Beware of Forex Scams

By J. Star

Forex (foreign currency exchange) is a relatively unregulated market with high potential for gains as well as high potential for loss. These two factors, high potential for gain and soft regulation, have attracted swindlers from all over the world. These scam artists use the allure of Forex to steal millions from unsuspecting investors. Let me start by showing an example of a current Forex scam.

All it takes is a couple minutes on Google and I quickly find a few Forex scams. Take this one for example: The company has bought Google ad space and their site shows on the first page of my search. The website reads "Guaranteed 200% Interest Per Month", Minimum Deposit: $5000, Maximum Deposit: $999,999, Investment Length: 30 days; Fast Withdrawals!" To the novice Forex trader it sounds great. All I have to do is send them my money and I will soon be making 200% per month - wow!

If you continue reading you find that they use a lot of flowery verbiage to explain HOW they trade. They talk about "security" of funds and the "stability" of their company. On the 'About Us' page they have headlines like "Professionalism", "Reliability", "Trust", and my personal favorite "Process Ability". Under 'Process Ability" they write: "Correct prediction of reversal of exchange rates outflow by using timely analysis of our department, received news, their processing, and also positions' control during technical and fundamental analysis;". It only takes 5 seconds of reading this site for a REAL Forex trader to see the scam. But to the unsuspecting person, who has heard of the huge potential in Forex, this sounds like a dream come true.

So how does the Forex newbie avoid Forex scams and find real Forex products?

1. First off, remember the saying "If it sounds too good to be true, it probably is." There is NO such thing as guaranteed returns in Forex let alone a guaranteed 200% per month. Forex can be VERY profitable but it is NOT easy and there is rarely weekly consistency. If you see a Forex company including automated Forex systems making such claims - beware.
2. Two. Research the company presenting the opportunity. In the case we discussed a moment ago, it only takes a quick look at the company's website registration to find out there are inconsistencies in the story. The website was registered in July of this year but the company claims to have started in June. Also, they provide false business contact information in their site registration.
3. Never give up control of your money. In Forex, you NEVER should have to send your money to someone other than a fully regulated Forex broker. If you decide to have someone manage your funds for you, you still maintain control of your funds and your Forex account.
4. Speak to the people behind the Forex opportunity. Many Forex opportunities are completely legitimate. If an opportunity is legitimate the company will be more than willing to speak with you directly. Never invest in any Forex product without having contact with the individuals responsible for that product.
5. Does the company disclose the risks involved with trading Forex? Forex is a risky investment. If a company refuses to acknowledge that, they are misleading you. It doesn't matter whether you are considering a Forex managed account, an automated Forex trading system, Forex education, Forex trade signals, or any other Forex product. If they are offering you something to do with Forex, they MUST disclose the risks of trading Forex to you.
6. Don't let emotion get the best of you. There is something exciting about the possibility of making 200% per month guaranteed. This excitement often blinds people from reality. They want to believe SO bad that something is real that they overlook the obvious.

Forex is a legitimate investment opportunity. Thousands of Forex traders make a significant living trading the Forex market everyday. However, don't let yourself get sucked into the Forex scams that seem to be too good to be true. Because they are. Use common sense and the tips I've provided above to avoid being the next victim of a Forex scam.

Echo FX prides itself on being an experienced, honest, disciplined, and emotion-free Forex Account Manager and quality Forex Trading Education provider. For more information about the company, their Managed Forex Account Programs, or Forex Trading preparation solutions - visit http://www.echocurrency.com (Forex Managed Account) and http://www.AcademyofForex.com (Forex Education)