Forex Signals Of Fraud And Scams
Today, the general public and professional investors alike do a large amount of their financial transactions online. This is both a great convenience and a great danger. The Commodity Futures Trading Commission (CFTC), being the governing body for the Foreign Exchange market, has seen an alarming increase in internet scams and has issued a list of Forex signals of scams to be on the lookout for.
The CFTC (Commodity Futures Trading Commission) is the regulatory body of the Forex (Foreign Exchange) market. As such, it is acutely aware of all the trends, both negative and positive, in the Forex Market. It has been actively investigating and prosecuting a number of firms that fraudulently operate online as “foreign currency traders.” However, they continue to crop up on the internet and take advantage of unwary or naive investors.
The first and foremost warning sign to look for is when you are made an unbelievably good offer. You may run across a website or even sent an unsolicited email written by an “internationally renowned Forex guru” that tells you about a guaranteed Forex investment strategy that can pay you huge, risk-free dividends. If it sounds unbelievable, that’s because it is. Don’t fall for it.
Similarly, these scammers will say things like, “Sit back and watch the money roll in while our system does all the work for you.” This is an impossibility. If you do anything at all in response to such an offer, report it to the CFTC or other regulatory body. If it’s an email, report it as spam.
The CFTC also warns that consumers should be aware of the terminology both legitimate and illegitimate companies use. The scammers typically use financial terminology that is little understood by most investors. They do this both to impress them with their purported expertise and to defraud them.
When a company boasts that they trade using the “interbank market” and will graciously do so for you, what does that mean? In fact, the interbank market is how currencies are always exchanged. If you have money in a U. S. Bank and you want to trade it for Deutschmarks, you will be trading with a German bank. That’s a small example of the “interbank market.”
Many people do not understand that when you trade on margin, you are taking a big risk, because you are liable for substantially more money than you invest. The scammers won’t point this out to you. They will only show you a graph that shows how much it is possible to make when you trade on margin.
The major point of the CFTC Forex signals of warning to investors is that you should always fully educate yourself about all investment strategies before you do anything. You should also never do business with any company online unless you know who they are.
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Filed under: Currency-Trading
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