Forex
Trading Scam
We’ve all heard of forex trading. The term ‘forex; is often associated with the kind of shady offers we see in our spam boxes and on social media. Not all forex is a scam. If you look on the websites of registered brokers, you’ll see forex trading offered alongside stocks and commodities.
However, it’s true that many forex brokers are fraudulent. It’s important to understand the difference between a forex trading scam and legitimate opportunities.
Is Forex a Scam?
The concept of forex doesn’t involve trickery or deceit. Forex does not equal scam. Forex is simply the trading of currency pairs. Traders decide which currency they think is going to perform well and which is going to decline. Forex trading involves comparing the performance of currency pairs.
Although not all forex is a fraud, the sector is definitely volatile. Currency value can turn on a dime and can’t always be predicted. A natural disaster, rebellion or an unfavourable outcome of an election can send some currencies soaring and others reeling. Also, governments and huge corporations can suddenly buy or sell large stakes in currencies without warning.
Experts understand that forex trading is volatile and they could lose a lot of money without making a misstep. Of course, this means that beginning forex traders are even more at risk. Basically beginning forex traders can expect to lose some money at first until they learn the ropes and tricks of forex trading.
That’s why forex trading scams can be easy to spot. Many of them claim that absolute beginners can make a killing at forex trading. If you see a forex broker claiming this, you’ll know right away that it’s most likely a fraud. In fact, any broker that guarantees success and guarantees rates of return is not legitimate.
Why Are There So Many Forex Trading Scams
The simple answer to the question of why there are so many forex trading scams is that this type of crime seems to pay – until the fraudsters get caught. This of course means that a lot of people are falling for forex trading scams. As long as people are willing to buy the false promises fake brokers provide, more crypto scams and forex trading scams will flourish.
Why do so many people fall for forex crypto scams? Part of it is due to a lack of information. They don’t realise that brokers can’t guarantee returns, need licensing, and should give full transparency. Because they lack the tools and knowledge to distinguish fake and real trading opportunities, they are likely to fall into the grasp of forex trading scams.
Another reason is desperation. If we were honest with ourselves, we may recognise times we almost fell into the trap of fraud. We may have thought, “This seems like it could be a bit shady, but maybe it’s worth the risk.” The gambler’s mentality is actually quite common. People may think it may be alright to lose a bit of money if they could stand to make a bundle. However, they don’t count on getting caught up in the scam, encouraged to fund the account with more money, being charged fees and threatened if they can’t pay. A forex trading scam is one of the worst kinds of traps.
How Do Forex Trading Scams Work
Forex trading scams may make different types of promises, but they tend to work the same way. This is the general pattern of forex trading scams:
- Aggressively recruit clients.
- Won’t have a licence.
- Promise huge returns on investment.
- Won’t give full information about their identities or terms and conditions.
- Demand more deposits.
- Won’t offer withdrawals.
- Will ghost clients or disappear.
The first thing you’ll notice about forex trading scams is that they will aggressively recruit clients. They will rely on email spam or social media to promise people huge returns in a trading opportunity of a lifetime. Licensed brokers, however, never seem this desperate. Also, if you look for a licence, you’ll find a forex broker scam either won’t have a licence or flout a third-rate one.
They’ll promise that you’ll make a huge amount of money, even though they won’t back this up with any evidence. They won’t give their real names–either there won’t be any names or fake identities. Meanwhile, the forex broker scam will keep demanding more deposits. They may release a small amount of money to the client to win their confidence or they may say more deposits are needed even if the trades have failed.
However, when the client wants to withdraw funds, the broker won’t allow them to do so. They’ll either invent a fake rule about not allowing clients to withdraw money until they’ve reached a certain trading volume or claim they need to pay a huge penalty fee or tax. Eventually, the forex trading scam broker will disappear with the money.
Have You Lost Money to a Forex Trading Scam?
Fundrecovery Australia Will Help!
Fundrecovery Australia is staffed by forex experts who use specialised technology and methods designed to uncover information about unregulated forex brokers. We consult with clients, launch an investigation and create reports that can help you succeed in recovering your funds.
