This article is a guide to avoiding Forex trading scams. Our readers will be able to spot and avoid Forex scams.
What is a Forex scam?
A Forex scam is any illegal activity used to rob the trader. Scams and frauds are usually organized activities that capture less knowledgeable traders. There are many kinds of scams in the Forex market.
How to spot and avoid Forex frauds
Let us look at some suggestions that will enable you to identify and stay safe from many potential Forex trading scams.
1. Bonus scams
Bonus scams are getting very common nowadays. These scams target the basic part of human nature, which is greed. People are always in search of more. Scammers present offers such as a 50% bonus by paying a sign-up fee on their platform. Many new traders see this as an opportunity and pay the sign-up fees. Afterward, the scammers disappear, and the trader loses their money.
To identify these scams, the trader should investigate the legitimacy and credibility of the company. And remember, no one pays a bonus to the traders for free. Be aware and vigilant if something sounds too easy and too good to be true.
2. Fake Forex Leads
Another common Forex scam that attracts new traders is the Forex leads scam. This scam offers traders to buy credible Forex leads. The criminals propose that the market shift according to their leads in the upcoming days, and the trader can benefit from it.
However, no one truly knows about the shifts in the market. The market is unpredictable and volatile, and anything can happen at any moment. Experts can offer their estimates. Hence, a trader should only look for Forex trading advice from prestigious institutes and professional traders.
3. Broker scam
There are thousands of Forex trading brokers in the market. Many new traders mistake going with a fraudulent Forex broker instead of a legitimate, registered, and credible broker. The fraud brokers are not registered with any organization, and often these companies do not even exist. Criminals make broker websites overnight, scam people, and then disappear with the money.
Traders should always look for brokers that are registered with their local authorities.
What should you do if you spot a scam?
If you identify a potential scam, or if, unfortunately, you have fallen victim to a Forex trading scam, then you should immediately contact the authorities. Law agencies and financial security institutions work around the clock to ensure that the scammers are brought to justice. Do not make the mistake of paying any ransom or fulfilling the criminals’ demands. It will only get you to lose more money.
Forex trading scams are becoming a huge problem in the community. If you want to be safe, be vigilant and aware of the risks and issues in the Forex market. If you want to read our article about derive broker, visit this link.