Many new investors do not do their research, and end up becoming the victim of a Pig Butchering / Boiler Room Scam. There are hundreds of investing scams that happen on a daily basis, and most people are totally clueless.
The scams have now reached a new level, that on September 9th 2022, Apple removed MetaTrader from the AppStore.
Here are a few things to lookout for, to be sure that your broker is a legitimate broker, and not another scam.
Your Forex Broker is a Scam if:
- They use words like “Safe & Secure” but do not have a valid license.
- After you deposit $250, they pressure you to invest $5,000.
- A broker calls you offering a “Managed Account” with steady returns.
- They tell you that their company doesn’t need a license.
- They ask you to deposit more money (a profit tax), so that you can withdraw.
How to Prevent Becoming a Victim
The first step to avoid an investment scam, is by properly researching your online broker. Ask yourself these questions.
- Does my broker have a valid license from my governments financial regulator? (FCA United Kingdom, FSCA South Africa or Australia ASIC.)
- Is the broker (salesman) always calling, and pushing me to deposit money?
- Does the brokers license protect investors from my country?
- Do they only accept deposits of Bitcoin?
The second thing is to watch out for is fake Trading Systems.
- Never use an automated trading software, before you can test out its functions.
- Do not believe any testimonials, because they are all fake and usually illegal.
- If a software or person opened your account for you, they can access to your account.
- Most Important! Historical results are never an indicator of future profits.
Look at some popular licensed brokers.
Only Trade at a Licensed Broker
There is absolutely no reason to invest with an offshore or unlicensed broker. If you think you need high leverage or high margin rates, you are mistaken, and you will lose your money fast.
You should first setup a demo trading account, at a legal regulated broker. You will see that profitable trading is very difficult, and profits are hard to make. But at least, at a licensed broker, they will not steal your money, and block your withdrawal requests.
You can find more licensed brokers, listed here.
ForTrade is a popular broker, with a great trading platform. They are licensed and regulated in many countries, including Australia, Canada and United Kingdom, read more.
Open a Free Demo Account at: ForTrade.com.
Forex trading scams are one of the oldest scams in the history of the world, and the internet has only helped the fraudsters. In recent years, due to the popularity of Crypto Currency investing, there has been a surge in complaints about bad Forex & Crypto brokers.
Make sure to properly do your research, and don’t be naïve thinking you will make $5,000 a day, by doing nothing. For every Forex or Crypto broker you find, and every trading app you hear about, there are hundreds more, which offer the identical product.
When choosing a Crypto or Forex broker, make sure you are using one that is licensed and regulated by your countries financial regulator, choose one here.