Forex investing, which is investing in currency exchanges, in and of itself is not a scam. It is a legitimate investing opportunity that has been around since the late 70s. It opened itself up to average investors in the 90s. So, why should a person still be careful when they are looking to get into the Forex market? It’s because while Forex in and of itself is not a scam, many of the websites associated with it are. For this reason potential Forex investors need to be extra careful where they place their money. This article will offer some guidelines on how a person can point out a possible Forex scam.
The first major sign of a Forex scam is if the Forex trading company offers a return rate that is ridiculous. An example could be a person saying they made $1,000 in a matter of five minutes. Even experienced Forex traders will not be able to make such a return. In fact, Forex investing has as much risk associated with it as it does profitability.
This is why a large number of beginning Forex investors decide to ditch the Forex marketplace within a year of participating in it. Ethical and honest Forex trading companies will not make Forex trading seem like the ultimate get-rich-quick scheme. They will advertise it favorably, of course, but not in the manner as described above. Companies that do otherwise should be avoided.
A second indicator of a Forex scam is if a Forex trading company does not have valid contact information. Forex trading companies running a Forex scam tend to only have an email address as their source of contact. And half the time even this will not fully reach them. Serious Forex trading companies will have their physical address, phone number and email address. They may even have a customer service line, depending on how large they are.
Lastly, there is perhaps the biggest red flag of them all when it comes to Forex scams… the promise of being able to trade on the interbank market. The interbank market is when banks do Forex trading with other banks. It is off limits to average investors, who can only get in the market if they are a bank or lending institution themselves. Any Forex trading company that says they can get a person in the interbank market is downright lying.
In conclusion, the Forex marketplace is not free from scams, mainly because it can offer quite a bit of revenue for the savvy investor. To help protect oneself from scams, it’s best that they follow these suggestions as well as check organizations like the Better Business Bureau.
They should also see what other Forex investors have to say about a particular company. All one has to do is Google in the name of a Forex trading company. If it has a bad reputation and it’s been around for a while, there should definitely be a plethora of message board posts or blogs talking about it.