TOP 3 Signs Of Forex Scam

So, you started with this new offshore broker who promised you to double your initial investment in just one month. You reached some success with trading cryptocurrencies and now you wish to withdraw your funds.

But then you are amazed to see your withdrawal requests being ignored, you receive no reply to your emails. Eventually, you see your account blocked or being frozen. You are wondering how did this happen?

And then you realize, that you should have been more attentive in interpreting signs of forex scam. In this article, we will discuss some red-flag signs of forex scam that you should be aware of.

Offshore broker

Offshore countries are extremely tempting for forex and binary options companies, mainly due to the reason that it is easy to register and start a business there. On top of that, offshore areas are famously known for their lack of regulation and absence of taxes. Here are the most popular offshore countries: Belize, Mauritius, Saint Vincent and the Grenadines, Marshall Islands, British Virgin Islands, Cayman Islands, Seychelles, Dominica, and Vanuatu.

The next big risk when dealing with financial institutions from these locations is that regulatory authorities in these areas do not pay much attention to compliance checking and supervision. Besides, companies are not required to report individual transactions. In essence, for you as a trader, it means that there is nothing to stop them from deleting your profitable trade or deny withdrawal.

They offer you instant profits with trading signals

Every signal system has its own unique design and relies on different algorithms of market analysis. However, overall, they consist of two parts. The first is mainly technical analysis of the past statistics which includes all the previous information about price changes, and the second is based on a current analysis of major events and how they might influence the price.

If the company offers you a system to identify the exact time when to place your trades and make instant profits – it should be a warning for you. While not all signal-sellers are scammers, but it should raise your suspicions if they offer you this kind of stuff only to force you to make a deposit.

To check if the firm is legit or not, you can just ask to show you the performance results audit of these signals which will immediately tell you whether the trades which were placed turned out to be profitable or not.

You are also free to ask for a password from company’s investors account on MetaTrader 4 and check whether trades placed using specific signal were profitable or not. In case if the company refuses to provide you with any kind of proof that these signals are worth investing in - then it should be a warning sign for you.

They are not regulated by anyone

This kind of information will most definitely be presented on the brokers webpage. A serious firm will be regulated by a respectful regulatory body. The leading regulator in the United Kingdom is the Financial Conduct Authority and Prudential Regulation Authority.

National Futures Association or Commodity Futures Trading Commission in the United States, the Swiss Federal Banking Commission in Switzerland and Investment Information Regulatory Organization of Canada in Canada.

Conclusion

While it is true that forex market is populated by a wide range of scam institutions, well-trained to get your last dollar out of you, there are also clean and reliable brokers. Just make sure to make some research about the firm which approached you recently, and it will save you from any additional headache.

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