How Do I Know If the Forex Program I’m Looking At Is A Scam?
Written by Vincenzo Desroches of Forex Traders
The unregulated nature of the Foreign-Exchange (FX) Market has made it a big draw for con artists and scammers. The internet is littered with outrageous claims that one can be a millionaire by trading the FX Market with a simple investment of $99. The reason con artists are able to operate is because, unfortunately, people fall for their scams. In this short article, we will identify several of the major red flags that are often present in the sales materials of bad products.
Guaranteeing a return is an infraction of the National Futures Association (NFA). Unfortunately, because the FX Market is an international market with no central exchange, much of it is unregulated. A regulated company will never make the claim of guaranteed returns. In fact, no legitimate trading professional will ever promise a return. All true professionals understand it is impossible to predict future market movements. The best traders have down times. That is reality. Any claim to the contrary should be treated as a possible red flag of fraud.
Promise of High Yield
Many forex scams promise crazy returns of 20% and up per month. The fact is, once again, no one can truly promise a return in financial markets. To get an idea of how professionals perform each year, if a fund produces over 20%-30% in a year, it has done incredibly well. Of course, they are trading such large amounts of money, it makes it difficult to get the returns a smaller account can get, but still, the idea that you can buy a program that will return 1,000% in a year is a pipedream. Don’t be fooled by the promise of high returns.
No Real Disclosure of Possible Loss
This is huge. A financial scam will generally never disclose the possibility of the loss of funds. If you are looking at an investment opportunity that does not communicate this to you, you should be very skeptical. A true investment manager selling a financial product will always be very up-front about the possibility of loss.
Cheap Sales Language
- Earn $1,000’s per week working from home!!!!
- No more 9-5!!!!!
- Spend 10 Minutes per week!!!!
- Make Unbelievable Profits Day-In and Day-Out!!!!!!!!!!
This type of cheap sales language will oftentimes accompany forex and financial scams. Making money in financial markets takes the same type of diligence and hard work as it takes to profit in any other professional field. Any marketing pitches that say otherwise should be avoided.
Check for Customer Testimonials
This is a great way to determine whether a financial product is legit. Google the financial product and find out if there are any threads or website discussions on the pros and cons of the course material or product you are researching. Many legitimate forex courses generally have an entire community of satisfied customers who communicate via a website, thread, or forex news site. If you cannot find satisfied customers of the product you are seeking to purchase, there may very well be a reason.