Most Famous Forex Scams
Did You Know?
The forex market is the leading financial market in the world. It comprises over $5 trillion tradings every single day.
Not only does it permit central banks and firms to trade with each other. The forex market also allows risk-takers to take advantage of a market that trades 24 hours a day, five days a week.
There has always been a simpler type of access to the world’s forex market.
At the click of a button, you may be trading the Euro, British pound, Japanese yen, US dollar, or even the Russian ruble!
Additionally, there are several currency pairings to trade. This means you are open to finding the ones that attract you most.
However, while the financial rewards of trading in the forex market seem profitable, it is not considered simple.
Having an insightful trading education, a suitable funded trading account, and awareness of risk management techniques are essential.
Unfortunately, many dishonest individuals will try to scam investors through forex trading scams.
In this article, you will discover more about distinguishing forex scams and where do they usually arise from. The article also comprises of justifications and answers on how to avoid being scammed.
Get to know more by reading further!
Forex scams will be around for as long as the Forex market exists.
Moreover, if programs are evolving, scammers are always somewhat nearby. They will be striving to extract your money.
Could there be a way out of this dilemma?
Introduction: How To Detect A Forex Scam?
Distinguishing a forex scam is quite complicated. In fact, there is no single way to spot forex scams.
Identifying a Forex scam can be both tough and time-consuming. In order to save your hard-earned cash from those scammers, you have to do that challenging job before investing.
Always put in mind to not tumble into any investment prospect that guarantees a super-desirable return.
So, before placing your hard-earned money with just anyone, be sure to do your own investigation so that you can prevent fraudulent brokers and scammers.
Just take into account that, despite strict policies, there are a lot out there trying to put you down.
You should understand forex trading properly. Do not seek any shortcuts, and step aside from these scammers.
Understand The Different Phrases In Forex Scam
What is Forex Copy Trading?
Copy-trading enables traders to copy trades performed by other investors in the financial markets. There are several ways to copy-trade another investor.
The Goal of Copy Trading
The objective of copy trading is for the trader to have the same opinions as to the investor they are copying. When copying another trader, one doesn’t receive the outline of the trader’s strategy, but merely pursues their trades blindly. This contrasts with mirror trading, which allows one to copy a trader’s actual approaches.
What is Forex Hedge?
A forex hedge is a business deal executed to protect a current or expected position from an undesirable move in exchange rates.
Forex hedges operate through a comprehensive range of market participants, comprising investors, traders, and firms.
By using a forex hedge accurately, an entity who is long a foreign currency pair or anticipating being in the future via a transaction can safeguard from downside risks.
On the other hand, a trader or financier who is short a foreign currency pair can defend versus upside risk using a forex hedge.
Forex technical analysis indicators generally predict price changes in the currency market. They are computations that take the volume and price of a specific financial instrument into account.
By using Forex indicators, traders can make choices about market entry and exit.
What Are The Best Currency Pairs To Trade?
If you have a genuine interest in investing in forex trading, you should not jump in headfirst to the fast-paced world of forex.
First, you’ll need to be aware of the currency pairs that trade most often and the most profitable pairs.
The following currency pairs registered below are not certainly the best Forex pairs to trade. But they have great liquidity, and dominate most foreign exchange transactions:
- EUR/USD(Euro – US Dollar)
- USD/JPY(US dollar – Japanese Yen)
- GBP/USD(British Pound – US Dollar)
- AUD/USD(Australian Dollar – US Dollar)
- USD/CHF(US Dollar – Swiss Franc)
- USD/CAD(US Dollar – Canadian Dollar)
The principles of these chief currencies keep fluctuating according to each other. This is as trade volumes between the two countries change every minute.
These pairs are associated with countries that have better financial power, and the countries with a high volume of trade performed worldwide.
Usually, these pairs are the most volatile ones, meaning that the price variations that occur during the day can be the greatest.
Kinds of Fraudulent Financial Activities
- Forex Ponzi Schemes
These are fraudulent investments, never lawful ones. They pledge above-average returns but always fail in the long run.
At first, they make excellent returns. They use the main investment from new investors to make the above-average returns to the old investors. After paying these gains, they use all their reserves to get new investors.
Eventually, these ideas fall apart. They cannot keep hiring enough new people to continue paying returns to the old investors.
- Forex Pyramid Scheme
It is an illegal investment scam based on a ranked setup of network marketing.
New recruits make up the basis of the pyramid and support the funding. It is also so-called returns, in the way of new money expenditures to the earlier investors/recruits arranged above them in the scheme.
A pyramid scheme does not typically include the selling of products.
Instead, it depends on the continual inflow of money from further investors that works its way to the top of the pyramid. Moreover, this means that multilevel marketing schemes are not categorized as pyramid schemes and are not necessarily fraudulent.
Examples of Forex Broker Website Scam
- Dukascopy Scam
Dukascopy is a Swiss online bank. It focuses on mobile and online trading, financial services, and banking.
Dukascopy Bank has three official branches. The Dukascopy Bank’s headquarters and offices are situated in Switzerland, Singapore, Geneva, Moscow, Kuala Lumpur, Kyiv, Hong Kong, Dubai, and Tokyo.
The firm has around 300 employees.
Recently, the firm made a statement about a fraudulent broker (Dukas-broker.ru.) that manipulated Dukascopy’s brand and logo to fascinate clients.
It has cautioned versus a Russian-focused crypto and forex trading source that has been mistakenly claiming affiliation with its authorized brand.
Dukascopy validated that it has no connection with the scam company and informed everyone to avoid it entirely.
- EuropeFX Scam
It is a trading business that is regulated by the Cyprus Securities and Exchange Commission (CySEC).
The regulator is acknowledged all over the European Economic Zone (EEZ), which means that they’re certified to do business within the entire zone.
However, CySEC has a notorious reputation for tolerating shady practices within their system of brokers.
The Internet is a haven for Forex scammers. They always manage to target novices or uneducated traders.
Securing a good Forex trading education is the best way to avoid getting scammed.
You should be aware of everything before you engage in the markets. Once you get to grips with the markets, you are no longer an easy target.
Keep reading and become involved in learning how. Discover the best in you and prosper more!
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