As the popularity of Forex increases so do the number
of scam artists attempting to cash in on the Forex gravy train. Since
Forex involves trading money internationally, often over the Internet, a
whole new breed of scams have come about. Ironically many of these scam
artists are finding their marks through newspaper, television or other
print media advertisements.
While these scams are generally easily spotted by experienced traders, new
speculators may have problems knowing the difference between what is real
and what isn't. It is absolutely essential to thoroughly research Forex
trading, and any potential companies you may trade with before making an
initial investment. The last thing you need is to find out that the
company you have invested with is under investigation by the SEC for
fraud. In this type of circumstance it can often be impossible to retrieve
your money as the claims from all fraud of participants will be higher
than the total payouts the government can guarantee.
One way to spot a scam on Forex is when someone promoting a Forex system
guarantees no risk. It is a fact that there is risk with Forx trading, and
generally anyone who claims otherwise is a liar, or more likely a
criminal. Trading in Forex successfully requires knowledge, discipline,
and a trading strategy. But there is no magic software or no risk way to
assure that you will make money.
Another red flag indicating a sure sign of a Forex scam is a web site that
guarantees profits. Nobody can guarantee profits and Forex trading. It is
up to you as an investor to perform. If it were possible to guarantee
profits in Forex trading then nobody would need to start a business
showing others how to make guaranteed profits. The profit potential for
anyone who could guarantee profits would be so enormous in Forex trading,
that they would quickly become a billionaire by trades. So why would they
waste time teaching others?
Another common tactic of Forex scam artists is to promise employment
opportunities for people using their system. This is usually a trick to
get you to spend your money with them. They are fishing for people with
capital who can fund their enterprise. They typically promise to offer
firm money to people using their system. But why would they do this?
Instead what happens is they lure people into their training systems and
convince people that they have done so well in the training session that
they should start using their real money in order to make a fortune.
All reputable Forex trading web sites will be a member of the CFTC or the
NFA. Make sure to check the company's claims out and assure that they are
members of one of these organizations before dealing with them.
Keep in mind that Forex is a relatively unregulated system of exchanging
money. In many cases Forex scams can become highly technical, involving
brokers manipulating prices in ways that cannot be tracked by the average
trader. Because of this is essential that you not become a mark for such
In the United States the CFTC is the federal agency responsible for
regulating the trade of Forex currency. If you suspect that you have been
a victim of some type of fraud contact the CFTC. They have jurisdiction
for investigating and enforcing the laws.