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Forex Scams: Recover Your Lost Funds
The Forex industry is one of the scammer’s favorite grounds. Since the industry is generally known as a legitimate investment option, it is very hard for the average person to differentiate the scam brokers, from the legitimate ones. Usually, most people don’t even know they’ve been scammed, they just think they had “A bad trading day”. If you feel that the way you lost your money trading, is more than just a “bad day”, contact us now. If your Broker is a fraud, we might get your money back Forex Scams: Recover Your Lost Funds The Forex industry is one of the scammer’s favorite grounds. Since the industry is generally known as a legitimate investment option, it is very hard for the average person to differentiate the scam brokers, from the legitimate ones. Usually, most people don’t even know they’ve been scammed, they just think they had “A bad trading day”. If you feel that the way you lost your money trading, is more than just a “bad day”, contact us now. If your Broker is a fraud, we might get your money back
What is forex trading?
Forex is the single largest traded market globally, with up to five trillion traded each day and is considered decentralized because there is no central processor for trades– in other words, there is no entity that acts as a central exchange like the NASDAQ or the NYSE. Instead, orders are completed by millions of traders using millions of various forex brokers around the world. Foreign currency trading is one of the most leveraged markets in the world as well. In the US, regulations limit a person to 50:1 leverage. In other countries, they have zero limits on leverage. It is not uncommon to see some non-US brokers offer 1000+:1. Due to these factors and a few others which we will discuss, this is why scams can be so prevalent within the foreign exchange market.
Is forex trading a scam?
In the investment world, forex is the wild-west of traditional financial instruments. However, most of the participants are massive institutions like banks that help companies manage cross-currency rates for payroll or buying goods. But it is by far the most accessible and cheapest investment for anyone to make. A futures broker may require a $5,000 minimum investment; whereas many firms in the foreign exchange markets require as little as $1. Day trading stocks in the US requires a $25,000 minimum balance; forex does not require this. The ease of access to significant leverage, and the fact it is open 24 hours a day all make it the most appealing market. But this also attracts many of the bad actors. Some countries regulate forex markets – but not always to the same degree as the US. Many countries have little to no regulation and allow anyone to open a brokerage account in their country. There are many, many bad brokers around the globe – so it’s often best to stick with brokers that are based in the US, EU, or UK.
The first step to protecting yourself from frauds or scams is to be knowledge of the threats. But hope is not lost, if you have been scammed. Read on to learn about the most common cryptocurrency scams and how we can help.
How to spot a forex scam
The scams that exist in the investment world are many. One of the hardest things for new and aspiring traders to overcome is the vast amount of wrong information, bad actors and blacklisted scam brokers trying to take advantage of you. Here are some of the different types of forex trading scams:
Broker’s Leverage
The US and EU (more recently) have limits of around 50:1. If you see a broker offering 500:1, 1000:1, or anything beyond a conservative amount, stay away. This is a predatory action. Avoid any broker that is not clear about margin requirements.
Broker’s undisclosed parameters
Avoid requirements for a minimum Stop Loss or Profit Target
Avoid requirements where you must have a trade open for a certain amount of time before you can exit.
Avoid anyone that doesn’t allow you to create your own risk management profile.
Broker withdrawal rules
You should be able to withdraw your money from your brokerage account at will – but some don’t allow this.
Avoid minimum requirements for volume traded before you can withdraw.
Avoid anyone that doesn’t disclose their withdrawal rules. If a broker advertises a bonus on deposits, make sure that you can withdraw the bonus within a reasonable amount of time – it should be clear what the requirements are for you to withdraw the bonus.
Broker’s spread
The spread is the difference between the Bid (buying) and the Ask (selling) – This should be clearly defined or be avoided. Avoid brokers that don’t warn you of regular increases in the spreads, such as at the end of the day or during certain holidays.
Signal Sellers
Forex signal sellers are individuals who want to sell you signals or advice – they want to tell you what pairs to buy or short, when to exit for profit, where to put your stops, etc. Millions of signal sellers out there are all selling you on their success with messages like, “3,000 pips a week!” – a pip is how you measure movement in the exchange rate. The average pip range that the EUR/USD moves a day can vary between 30 to 50 pips.
Avoid people or companies that promise or allude to a guarantee of profit.
Avoid entities that promise unbelievable returns like: “90% win rate!” or “188 winning trades, 12 losing trades!” or “MASSIVE GAINS.”
Broker spam
Avoid sites that have side advertisements and banners promoting a single broker.
Avoid anyone or anything that recommends a single broker People who promote a single broker generally have some agreement with them. Many non-US brokers offer various incentives for people to find new customers. They may offer the seller a cut of your deposit or a rebate on any trade you make. If someone tells you about a broker or if a site is promoting a broker – ask if they have an IB (introducing broker) agreement with them– this must be disclosed in the US when asked.