There has been a small rise in certain parts of the world recently of forex scams appearing, attracting victims and leaving them in a worse financial position. Malaysia seems to be a hotbed of forex scams, with many young people in their 20s and 30s falling prey to them throughout 2016.
It’s easy to see why so many people get caught up in them, with promises of making huge profits through a get rich quick scheme. However, if you want to be a serious trader or investor and genuinely improve your finances, avoid them at all costs.
Recent Forex Scams
Unlicensed forex service companies have been signing people up to invest in offshore forex companies with promises of fast returns. Many operate on a multi-level marketing method, making money from registration, recruiting and forex investment fees. When the ‘company’ has enough money it then closes and disappears.
Being offshore means it is nearly impossible to legally prosecute any of them. This has led to calls for fresh measures to tackle forex scams, especially in Malaysia where many young people are borrowing from friends, families and loan sharks to sign up.
How to Spot One
A forex scam can easily be spotted by the terms that are offered seemingly too good to be true. Often this is because they are! While forex trading does involve a lot of risk and there is a chance of making large profits, it will not be done overnight.
Any supposed forex company promising a get rich quick scheme is probably lying and just after your sign-up fee. Even the most successful traders will have spent years building up their skills and wealth through the practice. There are no get rich quick schemes that actually work, especially in forex given the small margins between currency values.
Avoidance Tips
In order to avoid being roped in by a scam, the best advice is to trade through a regulated, professional platform. Other tips include:
- Google the product/scheme – shows any problems others have experienced
- Check the firm online – visit the website, LinkedIn profiles of staff to ensure it is legitimate
- Talk to people – ask experts if they are aware of it and reputation
- Try a demo account
- Regulation – find the forex regulation body and see if it is listed
These should all help you avoid being scammed when starting out on what will hopefully be a successful forex trading career.
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