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How To Know If You're Involved in a Trading Scam

By SiliconIndia   |   Friday, 01 September 2017, 09:55 Hrs
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Forex trading is becoming increasing popular because the process of trading currency can be highly beneficial. However, there are a number of trading scams targeting individuals who are new to the business. There are brokers who are reliable and trustworthy but it is hard to tell these apart from those who aren’t.  Binary trading is another popular new type of trading which is also vulnerable to scams. Fortunately, there are plenty of guides to help you avoid scams online. Here’s how to know if you have been involved in a Forex trading scam.

Communication Breakdown

The first warning sign of a Forex trading scam is usually communication failing. Typical red flags include the broker failing to respond to emails or phone calls for an extended period of time. Watch out for the broker being vague about details of a trade. A lack of communication does not always indicate that individuals have been involved in a scam but it is important that it is addressed early. Sometimes simply stating a preference for regular communication is enough to resolve the issue. However, if the trader cannot get in touch with the broker and is unable to withdraw money from the trading account, then this is when it is time to seek legal advice. This is also the case if they’re not keeping you up to date with the latest industry news, or ignoring things that could potentially cause your trading investments to fail, such as nations facing financial threats, or important global market changes.

Sign Up Process Fails

Some people involved in trading scams have found themselves unable to complete sign up processes on their chosen broker’s website. This is a good indicator that the broker is a fraud. The broker should be providing the trader with a trading platform, demonstration and demo account in order to get started. Avoid proceeding any further with brokers when this happens, otherwise you could find yourself being the victim of a scam.

Read the Fine Print

When opening a trading account it is important to read all of the available information. Common loopholes to watch out for include the broker claiming bonuses or additional income from the trader. It is best to be knowledgeable about the entire processprior to making any formal agreements. Remember that incentives to sign up may be used against the trader at a later date, so be careful before finding yourself in a contract with a broker who does not have your best interests at heart.

Unable To Withdraw Money

The biggest warning sign that you are involved in a trading scam is that your ability to withdraw money from your trading account becoming suddenly blocked. To avoid this being extremely damaging to your personal and business finances, it is best to begin trading with a small amount of money. Trade with a small account for a few months to start with, if this is proving to be unproblematic and successful you can then consider trying to expand your trading. However, if you have problems during this period, which cannot be resolved by discussing them with your broker, it is best to close the account.

Read Online Reviews

Before you agree to anything, make sure you do your research. Look out for common complaints such as being unable to withdraw money, or having brokers which disappear after a few weeks. There have been a number of high profile trading scams publicised in the media recently, it is valuable for potential traders to familiarise themselves with common scams. If you are unfortunate enough to have bad experience, try to help prevent others having the same problem by sharing your experiences online in detail. This will help to prevent the rise of fraudulent brokers. 

It is important to remember that occasionally, traders can make simple mistakes which they interpret as their brokers attempting to scam them. Making accusations can seriously damage the relationship between trader and broker. However, if you have done your research, and feel that you are being put in a position which is not benefiting you, it is best to approach the broker for an explanation. If you are not satisfied with your explanation, or feel that you have encountered several of these warning signs, it is possible that you have been involved in a trading scam. To prevent scams from being highly damaging, undertake in depth research into your chosen broker and begin trading with a small amount of capital for the first few months.

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