Most Forex traders are afraid of scam brokerage companies and rightly so. The world of online FX trading, in fact, abounds in fraudulent websites that cheat profitable traders of their earnings, collude with "third-party" account managers to milk unsuspecting customers, and just plainly steal people's deposits. Yes, this danger is all too real. However, in terms of the amounts of money stolen, scam brokers stay far behind another type of Forex scams - good old Ponzi schemes.
Conmen, like Emad Echadi and Michel Geurkink of IB Capital fame, attract millions of US dollars from unsuspecting investors, claiming to trade Forex, to only pay out initial investors using the proceeds from those who invested later in a classic financial pyramid hustle.
Not only people who know nothing about Forex (except for its potential to generate high income), but also many traders who understand how currency trading works and should have known better are getting lured into such Ponzi schemes.
Needless to say, huge losses suffered by investors scammed by such fraudsters could be avoided by applying proper due diligence. One should never invest into a company or person who aren't properly registered with serious regulatory authorities. Promises of exuberant gains should also serve as a telltale sign that something fishy is going on.
Yes, you shouldn't relax when analyzing your next broker — scam brokerages do exist, and so do unscrupulous signal sellers who can take you for a ride.
Nevertheless, it is useful to remember that "Forex-based" investment schemes are a far more real danger and they are usually also far costlier
No comments:
Post a Comment