Forex investment is not a scam, but be aware of phony schemes which impersonate as legitimate Forex investment.
The fight with phony scheme is not over yet.
Even though the number of investment scam has significantly lowered, fraudsters often come out with new types of investments that specially designed to con innocent investors in the name of Forex.
Identify a legitimate investment.
The number one target audience for fraudsters are the unwary public who have no clue in this field but is in high spirit to give it a whirl. Therefore, knowing how to spot a Forex scam is essential.
Fraudsters often mislead the public into the concept of ‘Forex is a promise of quick fortunes’ by promising a very high return to their investors. This can be a promised returns of over 100% monthly. Trading profit is always prone to many factors, including but not limited to the market’s supply and demand, economic development and sometimes trader’s mistakes. All these factors could have easily affected the Profit/Loss (P/L) of every trading cycle. So when such handsome returns are promised, this could be the potential first giveaway of a Forex scam.
One of the fraudsters’ gimmicks is by convincing the public about the no-loss system they claim to have. This system will help them gain in their trading without any loss. This sure sounds tempting to novice investors and traders but unfortunately, it’s too good to be true. As the saying goes, the only free cheese is in the mouse trap.
A legitimate investment would often provide a platform which showcase the monthly trade records and performance of the investment scheme. Investors are also provided with the access to the MT4 Investor Account of the respective investment. The Investor Account allows investors to check on the balance, trade records and other histories.
To effectively prevent the public from falling into a fraudulent investment scheme, the first thing everyone needs to do is fully understand what is Forex all about. Do not act in haste and educate yourself with Forex knowledge is one of the best ways to prevent yourself from getting manipulated and used for not knowing better. With the right knowledge, the public is literally immune to these scams because they can identify the legitimacy of the investment on their own when fraudster knocks. One doesn’t need to be financial literate to spot an investment scam but the public should conduct their own due diligence on whatever investment they are going to invest.
As a safety measure, invest in established investments. As a rule of thumb, remember that legitimate investment does not promise a high monthly returns and would often provides a platform for investors to study the trade records and performance.