Forex scams are a tricky and persistent foe for many traders. They lure traders with promises of easy, quick money, but the result is always the same: empty promises, frustration, and more debt than ever before. Many people have been scammed in their lifetime, but if you want to avoid becoming one of them then read on to find out what you can do to protect yourself from these types of scams.
What is a Forex scam?
Forex scams are deceptive and dishonest. They’re a type of Ponzi scheme or pyramid scheme that promises high returns on investment with minimal risk. With a Forex scam, the investor is paid to invest in an account. Once they deposit their money into the account, however, they don’t get any return. This is because they’ve been deceived by the scammers and received nothing from their investment.
The most common types of Forex scams include:
1) High-volatility trading strategies
2) Speculative trading strategies
3) Day trading strategy
4) Stock market trading strategies
Forex scams warning signs
There are several warning signs that you should be aware of when it comes to forex scams.
If you’re a trader who’s used to dealing with these kinds of scams, then you may not see these warning signs as a red flag. But if you’ve used money management tools and market timing techniques, or have any knowledge of the financial markets in general, then there is a decent chance that some of these warning signs will jump out at you.
For example:
1. A high-pressure sales pitch. “I’m so confident in my ability to get rich trading forex that I’ll pay for your next month’s electricity bill!”
2. A promise of easy money within 7 days or less. “We can show you how fast we can earn big profits!”
3. An excuse for poor performance and accountability issues (you must “get back on track” or pay us).
4. Invasive inquiries into personal matters (your bank account numbers, ATM card numbers…).
Scam protection tips
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The best way to avoid being a victim of the big, bad Forex scams is to learn more about these types of fraudulent schemes. Here are three simple ways you can increase your odds of not falling prey:
1.) Make sure you’re aware of any trends or patterns that might indicate scam activity.
2.) Stay away from Ponzi schemes. They are a form of fraud in which new investors are promised large returns; however, the returns aren’t always realistic and there is no real exit strategy for investors who lose their money.
3.) If you’re worried about being scammed, check into your account with any online brokerages before making any deposits or withdrawals and see if any suspicious activity has taken place recently.