Forex Trading Risk – Beware of Forex Scams
Who hasn’t seen an advertisement on the Internet at least once, offering to make quick money by doing “Forex trading”? Beware of misleading promises and forex trading risks leading you to fall into the trap of forex scams, which could cost you a lot of money.
Is Forex trading high risk?
Forex corresponds to the financial market of currencies, or “foreign exchange market”. This market is not organized like the financial markets on which other financial securities are bought and sold, such as shares and stock markets. A 2016 report from the BIS (Bank for International Settlements) estimates that the volumes traded daily in Forex exceed $ 5 trillion.
Forex trading scams risks are a part of this trading market. As on any other financial market, you will find those wanting to take advantage of inexperienced clients and users. Before opening a forex account on a forex brokerage platform, take time to read forex brokerage reviews and, after that, acquire some knowledge of risk-free forex trading strategies.
Forex trading risk lies in the very character of binary options trading. Binary options are trading instruments largely implemented in Forex trading intended to speculate over a very short period, up to a few minutes. It involves betting on the evolution of financial security, such as a currency or an index. If you have anticipated the course, you can earn a sum determined at the start. Otherwise, you lose your entire stake. It’s practically impossible to predict evolution in such a short term, even for professionals. It is, therefore, really a gamble on chance, which can be expensive.
Why Can Forex Scammers Lead You To Big Losses?
Forex can be dangerous for retailers because its mechanisms are more complex than they appear. It is, first and foremost, a speculative market. Most of the exchanges are carried out by professionals who wish to hedge other positions taken on the financial markets, or bet on the rise or fall on several currencies.
It is also an “over-the-counter” market: there is no intermediary. Buyer and seller deal live, and prices constantly fluctuate, with no one being able to predict short-term developments.
A professional never invests without protecting himself as much as possible against the vagaries of potential increases or decreases. The subscription of other financial instruments allows him to do this. But these hedging systems remain risky, and their intricacies are far from accessible to the general public.
As a result, some have lost all of their money in just a few minutes. All these risks can be encountered even under normal Forex conditions on platforms authorized to have a specific country’s trading activity. So you can imagine what adversities you may face on illegal sites, which often hide scams operated from abroad.
Forex exchange scam platforms
The magic of the Internet means that anyone can create a site, whatever the offer is. A forex platform can quickly appear very professional with a little work and inspire confidence (fake addresses, fake names, fake photos, fake registration numbers, fake international awards). Unauthorized platforms and sites are gradually identified by financial authorities and blacklisted. The blacklists update every couple of months.
The techniques of the Forex fraud platforms to convince you to invest are very well smooth and effective. Miracles do not exist, and losses are, in most cases, final. In the case of a real scam, the solutions are unfortunately very limited. Mainly because most of the crooks operate from abroad, the nightmare can continue because once you have lost money, fake professionals may offer to help you recover the lost money. After a period of building confidence (false identity in particular), they ask you for personal information (which they will use against you) and to pay a sum of money to be able to act.
If you suspect that you have been scammed, you can file a complaint right away. When it comes to trading as with any investment, always beware of promises of quick and easy wins. They are often only intended to enrich the people who offer them to you.