Foreign exchange trading scams is an awful things for every trader. Every year in the UK,
investors lose millions of pounds due to forex scams. Here is the information about forex scams so that you can avoid them.
Forex scam often traps traders by promising high returns with little or even no risk in their investments. They do many ways such as advertising on social media and making fake websites.
However, only the best forex broker gives the best services and is trustworthy. Let’s take a look at several common frauds and how to recognize them.
Common Forex Trading Scams
There are many sophisticated traps done by scammers to steal money from traders. We have outlined the most common things they use for frauds
to watch out for.
1. Signal Seller Scams
Signal seller offers advice on the best time to sell and buy currencies based on what is called market analysis. Usually, they charge a certain fee for investors for this information.
Signal seller scams do the same things but without giving any advice to traders, or giving little details then disappear. These foreign exchange trading scams are commonly promising that their data can guarantee high profits.
2. Robot Scams
Forex robots are software programs that allow traders to automatically sell and buy currencies using algorithms. Software in official forex robots can be tested and evaluated by independent bodies to make sure they work.
Some scammers sell unofficial software that carries out random trades and can cause investors to lose money. Always conduct as much as possible research to enrich yourself with knowledge about this.
3. Broker Scams
Criminals usually pretend to be good brokers or existing investment platforms. These foreign exchange trading scams persuade people to invest in forex funds that don’t exist.
Fraudsters commonly use the registration number and name of an official forex broker. You have to always use a broker which has a contact detail listed in the FCA register.
The most common reason given by these foreign exchange trading scams is that their numbers are out of date. Some of them even trick investors into paying for identical websites.
Other Types of Foreign Exchange Trading Scams
There are still some types of frauds that you need to recognize. Watch for these signs that can be useful to identify them so that you will not be got caught out.
1. Pyramid Scheme
The scheme basically recruits new members and groups them. They claim that traders will get data and advice to be successful traders. There will be subscription fees charged.
Moreover, traders who are trapped are also asked to attract more people as they are encouraged by certain commissions. In this fraud, money mainly results from membership fees, not from actual profits.
The reason behind the ‘pyramid scheme’ is that when new recruits join, they move up the pyramid and give more money. When there are no more recruitable members, the scammer will close this business and take all money.
2. Managed Account Scams
This type of foreign exchange trading scams is offered by some investment companies, where an advanced trader invests currencies on your behalf. Usually, investors have to give a commission or fee for the account.
The fraudsters pretend to give good services but indeed they steal investors’ money. It is essential to dig deeper into any platforms or financial services before using them.
Always be aware of fraud. Pay attention to their license and always do some research before believing in them so that you will not feel regret in the future.
Only by cooperating with a reliable broker, you can be a successful trader. Didimax forex broker is a licensed broker that provides the best services for you so that you will not be trapped in foreign exchange trading scams.