How to Identify and Prevent Forex Scams

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The forex market has seen phenomenal growth over the past decade as more traders have started looking at it as a good investment option. Along with growth, the market has also seen frequent scams and this has made many new traders apprehensive about investing in this volatile market.

Irrespective of whether you are a beginner or experienced trader you need to identify the different types of scams used by fraudulent brokers. This can help you avoid them easily and you may be able to safeguard your hard-earned money and invest it properly.

Tips to identify and prevent forex scams

One of the easiest ways to identify forex scams is to look for schemes that look too good to be true. You may find many websites that guarantee profits to traders. As a trader, you need to understand that nothing can guarantee you success in this market. The other false claim made by websites is that they promise to make you overnight millionaires. It takes time and effort to achieve success and you may not be able to gain success immediately.

If the brokers offering their services are not licensed and regulated you need to avoid them as they can be fraudulent and you may lose your valuable time and money if you choose them. All reputed brokers offering their services to traders in Australia are licensed and regulated by the Australian Securities and Investments Commission (ASIC).

You can check to see if the broker offers you a demo or practise account. Fraudulent brokers do not offer a demo account to traders as their intention is to swindle the money deposited by the trader for opening a trading account.

Tips for avoiding forex scams

Education and knowledge are the most effective ways to identify and avoid forex scams. If you ask the fraudulent brokers the right type of questions, they may panic and disappear from the scene. These fraudsters are interested in your money and may not be willing to provide answers to your questions. Check to see whether the brokers are willing to provide you details about the relevant fees and spreads.

You can ask the fraudsters to provide you references and they may not be able to do so. Apart from this, you can check how long they have been in this business and their track record. You may find that most of these fraud brokers open new websites and have an online presence only for a few weeks or months before they disappear.

Check to see whether the websites have a contact address and whether the brokers have a physical office in Australia. Fraud brokers may not have a physical office, as they do not want to be tracked when they try and close their business.

You can read reviews about the brokers so that you are able to make an informed choice. It is best to read reviews from reputed blogs, forums and websites. You can avoid reading reviews from affiliate websites, as they can be false and misleading.

 

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