Warning Signs of Forex Trading Fraud

By Lynn A. Granata

There have been substantial risks associated with forex trading schemes in recent years. Don't become the next vulnerable victim of a forex trading scam. You can be on the lookout for the following red flags if there is a firm out there who is trying to convince you to buy from a foreign exchange firm, by remembering a couple of life saving tips to prevent it in the first place. Never place any money that you can't afford to lose,such as your nest egg or retirement savings into any of these foreign currency trading scams.

Here are some fraudulent sales pitches to be aware of:

• Lead you to believe you can profit from current news already known to the public.

• Made through word of mouth referrals or emails from friends and relatives, members of community organizations, churches, or social groups.

• Contacts you asking for personal information such as your name, phone number, and email and home addresses.

• Promising that with Forex there is no “down-turning market”.

Lookout for these other common telltale persuasion tactics they may deploy;

• Dangling the prospect of wealth and enticing you with something you want, but can't have.

• "This Euro/dollar deal is guaranteed to rise double what your current investments are doing."

• Trying to build credibility by claiming to be with a reputable firm or to have a special credential or experience.

• "Believe me, as a 10-year senior vice president at this firm, I would never sell something that doesn't produce."

• Leading you to believe that other savvy people have already invested.

• "This is how Bob down the street from you got his start. I know it's a lot of money, but I'm in—and so is half our club. It's worth every dime."

• Offering to do a small favor for you in return for a big favor.

• "I'll give you a break on my normal Forex commission if you buy now—half off."

• Creating a false sense of urgency by claiming limited supply.

• "There are only two units left and the Asian market is about to open, so I'd sign up today.”

Red Flag Warnings to watch out for;

• Promises that with Forex, there is no “bear” market

• Firms that claim you can or should trade in the interbank market

• Requests to send or transfer cash quickly via the Internet, by mail, or otherwise

• Difficulty getting background information about the person and/or company

Ask more questions such as;

• Contact the CFTC to check the company’s registration status, business background, and disciplinary history
• Ask about the details of the Forex trading market and your obligations if you participate
• Ask about the firm and the individual’s performance record on behalf of other clients
• Ask anyone not willing to comply why they are being hesitant to do so
• Ask for all information in writing. Do not rely on oral promises or statements
• Check all information you receive to ensure that the company is and does what it says it does
• Ask for a written risk disclosure statement
• Ask for the advice of an independent and licensed financial advisor or consultant whom you trust

If you go to a financial advisor ask;

• How are you qualified to provide me this service?
• How does this product meet my financial needs?
• How are you paid for your service?

If you wish to get involved in forex trading at all be certain that you;

• Do not deposit more funds than you can afford to lose.
• Do not mortgage your home or cash in your savings.
• Do not trade on margin unless you understand it. Margin trading can make you responsible for losses that greatly exceed the dollar amount you deposited.

If you have questions, are aware of suspicious activities, or believe you have been defrauded, please contact the CFTC quickly. Call the CFTC at 866.366.2382 or file a tip or complaint.

Reference

Retrieved from;

http://www.cftc.gov/ConsumerProtection/FraudAwarenessPrevention/CFTCFraudAdvisories/fraudadv_forex

How Does Forex Trading Work?

By Lynn A. Granata

Currency Pair: We wouldn't have a Forex market if we weren't able to compare the value of one currency against the value of another currency. It is this comparison that drives prices. Forex contracts are always quoted in pairs. The Euro vs. the U.S. dollar (EUR/USD) is the most heavily traded currency pair.  

Here I have decided to upload a video to my blog, that lets you see firsthand of what forex trading really is.

This isn't intended to cover the rights and wrongs about forex trading, instead it only covers primarily what it is.  Thus it's not intended to promote the topic of forex trading in any negative point of view, nor is it designed to criticize forex trading, its sole purpose is to explain what forex trading is and how it works.  There will be more topics about forex trading by me, in the near future which will discuss the pros and cons of forex trading, and how financial crimes and scams are abused through the use of forex trading products.

So, Happy Viewing....

Reference

youtube.com/forextrading