The Forex market is a vast market that is incredibly lucrative, and it’s easy to fall prey to fraudsters. Whether you’re a beginner or a seasoned investor, there’s a forex scam to suit every style. In this article, we’ll discuss what to look for in a forex scam to make sure you don’t fall victim to it. While these schemes can be tricky to spot, a few key tips can help you stay safe.
First and foremost, you should know that there are many Forex scams on the market. These brokers make the process even harder for you by making promises that are unrealistic. For example, when they promise you a million dollar return on a small investment, you should be suspicious. The high returns you’re promised are entirely dependent on how volatile the market is, and are usually unrealistic. You should also avoid those who claim to be experts in forex and have a track record of success.
Another warning sign of a scam is a large spread. A normal spread is two to three points in the EUR/USD. However, if you’re offered a seven-pip spread, you should be careful. These are the smallest price movements. Most major currency pairs have four decimal places. Additionally, Forex scammers use jargon and lengthy ‘risk disclosure’ agreements to confuse traders. This makes it very difficult for investors to withdraw their money and swindle them out of their money.