Scam artists will always chase the money so there is no doubting the appeal of Forex to them.
As the popularity of Forex increases, so does the number of dishonest people who are willing to commit fraud in order to steal a piece of the action for themselves.
Whilst Forex scams are often easily spotted by experienced traders, newer speculators may succumb as they could have problems knowing the difference between what is genuine and what is not.
It should go without saying that it is essential to thoroughly research Forex trading, and any companies you may be thinking of trading with, before making any kind of investments.
Whilst the government may offer some guarantees if things go wrong, such as the company being investigated by the SEC for fraud, it is unlikely that they will offer enough funds to cover losses incurred by the smaller investor.
The guarantee of risk-free trading should be an immediate red flag.
The ability to make large amounts of money is tempered by the fact that there is a very real risk of losing large amounts too.
Therefore, anyone who suggests that there is no risk inherent with Forex trading is likely to be misinformed, a liar, or more likely a fraudster.
Successful trading in Forex requires experience, strategy, discipline and knowledge.
There are no magic formulas, shortcuts or omnipresent pieces of software that can beat the system and guarantee that you will make a profit.
Another red flag that indicates a Forex scam is the guarantee of profits.
Nobody can offer cast-iron guarantees where Forex is concerned.
Think about it – if it was possible to make guaranteed profits in Forex trading then no-one would be setting up a business to show others how to do it.
Instead, they would keep the secret to themselves and would utilise all their time in successfully trading themselves up to billionaire status.
Forex scam artists have another tactic that they will often employ – the employment opportunity for people using their system.
Generally, this is a trick to get you to spend your money with them.
What they are doing is looking for people with capital who can fund their operation.
Typically, they will promise to offer firm and good money to anyone using their system.
What they are actually doing, however, is luring people into using their training systems before trying to convince them that they have excelled themselves so much that they should start using their real money in order to make a fortune.
Whilst reputable Forex trading websites will be a member of either the NFA or the CFCA, scam sites will not be.
Therefore, be sure to check out any claims made by a company, and satisfy yourself that they are indeed members of one of these organisations, well in advance of dealing with them.
Remember also that Forex is a virtually unregulated means of trading money.
Often, Forex scams are highly technical, involving brokers who manipulate prices in ways that are not easily detected by the average investor.
Therefore, it is essential to keep your wits about you and put in research time before committing large sums of money to any kind of Forex deal.