Scams and fraud are not new terms in the securities market. They date back to the very inception of stock trading. The stock brokers and dealers are the chief perpetrators of forex fraud. They have numerous strategies of effecting this evil, especially to the unsuspecting investors.
Which are some of the common forex scams?
Forex fraud takes many different forms. Some of the most popular types are captured below.
• Signal sellers
• Phony investment schemes
• Miracle software
The signal sellers
These fraudsters rely on investors’ ignorance to propagate their evil schemes. They mostly target new investors who long to rake millions overnight. The signal sellers profess to have all the information relating to the stock market trends. They commit to deliver the same to you periodically for some charges. The information they provide you has nothing to do with the latest trends in the market. This forex fraud flourishes due to lack of information. Now that you know, do not fall victim to signal sellers.
In security trading, there is no magic. It is plainly based on information that trickles into the market and how fast you respond to the same.
The phony investment schemes
In all the leading security markets, evil schemes that promise huge returns overnight have continued to flourish. Victims who “invest” their hard earned cash into such funds come to grips with this heart breaking reality when it is too late. Some of such phony investment schemes include:
• The high Yield investment Program (HYIP)
• The Pyramid Scheme
• The Ponzi Scheme
These phony investment funds promise their victims incredibly huge returns for using their money in forex trade. The end result normally turns out that when they have accumulated enough they close operations taking away everything with them.
Don’t be that easy prey that is baited by mere mention of huge returns. Have sufficient knowledge about security markets and how they operate. This way you beat the forex fraud kingpins in their own game.
The miracle software
Just with a bit of research you will be able to realize that the trends in the stock market are not easy to predict. Not any miracle software does the prediction accurately. Contrary to this, many individuals who are bent on forex fraud have, for obvious reasons, managed to convince some investors to use their so called miracle software to have an edge in forex market. In the long run, they stand to be the losers.
These are but a tip of the iceberg. There are many new developments that evil stock brokers and dealers use to catch their victims unawares. It is practically impossible to exhaust the list.
What are the warning signs of forex fraud?
To completely stem out this vice, there is need to keep vigil for any loophole that may be a perfect soft spot. Some of the warning signs to watch out are:
• Firms guaranteeing huge returns
• Companies purporting to trade in interbank market.
These are but a few. There are other very obvious warning signs that we have not captured. Notwithstanding the mentioned warning signs, the sure way to avoid forex fraud is to always seek clarifications from registered government agencies in the trade.