Where stock and commodity markets are strictly regulated, the Forex market remains largely unregulated. Whilst this provides profitable trading opportunities for Forex traders, it also attracts Forex scammers that think they can get away with fraudulent activities. As in every market, there will always be individuals looking to take advantage of less experienced traders. Insufficient training can leave beginner Forex traders vulnerable. In order to avoid Forex fraud it is essential that amateur Forex traders follow the advice and assistance of more experienced traders and regulated Forex brokers with a well-established reputation for excellence.
Despite the unregulated nature of the Forex market, there are regulatory agencies that are committed to preventing Forex fraud by exposing and prosecuting scammers. One way to protect yourself when embarking on a career in Forex trading is to do your research. Find out if your Forex broker is regulated by an active regulatory agency within your country. Within the UK, the Financial Services Authority (FSA) regulates the financial services industry. By selecting a well-established Forex broker that is regulated by the FSA, Forex traders can protect themselves if any problems arise.
There are a few top tips for avoiding Forex fraud as a new trader:
Choose a Regulated Broker
Whatever country you are trading within, ensure your Forex broker is regulated by a recognized authority that prosecutes and punishes fraudulent trading behaviors.
Select an Honest Broker
Look for a Forex broker that is not in business to pull the wool over your eyes. A well-established and honest broker will often clearly mark the risks involved with Forex trading and openly publish their activities within their website.
Award Winning Brokers
New Forex traders need all the help they can get when embarking on investments within the Forex market so it makes sense to select an award winning Forex broker that has a reputation for excellence. These brokers will be well-established and are unlikely to be involved in any fraudulent activity.
Read Forex Broker Forums
Find online communities that openly discuss their experiences with different Forex brokers. Bear in mind that these forums will include both positive and negative comments about all Forex brokers even if they are reputable and regulated. Make your best judgment and test their accounts yourself to get a feel for how they work before investing any real money.