- PPF Points
- 1,701
Foreign Exchange ( Forex ) Trading Scams
Beware forex scams and too good to be true adverts
We have often heard of foreign exchange (“forex”) scams which defraud individual investors or traders by convincing them that they can expect to achieve abnormally high returns through trading or investing in the forex market. According to a recent report by the Wall Street Journal, the US Commodity Futures Trading Commission (CFTC) reported that average individual forex traders who fell victims to forex scams loses about S$15,000 each.
One form of outright scam is when certain websites or even companies would make bold promises to investors that their initial investment will grow exponentially (with claims ranging from 5% per month to even 100% per month) if they put their money in the forex market. The con artists would usually entice investors by showing them high returns when they invest small sums but once investors increase the quantum of investment, that’s when trouble begins. In actual fact, their money are never really invested in the forex market through any legitimate dealer, but simply disappear or never refunded upon request.
Another form of outright scam is when certain websites or brokers promise zero costs or zero pips for trading forex through them. In actual fact, these brokers would make excuses when investors try to withdraw their money. There have been instances when some of these fly by night forex brokers refuse to allow any withdrawals. They would also trade against the investors by manipulating the spreads and also move the spread range upwards so that when the trader sells, he is selling at a lower than normal price and when he buys, he is buying higher than a normal price.
Having said that, it does not mean forex market is completely off limits to everyone. There are many people that I know off who are able to make a living from trading in the forex market. We just have to be aware of and alert to the risks and scams out there in the market.
For example, one should try to stick with more reputable forex brokers, such as those that are bank backed or accredited by US authorities such as the National Futures Association. It would also be good if they are based in big countries like US or in Switzerland directly rather than some remote countries.
Also it is always a good idea to start with small capital with a new broker, make a few withdrawals to ensure can take out money before increasing the capital with the forex broker. It is also a good idea to "Google" the forex broker......simply google search "forex broker review".
If you come across something that appears to be too good to be true, chances are it is the case………I do not believe in free lunches except during AGM or results briefings.
Cheers
Beware forex scams and too good to be true adverts
We have often heard of foreign exchange (“forex”) scams which defraud individual investors or traders by convincing them that they can expect to achieve abnormally high returns through trading or investing in the forex market. According to a recent report by the Wall Street Journal, the US Commodity Futures Trading Commission (CFTC) reported that average individual forex traders who fell victims to forex scams loses about S$15,000 each.
One form of outright scam is when certain websites or even companies would make bold promises to investors that their initial investment will grow exponentially (with claims ranging from 5% per month to even 100% per month) if they put their money in the forex market. The con artists would usually entice investors by showing them high returns when they invest small sums but once investors increase the quantum of investment, that’s when trouble begins. In actual fact, their money are never really invested in the forex market through any legitimate dealer, but simply disappear or never refunded upon request.
Another form of outright scam is when certain websites or brokers promise zero costs or zero pips for trading forex through them. In actual fact, these brokers would make excuses when investors try to withdraw their money. There have been instances when some of these fly by night forex brokers refuse to allow any withdrawals. They would also trade against the investors by manipulating the spreads and also move the spread range upwards so that when the trader sells, he is selling at a lower than normal price and when he buys, he is buying higher than a normal price.
Having said that, it does not mean forex market is completely off limits to everyone. There are many people that I know off who are able to make a living from trading in the forex market. We just have to be aware of and alert to the risks and scams out there in the market.
For example, one should try to stick with more reputable forex brokers, such as those that are bank backed or accredited by US authorities such as the National Futures Association. It would also be good if they are based in big countries like US or in Switzerland directly rather than some remote countries.
Also it is always a good idea to start with small capital with a new broker, make a few withdrawals to ensure can take out money before increasing the capital with the forex broker. It is also a good idea to "Google" the forex broker......simply google search "forex broker review".
If you come across something that appears to be too good to be true, chances are it is the case………I do not believe in free lunches except during AGM or results briefings.
Cheers