It is believed that every day 3 trillion dollars is being traded on the Forex market. In fact in a report published in 2009 by the Bank of International Settlements it estimated that the total number of Forex related transactions to take place on any given day was around $3.2 trillion.
But with so much money being invested the issue of scams relating to the Foreign Exchange market are on the increase. This is because there is the lure for some to be able to earn a very large amount of money in a very limited amount of time.
Although a large number of the scams that use to take place have now ceased because of certain actions to enforce the rules are carried out by the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association).
Even so with such rules and regulations in place there are still some new scams appearing along with some of the old ones remaining. If you want to avoid becoming a victim of such a Forex scam there are certain things you need to be aware of. Below we offer some tips to help you identify those that are trying to get you to invest your money in a scheme that isn’t all that it seems.
This is something that some traders like to use to help them see a healthy return on their investment. These traders will fill in a stop loss or entry order at a price that is much worse than that they expect to execute it for. As a result of this it increases the amount of the Forex trade at their end.
2. Stop Hunting
This is something that a lot of traders are upset with and some brokers practice it. They use this technique to trigger a trader stop loss even though the actual Forex price is several pips away still. The kinds of brokers who are often involved with this form of scam are commonly known as market makers.
The best way for you to actually detect if such is something a Forex broker is involved with this type of scam is to see how many different trading platforms they open. If they open three they do this in order to see what the actual Forex market price is before it has gotten to the stop loss level on other ones.
3. Don’t Pay Out Trading Profits
If you have come across a number of comments left with regards to this matter then avoid such brokers at all costs. To put it quite simply these Forex brokers are using your money to make a profit for themselves.
4. Close Account Without Any Reason
This is a very quick an easy way for a less reputable Forex broker to appropriate funds from you. They simply allow you to open an account and then without giving any valid reasons for doing so they close your account without informing you. To avoid such a scam visit various online forums and you will see comments left by others who have already been a victim of such.