How To Avoid Forex Trading Scam

Unregulated brokers do not have to report to a governing body. This means that if they scam you in any way, whether it be “glitches” or “malfunctions” causing sever slippage in their system, or you go to make a withdrawal and they don’t process it (steal your money), you are out of luck. Beyond posting a bad review online, there is little you can do because these brokers have no legal authority to answer to.

Forex Regulatory Bodies

Questions to ask to avoid a forex trading scam

1. Is the broker regulated?
The easiest way to check a broker’s registration is to look for it at the bottom of the website. You’ll notice that nowhere in this picture is a regulatory body mentioned. The “about us” pages on the site link to an account login prompt. Nowhere on the site is there any mention of regulation or company history. All of these warning signs should make you cautious.
2. If regulated, how trustworthy is the regulatory body?
Some scam brokers claim to be regulated and registered by a governing body that does not monitor or regulate forex companies. Double check the authority of the governing body that regulates the broker you are looking at. You can go to the website of the governing body to search for the registration number and verify its legitimacy.
3. Is the broker offering profits or rewards for opening an account?
Scam brokers often make claims such as “make $50 a day from a $250 investment” or “make 80% returns on profit signals” or “96% success rate.” These claims are a scam, regardless of whether they are being made for forex, CFDs, or binary options. Forex brokers should not promise returns at all, small or large. Simply put, if a broker is promising to make you money, it is a scam. Other common scam practices include advertising pictures of expensive cars that are given away to lucky investors.
4. Is the broker offering a cash bonus for opening an account?
When a broker offers an abnormally high cash bonus, is not regulated, and does not show offer details for the bonus, then you are likely dealing with a scam broker. For example, 1000Extra hints at a bonus of $1,000 with their vague promotional offer. If you click around trying to gather more information you are redirected to sign up for an account.
5. Is the broker offering automatic trades or signals to guarantee profits?
Many scam brokers offer automated trading done by a robot or algorithm claiming to make you money. These brokers claim their robots trade off signals to generate money for you. Often, these brokers focus on cryptocurrency or binary options.
6. Is any credible information about the company included on its website?
If there is no information about the company executive team, where the company is located, or what phone support it offers, it is most likely a scam. Scam brokers don’t want any names, locations, or contact information linked back to them when they inevitably get into trouble.
7. If awards are cited, can I verify their authenticity?
Lots of scam brokers claim to have great awards. Most of the time the award will say, “Best broker 2015,” and the news outlet won’t be viewable, or it is an unreliable outlet. Scam brokers will purposely post fake awards from a few years ago because they’re harder to verify than a 2019 award.
8. If a big corporate sponsorship is promoted
One final scam trick to avoid is assuming a broker is trustworthy because it sponsors a football club or professional athlete. Just because a firm is a major sponsor PAYING for their name to be on a jersey doesn’t mean they should be trusted.

Unregulated brokers do not have to report to a governing body. This means that if they scam you in any way, whether it be “glitches” or “malfunctions” causing sever slippage in their system, or you go to make a withdrawal and they don’t process it (steal your money), you are out of luck. Beyond posting a bad review online, there is little you can do because these brokers have no legal authority to answer to. Forex Regulatory Bodies FCA Regulated – Financial Conduct Authority – United Kingdom – (Great)CySEC Regulated – Cyprus Securities & Exchange Commission – Cyprus (OK)ASIC Regulated – Australian Securities & Investment…

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