6 Tips on Avoiding Forex Scams

Forex scams are prevalent in the market, if you are a new investor, you must be extra careful when putting your money into foreign currency trading. Here are six tips to help you spot and avoid foreign exchange scams.

1. Understand the Ins and Outs of the Forex Market

Before you put money on foreign currency trading, it is important that you know the fundamentals of the market. Read books and articles and attend seminars that will help you understand how the Forex market works and how you can make money. People who do not have any idea about Forex investing are the ones that easily fall prey to scams.

2. Stay Away from Promises of Big and Fast Money

One red flag you need to watch out for is the promise of easy money. This is especially true if you are using automatic trading platforms, or software. The Forex market is more volatile than the stock market, so it is very hard to know for sure where currency prices are heading. Long-time investors will tell you that they have made money through Forex only because they have studied the market for a long time. When it comes to Forex trading, there are no shortcuts to gaining profits and no one can promise you that there will be zero loss.

3. Know the Trading Company

In order to avoid Forex scams, you have to research the company that offers you the Forex trading tools and platforms. Make sure that they are licensed to operate in the country. Check with the Better Business Bureau and the Securities and Exchange Commission. If you are planning to trade online, you need to confirm the physical address and phone numbers found on the website’s contact information. It is also a good idea to visit the company office. Doing so will give you the assurance that the office address is not bogus.

4. Read Reviews from Experts

When choosing your Forex trading broker, you can look for unbiased reviews from experts in the industry. Make sure that the reviews you are reading are unbiased because there are many blogs or websites that are disguised to self-promote the company or the products they offer. Some writers of review articles do not even have first-hand knowledge or experience in online Forex trading. One good way to get unbiased information is to visit online forums.

5.  Look for Free Trainings and Test Accounts

Forex scams do not offer training for their clients. Once you invest your money in scams, you will never be able to get it back. With this in mind, find a company that will not only offer free training and resources to help you better understand Forex trading. Also, the free training will help you use free test accounts where you can practice trading, without spending a single dime.

6. Don’t Let Your Emotions Decide For You

Forex scams lure many victims because they have well-made sales pitches. To avoid scams, you need to always keep your emotions in check. More often than not, people who badly need money are the ones being scammed because they are easily blinded by false promises and claims.

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