The currency market is one of the most profitable markets in the world. It is also rife with scams and pitfalls. If you are new to trading currencies, or just unsure if you’re dealing with a legit company, here are some ways to spot a forex scammer.
What is the Forex Market
The forex market is a financial market where traders buy and sell currencies. Common currencies have been traded in the Forex market for centuries, such as the USD, EUR, and GBP. The Forex market is one of the largest markets on earth, with billions of dollars worth of trading each day.
There are two primary types of currency that can be bought and sold in the Forex market:
1. Tradeable Currencies: Currency pairs that trade on an exchange or a financial institution. For example, the US dollar trades against other major countries’ currencies like the Australian dollar, Canadian dollar and Japanese Yen. These currencies are considered to be tradable as they may be exchanged for goods and services outside of the country.
2. Non-Tradeable Currencies: Currencies that are not traded on an exchange or financial institution. For example, Gold coins cannot be traded on an exchange because it’s considered non-tradeable—meaning it can’t be exchanged for goods or services anywhere outside their respective country. The US Dollar does not trade against any other currency pair in the Forex Market—it trades against only itself (USD).
The Forex Scam
Forex scams are a common problem for all traders. The marketplaces where you buy and sell currencies tend to have a lot of people trading. Many of these traders are scammers looking to take advantage of novice traders by selling them ideas that will make them money without putting in any effort.
Let’s say you’re looking to buy Indian Rupee (INR) Online. You go to an online forex broker, enter your currency pair and make your order. The broker will send you an email alerting you of your successful transaction. But the next day, the same broker emails you saying that the exchange rate has changed and now your INR is worth 8 rupees more than what it was valued at last night. Forex scams can happen with any currency pair, but they tend to occur with popular pairs such as INR/USD or USD/JPY.
How to Spot a Forex Scam
There are several ways to tell if someone is trying to scam you. If they say they have your money on deposit, then it’s a sign that they don’t really have your money on deposit. There are also many scams out there where the sellers of forex products falsely claim that you can quickly turn a profit using their system.
To spot these scams, here’s what to look for:
1) Do not give any personal information like your bank account number or social security number.
2) When signing up for a trading account, make sure you enter only the information you need to deal with the broker and not any other details about yourself.
3) Make sure the company has licensed examiners who are certified in forex trading. In addition, make sure that each examiner is licensed in another state and confirmed by an independent third party such as an accrediting agency.
How to Avoid a Forex Scam
One of the most common ways to make money trading currencies is through Forex scams.
Many people trade Forex for a living but are often unaware of the risks involved. Here are four things you need to be aware of if you’re thinking about investing in Forex:
1) Your broker may not be the very best option for you.
2) You may be dealing with scammers and scam artists who try to trick you into paying them using your real money.
3) The rates quoted to you may not always be accurate or up-to-date.
4) Remember that you can’t always trust what your broker tells you. They’re not responsible for all trades, but they are responsible for their commissions on those trades, so reliable brokers want to make sure that your investments do go well.