Avoid Forex Scams

Table of Contents

What is Forex?

Forex (short for foreign exchange) is a trading instrument where two parties are selling or buying a foreign currency pair. There are many trading pairs out there such as the US dollar versus the euro, which is known as EURUSD. When a trader wants to buy a US dollar for EURUSD, the trader must first take the currency pair from the bookmakers, then take out cash (deposits) to purchase the pair at the offer price. This is then recorded as a trade with the bookmakers. When a trader wants to sell a US dollar for EURUSD, the trader must first take the currency pair from the bookmakers, then take out cash (deposits) to sell the pair at the offer price. This is recorded as a trade with the bookmakers. These transactions are recorded on a computer to track the price fluctuations.

How Forex Scams Work

A few of these frauds will target you with a good business model, giving you extremely high returns in just a few weeks. However, there are several red flags to look out for and the biggest one is that the broker does not have you fill out a free online chat form. This means that the broker is not making money from your trade and will try to fleece you out of all the money you have sent. Another red flag is the payment terms. A legitimate forex broker does not accept payment within a very short timeframe, and this is because the risk involved is very high. The average annual interest on a Forex position is about 1%.

How To Spot A Fraud

There are many reliable forex brokerages that have genuine business models.

The Dangers of Forex Scams

On the other hand, it is very difficult to get a lucrative position in the forex market and the market is one that changes quickly and everything that is said on the market is like a powerful and persuasive knife hidden in a flower. You have to be very careful, that is why it is very important that you see a trusted and established broker. There are brokerages that have been around for years and that you can trust. They have a solid reputation and brand and they are managed by professionals. This is one of the best reasons to put your trust in them as the most reliable source for the Forex market.

No Guarantee

One of the most common reasons why many people start their trading journey on the Forex market is the non-existent trading guarantee.

How to Avoid Forex Scams

The first step to avoid the forex scams and make yourself successful in trading is to be very skeptical and to do proper research. If you cannot trade effectively, do not even bother with forex trading as your first option, instead, just stick to a bank or investment account that allows you to carry out relatively safe trades without having to carry a lot of risk. This is because when you are dealing with small amounts of money it is easy for fraudsters to build up fake accounts. Also, check for trading statistics, especially from brokerages that have a very high client base. They usually have a high client count and this makes them more likely to have a scam or client service problem.

Reputation is also key in this market, look for a trading desk with a stellar reputation.


If you are new to Forex trading, then you should start with Learn Forex Today, if you have any questions about trading this is the best place for you to ask questions. If you are an experienced trader you can read Forex News Today to stay informed with the latest market fluctuations and in case you are thinking of making a trade, you can check out our Forex Alerts. Good luck on your trading journey and remember to read many pages.