Forex investing presents an excellent opportunity for wealth-building, but there are dishonest organisations and traders that try to take advantage of others. The majority of brokers are undoubtedly reliable, but how can you protect your funds by identifying those that aren’t?
Be suspicious of requests to deposit more money
When you find a trustworthy new broker and open an account, they are unlikely to pressure you into making ever higher deposits. They are in it for the long term, so the last thing that they want to do is scare away clients. If you are asked to place more money into an account during an initial conversation or are sent an email explaining that a certain offer is ending imminently, be careful. In the same vein, brokers that try to talk you out of making a withdrawal should also be viewed suspiciously. No legitimate broker would intervene when you have decided to remove your profits because they would not want a client to feel uncomfortable.
Keep up with current affairs
Reading the financial news in the Economist or a similarly reliable journal can ensure that you are aware of any scam-related red flags as soon as they appear. Another good source of information is Google, as by conducting a quick general search, you will soon find out whether people have had a negative experience with the broker. On forums and in the comments section of reviews, you can check out the opinions of other brokers with real-life experiences to share. By being aware of forex fraud (check out the website ForexFraud), as well as the companies to avoid, you are more likely to stay safe online.
Avoid unproven trading systems
This type of scam is common on investment forums. It starts when a member claims to have created a failsafe trading system that ensures great returns. They will often target novice traders who visit the forum to ask for advice. First, they attempt to impress the less experienced person with their superior knowledge, before offering their method in exchange for cash. When they are challenged to provide proof that the trading system works, they are unable to deliver and generally back off.
Educate yourself on the world of trading
The more you know about trading, the less likely it is that you will be taken in by unscrupulous brokers. If you are an absolute beginner, you can take a few open-source finance courses, attend any relevant webinars, and start following the stocks online. The more experience you gain in the industry, the less likely it is that you will be drawn in by a bogus scheme, and you will also know what questions to ask of a new broker. Do your research in terms of FCA regulation and the company’s background. Also, be sure to get any deals you are offered in writing to ensure that they are binding.
Expect attentive customer service
A trustworthy company has no reason to avoid or ignore its clients, so if you have difficulty reaching a broker or they are evasive when you speak to them, take this as a warning sign. Sometimes, a team member may genuinely not know the answer to your query. To gauge their position, you can ask them for the broker’s physical address. Many of the best brokers are happy to share their location and some even allow traders to visit. If you find that a company is unwilling to share their address, then it may suggest they have something to hide. Honest brokers understand that their clients want to know more about their business and have nothing to gain from being guarded.
Avoid get-rich-quick offers
Overly generous offers and guaranteed returns are clearly created to catch traders off guard, but many of these scams can be ingenious. Turning a steady income from trading is difficult – it takes time, patience and dedication. Anyone who tries to convince you that there is a fool-proof method or a short cut is wrong. Always carry out your own research into a broker, and don’t part with your money until you are satisfied that they are what they seem.
Fraudulent brokers only need to launch a website to gain access to numerous unsuspecting clients. This means that you must always be aware of the potential risks and protect yourself when it comes to signing up with a new platform, or parting with any cash. Forex trading is a fun way for anyone to make money online – by staying vigilant on a daily basis, you can keep it that way.