Do you know how many people have been tricked into losing money trading currency? That’s right – millions of people worldwide. Fraudsters want to take advantage of the fact that finance is a complicated field, and it seems easy for them to track those who don’t know better.
In this article, we will learn how fraudsters work, why they like forex trading, what are the most common strategies they use, and how to avoid being scammed.
How Fraudsters Work
The easiest way to find out more about fraud is by looking at examples of it. Here are some examples:
In 2009, a scam was introduced in the United Kingdom called “Trading with the Stars”. This was an online trading game. Players had to enter personal information such as names and addresses, typically collected via a survey site, and then begin trading forex. The game promised that you could gain up to 100% profit per trade and up to 10% annual profit on top of that through bonuses. The aim was to make money by taking advantage of problems with currency exchange rates and then sending it back out into your bank account as cash profits from trading.
The Most Common Forex Trading Frauds
Before we get into the strategies and tactics used by fraudsters, let’s first take a look at what fraudsters are up to.
First of all, let’s define what “fraud” is. In short, it refers to anything that you would not want your business to be associated with. Some of the most common examples include:
• Misleading or false advertising
• Unauthorized use of trade names and trademarks
• Deceptive practices such as claims of guaranteed profits or guaranteed losses
We will go into more detail about these in the next section.
What Are the Most Common Forex Trading Frauds?
With more than 200 million forex traders, it’s no wonder that there are plenty of people who want to use the forex market to make money. Unfortunately, many of these people fail miserably.
We will cover a few common fraud schemes and tell you how to spot them.