Forex Scam Guide
Forex scams are all around us. They are out there in the form of unsolicited mailings, unsolicited calls, spam, and just generally uninvited investors who are looking for easy prey. Some of these individuals are out there to really take advantage of people’s innocence and their need to make a quick buck. Others are out there to simply take your money for bogus reasons. No matter which type of forex scam you fall victim to, there is a forex trading scam of some sort that you should know about.
Forex scams are characterized by under-handed practices in order to make money. And, though there are certainly plenty of types of forex trading scams that don’t work, there are also plenty of types of forex scams that do work. If you want to avoid falling victim to one of these schemes, you have to take a couple of precautions. You can find out more about this method by reading the information in the following article.
The most common types of forex trading scams involve spreads. These are essentially fees that brokers charge you if you are planning on buying or selling a certain amount of foreign currencies. When a broker markets a spread for a product, he will try to make it seem like his product has a high profit potential.
One of the more common types of forex trading scams involves social media forex scams. In essence, an investor posts on a forex forum, pretending to be a broker, offering potential investors great rates for investments he/she makes. In reality, however, the investor is working with a trading system that is unlicensed and is only after his/her own profits. Investors who fall for these types of programs end up losing their investments.
Another type of forex trading scams are forex trading scams involving leveraged instruments. This basically means that traders trade currencies using leverage; this means they use a lot of money in order to make relatively small profits. For example, traders could easily buy 100 dollars worth of currency with one dollar. However, they then invest that same 100 dollars into a leveraged product, thereby magnifying the amount of money they made from the initial investment. Unfortunately, leveraged instruments often carry very high risks of loss, so it pays to be cautious when dealing with them.
Forex scams are usually committed by middlemen who will disguise themselves as forex traders in order to earn your trust. The forex trader is the only person who really profits from such an activity. Therefore, always insist on dealing with a legitimate trader and not someone pretending to be one. Never let anyone sell you any product or service promising extremely high returns with very little work required.
As an example, forex scams that involve forex scams may include asking you to sign up with an account which you will have to maintain in order to reap the benefits. Asking you to send money through a wire transfer in order to open an account is another form of forex scams, where the trader gains the account without providing you any. It is quite common to see forex brokers requiring you to make deposits before they will give you any advice. In fact, some brokers even make it easier for you by giving you a set deposit and asking you to make withdrawals from the account using your credit card.
There is also another form of trading scams, forex scams in which the trader is forced to go through a managed account. The forex broker in charge of the managed account may ask you to make instant deposits which you may need for margin requirements. The broker will then use this funds to pay expenses and purchase stock. When you request for your money back, you will find out that you have been shortchanged, because the managed account was actually used as a way for the forex scammers to make instant profits.