Foreign Exchange Currency Trading Company Frauds

How to Spot Them

Working with a foreign exchange currency trading company can be effective, but many of them are scams. If a company has approached you about trading in the Forex market, you should be a little skeptical. Don't be skeptical because the foreign exchange market is a scam, but only because many companies involved in it are.

Check With the Authorities

In some cases, you may be considering opening an account with one of the many Forex brokers in the market. Before giving them your credit card number to fund your account, check with the proper authorities. Legitimate Forex brokers are part of regulating agencies. For example, in the United States, foreign exchange brokers have to answer to the Commodity Futures Trading Commission or CFTC and the National Futures Association or NFA.

If you're interested in a particular broker, you can visit the NFA website and find out about it. This will allow you to see what complaints are present about a broker. This is kind of like taking the Better Business Bureau, except its for brokers.

If you are treating outside the United States, you should be able to find a regulating agency for the area where the broker is located.

Almost every country or region has its own regulating agency that you can check with to find out more about a foreign exchange currency trading company. If the broker has a bad reputation with the regulating agency or if the agency has never heard broker, then you can feel fairly confident that you are working with a fraud. While there may be some exceptions to this rule, they are not common.

All Hype

One of the problems that you may come across in the Forex market is an overabundance of hype. For example, you may get an email from a spammer telling you about how you can make $1.2 billion in the next week with a one-time investment of $97. Ok, I might have exaggerated that a bit, but you'd be surprised what some people believe.

This is a Forex website (obviously) and I'm not going to tell you that the Forex market is a scam. You can make very good money if you know what you are doing. However, you should not continually be looking out for the Holy Grail that's going to basically be your own personal ATM. Speaking of which, you'll hear the ATM analogy a lot with scams. A trading system should be realistic and should be based on some type of successful method. If it sounds too good to be true, it usually is. Finding a good foreign exchange currency trading company to work with is possible, if you're willing to do a little homework and dig.

Don't Mention the Risk

No matter what anyone tells you, investing in the Forex market carries with it some risk. You are always putting your money at risk and you should anticipate the possibility of losing it. If a company like a broker or a system seller tells you that there is no risk, you should turn around and run screaming into the hills. Either that or just click the "X" on your browser window and go about your day.

Iraqi Dinar Scams

In recent months, a large number of scams involving the Iraqi Dinar have been going around. While it is theoretically possible that some people could make money by trading the Iraqi Dinar, most of these deals are scams. Don't expect the Dinar to be revalued at any point in the future and you end up making millions of dollars off of it. It's usually best, just to stay away from these deals.

Considerations

For the most part, try to use your God-given common sense to avoid scams in the Forex market. Here on Forex Trading Rookie, you can also find resources to help you avoid getting scammed. For example, if you're in the market for a Forex broker, feel free to check out our Forex broker reviews here .

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