A foreign exchange Sydney scam can be described as a specific plan to defraud a person by convincing them that a trading technique or system will bring them huge profits. If you are ever contacted by a person or company who offers you a trading technique or trading system that will consistently bring you profits, with little or no possibility of loss, you should ignore them.
The New York Times and The US Commodity Futures Trading Commission issued many warnings to traders about these sorts of scams during 2008. The Wall Street Journal quotes that unsuspecting victims of these fraudulent schemes suffered huge losses above $15,000 each. This is an alarming figure and investors in the foreign exchange trading market should be extremely careful. The belief is that the lack of a suitable exchange and regulating bodies in this market is what lays it bare to swindlers.
Foreign Exchange Sydney Scam Types
A very popular scam is when brokers promise traders that they will yield high profits only if they make a huge initial lump sum investment. Another popular scam is where broker firms use your funds quite quickly to make trades in order for them to earn money.
Another scam that is typical of brokers is to offer you trading software with the promise that you do not have to do anything to make massive profits. The forex market is volatile and it is only natural that you will make profits, but you will also make losses. If someone promises you that with their system or method you will only make profit, they are lying to you. When you use genuine trading and robot software, you will receive an indication of the potential loss factor should the market move up or down. This percentage which is attributed to the uncertainty of the market can be as high as 10%. You should not deal with anyone who promises you 100% profits.
Brokers may try to swindle you by adjusting their commission or spread structure. They will increase the number of trades on your behalf which allows them to make more money. This is one of the reasons why you should be careful when you make a choice of forex broker. You need to find a broker who has an untainted reputation with no scary stories attached. Take the time to check on the past trades your broker has undertaken and try to locate genuine reviews by real people, not sites where the broker has posted good reviews about his own firm.
As soon as you experience problems when you try to withdraw funds, you should hear alarm bells. Ensure that you can easily enter and exit trades during sudden swings and times when there is a crisis looming. You must have confidence in the liquidity of the trade station you are dealing with. As soon as you feel uncomfortable about any aspect of your forex broker’s actions, you should move on. When you make a final choice about a broker or a trading system and you are being offered too many unrealistic ideas and promises, you should be wary.
Keep up to date about new scams that come into the market. You can find out about them on reliable forex trading forums. Money making ventures always attract scam artists.