Foreign exchange investing has become a common hobby for individuals who are interested in foreign currency, as well as a potential for earning a profit.
In the past, foreign exchange trading was a concept that few understood or took part in. However, in recent years, the practice has become much more common. And, in turn, many have initiated plans to scam participants.
Several forex scam artists have gotten away with their attempts to deceive traders. But now, thanks to the rise in popularity and available news regarding forex trade, it’s become easier to spot a fraud.
Want to know how you can guard against becoming the victim of a forex trading scam?
Read on for three ways to spot a forex scam before it sinks its claws in you!
3 Sure Ways to Spot a Forex Scam
Unfortunately, scammers may frighten many that are new to the foreign exchange trading industry. But, you don’t have to let them get the best of you. Even if you are just starting out, these three tips will help you know what to look for to identify a forex scam off the bat.
1. Do Your Research When Choosing a Broker
When deciding on who to trade with, successful traders must be prepared to do a little research beforehand. You can often find out a lot about a broker’s reputation by researching their professional history online.
Just because a broker receives a negative review, doesn’t necessarily mean that they are a known scammer. Many people will present a broker in a negative light if the deal doesn’t go their way.
Instead, check for reviews by reputable sources that indicate a repeated pattern of losses attributed to the broker in question. If you do find that there is an accumulation of negative reviews from credible sources, then you might want to reconsider who you are trading with.
2. Look for Red Flags
If a broker refuses to offer satisfactory responses to your questions or avoids answering your questions altogether, this can be a sign of trouble to come.
In addition, if you are unable to reach your broker, or if your broker refuses to return your calls, this should be considered as a red flag.
Any sign of unprofessional or inconsiderate behavior on behalf of a broker might be cause for concern.
Likewise, if their address or location cannot be verified, you may have reason to wonder.
At the first sign of an obvious red flag, follow your instincts and delay doing business with this person until you feel more confident in their services.
3. Know Who to Call Regarding Suspicious Activity
From the start, you should have a transparent understanding about who you should call if you suspect your broker is guilty of fraud. At any point during your professional interactions, you should be able to reach out to the department designated for fraud-prevention.
If there is no contact information available for leery traders to report their broker’s suspicious behavior, then this might be a reason for you to be suspicious, as well.
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