The Forex Trading Scams You Need To Be Aware Of

Trading foreign exchange (or Forex, as it’s commonly known) represents a lucrative opportunity for many. In fact, it’s the third-biggest virtual currency in the world. However, it is also fraught with risk. That’s why it’s important for traders to be aware of the most common Forex scams. If you plan on getting involved in this market, it’s wise to know how to stay safe. Here are six of the most common Forex scams that you should keep an eye out for. Read on to learn more about them and how to avoid them if necessary.

The Forex Broker Scam

One of the most common Forex scams is the broker scam. If you’re new to the Forex market, you may have noticed that there are many different brokers out there. They often advertise low spreads and high rates of return, which may sound too good to be true. However, it’s important to keep in mind that there’s no such thing as a free lunch. That is, you are not going to get rich just by trading with a broker. In fact, it’s in your best interest to find a broker with the best rates possible. The broker scam is basically when a broker misleads or takes advantage of those who are inexperienced. In some cases, it may even involve the broker freezing or stealing funds. Either way, it’s important to be very careful when choosing a broker, and make sure to do your research.

The Forex Trading Software Scam

Another common Forex scam is the trading software scam. In this case, you are being misled by the software that you are using to trade. There have been many cases where traders have fallen victim to malware and viruses. If you are doing any kind of live trading, it’s important to check the software that you are using. Make sure that there are no viruses or other malicious software running in the background. There have also been cases where traders were deceived by the trading software. They were led to believe that they were earning high profits with the help of the software. However, in reality, the software was manipulating prices. This sort of scam is especially common with automated trading robots.

The Forex Exchange Scam

The Forex exchange scam is one that is unfortunately quite prevalent. The scam basically involves trading on the wrong Forex exchange. Traders who are new to the market may not know that there are many different exchanges out there. It’s important to keep in mind that each exchange has its own rules and regulations. On some, you may be able to operate without having any experience, which could put you at a significant disadvantage. It’s a common mistake for traders to think that just because they operate on a particular exchange, they have a leg up. That’s not the case at all. In fact, it may be more difficult to trade on the exchanges that have strict rules than it is on others.

The Forex Trading Company Scam

The Forex trading company scam is very similar to the Forex broker scam. What happens in this case is that you get tricked into trading with a company that does not have your best interest at heart. In some cases, the company may even be a Forex broker. What typically happens is that you are promised high profits if you trade with them. However, in reality, the company is charging you high fees. It’s important to be very careful when it comes to the companies that you trade with. Check their reviews and make sure that they are legitimate companies.

The Signals Provider Scam

Signal sellers are retail firms, pooled asset managers, managed account companies, or individual traders that offer a system to help individuals trade in the foreign exchange market.  They tout their long experience and trading abilities plus testimonials from people who vouch for how great a trader and friend they are. All the unsuspecting trader has to do is hand over X amount of dollars for this privilege-trade recommendations!

Many of these signal seller scammers simply collect money from certain number of traders before disappearing; some will recommend one good trade now and then so as to perpetuate the scheme which would allow them time until more signals can be made with other unsuspecting victims’ funds not yet collected by them. This new scam is slowly becoming a widespread issue because there are honest signal sellers out there doing what they’re supposed to but it pays being wary!

The Forex Trading Pairs Scam

The last Forex scam that you should be aware of is the Forex trading pairs scam. What happens in this case is that you are tricked into trading on a pair that has been manipulated. In some cases, you may be led to believe that the trading pair is very popular. However, in reality, the price has been rigged. That is why it’s important to do extensive research before you make any trades. You should never ever make a trade unless you are 100% sure that you are not being scammed. The best way to do that is to research the various pairs that you might be considering trading on.

Final Words: How To Stay Safe While Trading

The only safe way to trade Forex is to use a platform that has been tested and proven to be trustworthy. The best way to do that is to do research and find a platform that has a good reputation. You should also make sure that you have a plan of action before you get into the market. That way, you will be less likely to make mistakes that could be costly. It’s also worth keeping in mind that Forex is a highly speculative market. That means that there is a lot of risk involved, which is why it’s important to be careful. The most important thing that you can do is to stay calm. Having a strategy, as well as a plan of action, will help you to avoid making costly mistakes. Finally, make sure that you are trading with a reputable broker.