How to Avoid Forex Trading Scams

The alleged perpetrators purportedly collected more than R30-million in capital investments under the guide of a legitimate forex trading company, but it was later found to be a scam. One notable example of a forex scam in Africa is the Bernie Madoff-style investment fraud orchestrated by Gabriel Nduka in Nigeria. In 2011, he ran an illegal Ponzi scheme which promised investors up to 40% returns monthly. Stay alert for firms offering unrealistic returns that sound impossible given the current market conditions. No legitimate trader will promise guaranteed returns above normal market averages, nor will they guarantee success regardless of economic circumstances.

  • At Bankrate we strive to help you make smarter financial decisions.
  • In trading, oversold describes a situation in which an instrument has traded at a lower price and could revert back to its correct value.
  • Metatrader 5 is an electronic trading platform offering trading on multiple assets.

The central bank is looking to increase or decrease the value of its currency against another currency. Capital expenditure or CapEx refers to the money a government spends on the development of long-term assets including building roads, railways, health or education facilities. Capital expenditure can also refer to the money spent on fixed assets or on investments that could generate profits or dividend in the future.

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A company that should serve as your trading partner may end up being your worst enemy. It is therefore vital to be able to identify them and avoid them completely. The first step to identifying a trustworthy broker is regulation with reputable agencies such as ASIC, FSCA, FSA, FFAJ and various others. Regulated brokers are mandated to operate segregated bank accounts for client funds, separate from their working capital accounts.

Can I trust a forex broker

The industry is full of scammers but some traders are still making an honest living from trading forex. In most cases, the trader can choose either weekly, monthly, or yearly subscriptions. How do inexperienced traders or those without the time to do their technical analysis manage to make trades?

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The report excludes transportation items, and a higher reading shows that the manufacturing activity has risen. Continuing jobless claims is a weekly US report released by the US Department of Labor that measures the number of US residents who have filed for unemployment benefits. This report only counts unemployed individuals who have already been receiving benefits.

Can I trust a forex broker

A bull is a trader who is optimistic about the markets and expects prices to rise. “Binary options” is a type of investing in which investors can only choose between two possibilities. They can forecast whether the price of an asset will exceed or drop below a specified amount and either receive a pre-determined amount of money or nothing at all. A bear is a trader who’s pessimistic about the markets and expects prices to drop from recent highs.

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In this industry, brokers are an integral part of the trading equation and they are a trader’s prime business partner, so a trader’s aim should be to find the best forex broker available. Choosing a suitable and reliable broker is vital, as is choosing one that will meet your individual needs as a trader. In order to make an informed decision, there are some key factors every trader should take into consideration. Mostly brokers make profits by charging you a fixed commission or fees per trade based on the volume. You could even opt for a money market account or any other liquid investment. The goal is to protect your speculative capital, not just the funds in your trading account.

Can I trust a forex broker

The broker offers a web platform, a mobile app and access to MetaTrader4 and ProRealTime platforms. Ally Invest is better known as a low-cost stock broker , but currency trading really adds some breadth to its offerings. Ally is a good choice for traders just starting out, and it offers more than 80 currency pairs and easy-to-use charting software, including a mobile app.

Internationally, major market regulators like FCA of UK, ASIC of Australia, CySEC of Cyprus – all do the same for protecting the investor interest by regulating the market. There are many facets to becoming a successful Forex trader and it’s not a one-size-fits-all business. The market moved so fast that by the time those stops were triggered, it was too late.

Can I trust a forex broker

A market strategist is a professional from the financial industry who forecasts future price movement using technical or fundamental analysis tools. Slippage refers to when a position is executed at a different price than expected. Slippage occurs when the bid/ask spread changes between the time a market order is requested and the time it is executed. In trading, risk refers to the probability and the ways in which trading actions can result into the loss of some or all of an investor’s initial capital.

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