Ways to Avoid Online Forex Trading Scams
by David Brown
How to Avoid Forex Trading Scams
The global Forex industry is worth approximately $5 trillion per day. That dwarfs the value of trading on all other bourses combined. With so many Forex brokers in operation, newbie traders may be a little overwhelmed. It’s important to know which brokers are legit, and which brokers are likely to be scam brokers. The Top Forex provides valuable insights into Forex trading scams UK, to help you avoid falling victim to unregulated brokers.
For starters, research must be conducted into every Forex broker that you wish to trade at. Compare Forex brokers to know what to look for and what to avoid. This research includes reading expert reviews from Forex brokers, and traders’ reviews of the brokers and trading platforms. Trading forex online scams are abundant, but they can be avoided if you heed sensible advice.
Ways to Spot a Forex Trading Scam
Forex trading system scams are easily spotted by watching the promotional videos of Forex brokers, and talking to people who work at the Forex brokerages. Any offer that sounds too good to be true is. Any promise of guaranteed returns with Forex trading is a lie. Most every Forex site that operates a scam brokerage will do its best to make itself look legitimate. This includes all the necessary window dressing and touchups to masquerade as a professional broker.
However, if the Forex broker is not regulated, licensed or a responsible market player it should be avoided. Luckily for traders, the leading Forex trading sites such as Octalios.com, eToro, AvaTrade, or Trade360 are guaranteed safe and secure. They are all licensed and regulated, and they are highly regarded by clients the world over. Regulation will vary from one jurisdiction, or territory to another. Various regulatory agencies exist, including the FCA, CFTC, CySEC or the NFA. A Forex trading site should be regulated by at least one agency.
Review the Management Teams of Forex Brokers
A quick search on a leading search engine such as Google will reveal any problems that exist with a Forex broker. If an online broker is associated with too much negative feedback, chances are that it is untrustworthy. From time to time, competitors of online Forex trading sites may provide negative feedback of other brokers, but the majority of negative feedback you will find is given by authentic traders. Legitimate brokers will go out of their way to ensure that they post details of company ownership, management, licensing and regulation.
This information is easily cross-referenced on professional social media sites like Facebook, Twitter, LinkedIn, YouTube etc. Any Forex trading brokerage that does not offer detailed information on its founders or executive management team should be avoided. LinkedIn is especially useful since it provides the option of feedback and reviews. Forex traders can learn a lot about the legitimacy of an online broker by reading the reviews of its management team members. Top brokers provide detailed information on scams in forex trading. This is typically found in their educational resources and FAQs.
Demo Trading and Forex Platforms
Demo trading is important, especially to newbie traders. Forex is an enticing market to dabble in, but it also requires practice and understanding. It is always better to practice trading Forex on a demo account before you deposit and trade for real money. That way, Forex traders will get to understand platform functionality much better. Without a demo trading account, traders will be better served by looking elsewhere.
The Forex platform used by the broker is also important when considering Forex trading scams risks. Proprietary programs are common nowadays, but it is best to choose MetaTrader 4 or MetaTrader 5 as they are reliable and highly regarded as the best in the business. As a rule of thumb, you should regard Forex trading investment scams as a real possibility with online brokers. Unless you can verify the authenticity of the broker based on the above recommendations, avoid it.