Who can resist the idea of having quick bucks or an instant fortune? It is enticing that it may cloud one’s judgment and will just stash a huge amount of money to invest in something that they believe will return back a greater profit. Scamming activities proliferate and bank on the individual greediness for money. Below in this article, we will cover The Types of Forex Scams To Watch-Out For.
These scammers are keen and observant as to who are the rookies in the forex trading, for they can be easily manipulated and convinced to invest in their scamming system. If you are a rookie, just starting out, or even a veteran in forex trading, it is a must that you should know the different types of forex scams. This is to ensure that you are on the right forex trading and not be a willing victim of a scam “system’.
Learn more about Forex scams in this video, or how to avoid robot scams by visiting https://forexrobotnation.com/.
Types of Forex Scams
Phony Forex Investment Management Funds
The glaring reality is that the world is no longer “safe,” especially when there is a money involve. The forex market is of no exemption, especially that it has a huge trade dealings. It becomes a fertile ground both for a good investment and for scamming. One type of common known scamming activity in the forex market is the Phony Forex Investment Funds.
Same with other scammers, the Phony Forex Investment Fund offers services to would-be investors their alleged “expertise” in carrying out forex trades. Oftentimes they claimed that they are a group of experts in the forex trade and that they can guarantee a hundred percent annual returns for the investment.
You may be lured by their convincing statements, their impressive brochures, and websites. The catch in this negotiation and engagement of Forex Management Fund is that you are required to hand over the control of your money to the alleged “skilled forex traders.” This is quite risky, for you are losing control over your money to people of whom you literally do not know.
For the services that they will render, these guys will ask for a profit-sharing in the market returns of which eventually you will realize that nothing was left to you while these guys have enriched themselves at your expense. You may end up crying and regretting while the people to whom you entrusted the control of your money will end up laughing and enjoying the fruits of their scamming activity.
Business dealings and trading is an arena where shrewd, scrupulous, and dishonest individuals thrive. It is their playground for them to play their dirty tactics to someone who is naïve. Being naïve in the forex trade will make an individual be the target of dishonest brokers. These dishonest brokers may be classified as a “scam” for they are defrauding their clients.
These dishonest brokers thrive in the forex market for the simple reason that the forex market is a huge market trading, and aside from that, it may not be entirely unregulated, but there is no central regulating authority.
Surprisingly the majority of the forex trades are unregulated that will give way for these brokers the opportunity to defraud their clients. If you don’t want to fall into the hands of a dishonest broker, you need to browse the BASIC or Background Affiliation Status Information Center website. It is a reliable website where you can find some information about the brokers. In this way, you can be assured that the broker you chose is one of good standing in the forex market.
Check also if the broker is conducting forex trade that is being regulated by the Securities and Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). Logically if the broker is being subjected to the regulation of SEC and FINRA, he or she will not just compromise his or her license.
Forex trade in itself is unregulated, but a broker subjected to FINRA and SEC oversight will not put his or her license by defrauding his or her clientele. The license itself is your assurance that you will not be defrauded and that a licensed and honest broker will conduct your forex trading.
It is true that we are living in a world of dishonesty. Still, you may avoid risking or bumping into dishonest people by dealing to an individual that has been recognized based on his or her performance and credibility.
The Point-Spread Scam
The earliest type of scamming activity is the Point-Spread Scam, and it is usually carried on through the use of computer manipulation of what was being referred to as “bid-ask spread.” It is being done by having a point that is set between the bid and the “ask.” It also reflects the commission that will be derived by the broker in the back and forth transaction. It appears to be a “legit’ trading; however, the scam will eventually occur once there is a difference in the point of spread among the brokers. The spread usually differs in the currency of pairs, making it difficult to earn profit from the transaction.
The Signal-Seller Scam
If the Point-Spread Scam was the ancient type of scamming, then be updated on the current trend in scamming, which is the Signal-Seller Scam. This is the new hype in scamming in the forex market. This may be a group of pooled asset managers, retail firms, manage account managers, or an individual that offers a type of system to an investor.
For a certain fee of which can be paid on a daily, weekly, and monthly basis, they will offer their “system.” It is a system that has the capability of determining and sensing the “proper time” to make a trade in the forex market.
They devise ways and means to lure investors into trusting their systems, such as having a website that provides testimonials about the successes of their system and brochures.
You must be very skeptical in dealing with these guys, for most of the signal-sellers usually disappear or vanish into thin air once they got to hold off the money from their clientele. It is now becoming a termite that is slowly destroying the forex market.