Beware of Aggressive Marketing Strategies While Choosing a Forex Broker
With a daily trading volume of $5.1 trillion, the forex market attracts many new investors every day.
29 June 2021 07:42 PM
With a daily trading volume of $5.1 trillion, the forex market attracts many new investors every day. There are a lot of brokers offering service for a long time. Nowadays many new brokers are coming, some of them just trying to scam. After depositing they closed account and didn’t response.
However, like any other business involving money, forex is not free from scams, and that too is enormous. Forex brokers basically commit these scams. Although the forex market is riding high on its swiftly achieved success, it has also become very complex, increasing the chances of traders coming across fraud FX brokers.
How Forex Brokers Cheat Traders
Aggressive marketing is the major tool used by online forex brokers to lure investors into scams or frauds. They promote lucrative moneymaking schemes and promotional offers on the Internet, television, and newspaper. Usually novice, but sometimes even experienced, traders fall prey to such schemes and end up burning a hole in their pockets.
Many forex brokers claim to offer investors currency trading strategies sans any financial risks. This is obviously a fraud, as no financial transaction can be free of any risk. Where there is a money game, there is a risk. Traders should steer clear of such forex brokers.
Forex brokers are regulated by authorities such as the National Futures Association or the United States Commodity Futures Trading Commission. While searching for an online forex broker, you may even come across those who falsely claim to be registered with the NFA or the CFTC. This makes it important for investors to confirm with the regulatory authority whether the broker is actually listed with it or not and what is the track record. Equally important is to attentively go through the various contract terms and conditions proposed to you.
Many times, forex brokers cheat investors by offering a guarantee of large returns on investment. These are traps set to attract potential traders who start believing that they will get back invested money along with profits. However, considering the high volatility in the forex market, it is almost impossible to guarantee profits to traders. Traders should keep their eyes open for schemes that sound too good to believe.