Recognizing Common Forex Scams
Online Forex trading has no doubt increased financial investment opportunities in recent years, at the same time however, there has also been an increase trading scams. There is a lot of forex trading materials online available which can make you rich overnight. But how can you tell if what they advertise is legal and valid or not? The CFTC (Commodity Futures Trading Commission) urges consumers to be alert when promoters of foreign currency trading claim that their services or account management will earn high profits with minimal risks. The information in this article will provide you with some practical tips to help you recognize some of the forex scams that are out there today.
Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The stated mission of the CFTC is to protect market users and the public from manipulation, fraud and dishonest and banded practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and sound financial futures and option markets.
CFTC is legally in charge of regulating the foreign exchange market of US. The CFTC works to ensure the integrity of the commodity and financial futures markets. It protects the public and market users from fraud, manipulation, and abusive practices while fostering an open marketplace for trading commodity futures as well as foreign currency. Some of the guidelines suggested by CFTC via its programs to avoid the forex plots are referenced in this article.
If you plan on investing in forex, you should be keenly knowledgeable about the future market users and the trends which may influence the forex trading. With the knowledge of this, you will be able to properly judge the credibility of the claims made by the forex product manufactures and thus stay away from the Forex trading plots.
It is highly essential that the gullible people involved in the forex trading protect themselves against forex scams by sufficient legal proceedings; which is strongly suggested by CFTC. You need to be mentally on guard before stepping into any of the next levels in Forex market or while purchasing the forex software until there are enough facts to prove otherwise. There are some manufacturers who target gullible people from a particular area by offering special allowances to them.
Sidestep any forex trading involving Interbank Market because it is not very secure as it deals with currency transactions over a loose network. The interbank market is the top-level Forex Trade Market where banks exchange different currencies. Another signal that caution should be taken of possible forex ploys is when the concerned persons or companies try to coax you into transferring or sending money to them in a very short notice. Do not encourage unsolicited telephone calls in which companies or brokers claim they can provide you with the only best forex trading assistance available. Understanding more about futures trading will help you stay well-versed about the Forex Trade Market.
The only funds that should ever be used to speculate in foreign currency trading, or any type of highly speculative investment, are funds that represent risk capital; in other words, funds you can afford to lose without affecting your financial situation. Forex trading is risky, don’t be pressured into an immediate decision and always use your common sense before embarking in any type of trade. Keep away from those brokerage companies who guarantee you a huge return and keep in mind that nothing in currency trading is risk free. Unfortunately Forex scams are increasing at an alarming rate; however you do not have to fall victim to their tactics.
About the Author
Regina enjoys writing on a variety of topics and believes that readers will be informed by her distinct point of view.