Forex Trading Traps - How You Can Avoid These 4 Top Frauds in Forex Trading
As forex trading is a highly lucrative business, frauds, manipulation and abusive trade practices can happen. To protect you hard earned savings, you need to know what are the top frauds and how to avoid them.
Forex brokers should be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC) and a NFA member. The CFTC and NFA were made to protect the public against fraud, manipulation, and abusive trade practices. Never make a check or bank wire payable to anyone other that a FCM registered with the NFA.
1. Doing Research: It is most important to thoroughly research Forex trading, and any companies you may be thinking of trading forex with, before making any kind of investments. Be sure to check out any claims made by a company, and make sure they are indeed members of one of these organizations, before even thinking of dealing with them. Some people just park their hard-earned cash with some forex trading organizations without first doing research on that company. It is a risk.
2. Stay Away From Promises That Sound Too Good to Be True: Those Get-rich-quick schemes, including those involving forex trading, tend to be frauds. There is no easy way of learning how to trade forex and earn consistent profits everytime. Always remember that there is no such thing as a "free lunch.", you will really need to spend some time to learn forex basics. Some big investors invest with a large amount of funds, which are never to be seen again if deposited with those schemes.
3. Avoid Any Forex Company that Assures You Large Profits: Be extremely wary of those forex trading companies that guarantee profits. Nobody can offer sure guarantees where currency trading is concerned. In many cases, those claims are false. Learn to trade forex by yourself with a forex trading guide or ebook will be good enough, then slowly make your way up. The following are examples of statements that are most likely are fraudulent:
"Guaranteed to make a ROI of 40-50% within few days."
4. Avoid promises with little or zero risk trading: The guarantee of risk-free forex trading is another fraudulent claim. The fact that more than 90% of people failed in forex trading means there are risks in losing. the currency market is not the place to put any funds that you cannot afford to lose. No can will know how the markets will be performing in the future. Therefore, it's either low risk or high risk trading, and NOT NO risk! Anyone who suggests that forex trading is risk-free is likely to be a liar or fraudster.
For those new in forex trading, you will find the contents in my free ebook very useful as there is free forex trading system for you. And for advanced traders, you will also find value added stuffs inside the ebook, so try not to be attracted to those claims which can make you a lot of money, learning and trading by yourself is the best.
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ABOUT THE AUTHOR
The good news is I'm giving access to my 56-page "Forex Trading To Riches" free for now. Here's your chance to learn more ways to be a successful forex trader and discover a time tested, proven trading system. You can download this powerful ebook free at http://www.forextradingpower.com
The author, Daniel S, is the owner of http://www.ForexTradingPower.com where he provides premium forex tips and resources.