How to keep your money safe?
The number of opportunities for investments has rapidly increased over the last years. And the technological progress contributed to the growth of the one market for such opportunities called Forex. A lot of Forex brokers announced that the number of new retail customers has increased significantly. But this growth was combined with the sharp growth of the foreign currency trading scams.
Very often Forex scams are advertised via mass media means. And those investors agreed to take part in it usually lose all the money they have. Let consider the following example to understand how it usually happens. Mister A became aware about the opportunity to earn money at foreign currency trading via TV. Mister T who is the owner of the Forex asset management firm promised great profits in quite short period of time and low risks of money loss. Having heard this Mister A contacted Mister T and came to the seminar arranged by the Mister T’s firm. The seminar was very interesting and seemed to persuade the Mister A to write a check to Mister T for $100,000.
A certain time later mister A get the letter from mister T saying (though lying) the company get great profits on initial investment. Mister A thus decided to visit another seminar and invest more money. For this aim mister A obtained a loan and invested $700,000 into Mister T’s company. Soon after this investment was done the Securities and Exchange Commission filed a claim against Mister T’s company saying it applies illegal schemes. Therefore the assets of the company (and the money invested by Mister A) became frozen. And the Mister A was informed that all assets of the T’s company would be shared among defrauded investors. But these assets were shared on pro-rate basis among all investors thus leaving mister A with quite less amount of money than he has invested.
The quantity of the ways of defrauding people with the help of forex trading operations is so great that several books won’t be enough to describe all of them. Therefore let’s point out the main things the investor should pay his attention to.
1. Little or no risk
In case Forex trading firm representative says that they use their own currency trading strategy implying quite low risks or no risks at all – DON”T believe him. The high profits gained at the forex are always accompanied with high risks. The currency market is quite unstable one and in case there is no proper management you will lose your capital in a few days. Therefore in case somebody says about applying original trading strategy be careful, as this person probably wants to get your money.
2. Great profits
In case individual or firm promise you great profits earned at the forex, you’d better stay away from them. These promises have the solely aim – to attract you and your money. The reason is that Forex market is very volatile and even the highly experienced traders cannot secure that they make great profits every day. Suspicion is what you need when attending any Forex related seminars.
3. Advertisements for Forex traders
Probably you have already noticed advertisements in newspapers and internet saying the Forex trading firm employs traders to teach them about the currency trading and provide them capital to trade it at the currency markets. Those who have attended such seminars were trained usually on a demo system and told by the firm stuff that they make quite positive results enabling them to start real trading at once. After this the novice trader is encouraged to use his/her own capital to trade it via the platform of this firm that holds a position of introducing broker. Thus every time trader uses the firm’s platform for trades a considerable amount of his money goes to the firm’s account. Several days, weeks or months later novice trader understands he is a bankrupt and leaves the firm that start another hunt for “new traders”.
4. CFTC or NFA membership
Try to find out as much as possible about the firm before investing your money. First of all, check the membership of the firm in US Commodity Futures Trading Commission or in the National Futures Association. Many scammers state that they are really registered in these bodies, but this is done only to lull the vigilance of the investor. So, trust only to yourself and check as much information about the company as possible before making any investments.
Internet has contributed to the growth and development of the forex market. But only clever management will help you to earn money and be successful at this risky currency market.
