The Forex market is the largest and most liquid currency market in the world. It is also one of the most popular trading venues with individual investors. In 2016, scams and fraudulent activities have been rife in this market. But with increased awareness, people are now more wary of these types of practices, which should help stop such scams. This review will illustrate how these frauds work, who they target, and what you can do to avoid them.
The Forex Market and Frauds
The Forex market is the largest, most liquid currency market in the world. It is also one of the most popular trading venues with individual investors. In 2016, scams and fraudulent activities have been rife on this market. But with increased awareness, people are now more wary of these types of practices, which should help stop such scams. This review will illustrate how these frauds work, who they target, and what you can do to avoid them.
Types of Frauds on the Forex Market
Frauds on the Forex market can come in a variety of forms. They can include:
Spoofing (where the trader makes purchases with fake buy or sell orders)
Fraudulent accounts (where the trader buys and sells in multiple accounts)
Mixed orders (where traders use the same order to buy and sell in different markets)
Order canceling (where traders cancel out or cancel their own orders)
Trading against margin (selling short positions with borrowed money by selling futures contracts at a higher price than what is needed)
These types of frauds are not just limited to people making quick cash and are often used as leverage for hedge funds, currency speculators, and other market participants. What all these types of frauds have in common is that they use temporary borrowings to move around physical assets. With borrowed money, you can take advantage of whatever price fluctuation occurs without having to worry about whether you will be able to pay back your loans when it’s time for them to be repaid.
How to Avoid Forex Scams
There are hundreds of different exchanges on the internet, and each one is a little different. These exchanges offer trading pairs that range from British pounds (GBP) to U.S. dollars (USD). As a consumer, you may be interested in the exchange’s reputation and customer service ratings. Which will help you make sure your transaction goes smoothly.
But before you buy something, you should use your critical thinking skills to make sure these things are true. Are there any hidden fees or charges? Does the exchange support its cryptocurrency? Does it have a good reputation for having an efficient and positive customer service experience? If so, then this is an excellent exchange to trade with!