Is Forex a Scam?
Forex is not a scam, but there are numerous scams associated with forex. Forex trading is a legitimate business that can be profitable, but can also result in extensive loss of funds. A forex scam can be failure to return money owed to traders such as when you wish to withdraw funds or terminate an account, a lack of transparency in the pricing and execution of transactions, unresponsiveness to customer complaints, and the targeting of vulnerable individuals.
What should I look out for?
See our checklist below:
- Promises of high profits
Promises of easy, fast profits are often a sign of a forex scam. There are risks involved in forex trading.
Is the broker regulated with the relevant authority in your region? If not, there is a good chance you are not adequately protected.
- Education and training
If you are a novice, it is absolutely essential to equip yourself with knowledge before you start trading. How educational is the broker? Is the trading method easy to understand from the website? What tools and resources are available to help you learn?
Are all the service fees displayed clearly? Are the spreads for currency pairs fixed and clearly stated?
Your relationship with your broker is a two-way street. Is the broker flexible enough for you to start off small with low leverage and grow more sophisticated in your trading when you are ready? A good broker will ensure that you are supported by a personal account service manager who acts as a guide as you take your first steps in forex trading.
Do not use a broker that does not have well-known Internet and payment security systems. Ask if the site is secured by the likes of VeriSign or SSL. And ask how credit card clearing is handled.
- The Human Element
Do they have physical office locations around the world? Can you contact your broker and get one-on-one service from a support representative?
- Social Media Presence
With the rise of social media it has become even easier to find out how genuine a broker is. Does your broker participate in open communication with their clients through any of the more established networks like Facebook, Linked In or Twitter?
How to get started in forex trading?
Grasped the basics of forex trading, you are ready for the next step. Find out about choosing a broker, using a demo account, charting basics, and many other things that contribute to your forex foundation.
Can anyone trade like a Forex Professional?
Anyone can trade and profit, educational tools to learn the basics and develop a strategy are accessible to everyone.
What is currency trading?
The currency trading market is a multi trillion dollar market where world currencies are exchanged back and forth on a daily basis.
How much do currency traders make?
In general, how much money you make depends on what currencies you trade, what leverage you use, and how much capital you have.
Contract for Difference-What is it?
Contract for Difference or popularly known as CFD is a trading vehicle, a contract that gives the trader access to share or asset price movements without having to own the underlying shares or asset. In addition to shares, you can also trade commodities, forex, stock indices and many other markets on margin on one trading account.
Why is forex risk management important?
Risk management is all about keeping your risk under control. The more controlled your risk is, the more flexible you can be when you need to be. Risk management is a combination of multiple ideas to control your trading risk. It can be limiting your trade lot size, hedging, trading only during certain hours or days, or knowing when to take losses.
What are key features I should look for when choosing a broker?
Pay attention to these 3 points:
- Who regulates the broker
- The cost of trading
- The range of assets