Foreign Currency Trading: How To Spot Scams

2007-03-08 10:33:40

( Financial )



Foreign currency trading is a common practice within banks and other financial institutions. If you have received mail or phone calls urging you to trade contracts in foreign currency, be very careful as there are a lot of fraudulent scams out there. Once you have parted with your money, it would be very hard to get it back. Banks, financial firms or other organizations regulated by your trading commission usually do foreign currency trading.

There are several things you should look out for if you are considering foreign currency trading. You should beware of firms that promise large profits for minimal investments. If it sounds too good to be true, it probably is. If the firm promises large profits regardless of the movement of the market or if it also promises large profits within a short amount of time, the firm may not be regulated by your local trading commission and is probably part of a scam.

Foreign currency trading is unpredictable. Foreign currency trading is not a place to put your hard-earned money if you cannot afford to lose it. You should not believe any firm that tells you that there is minimal or even no risks if you invest your money in foreign currency trading.

You should also be careful when doing online currency trading. Identity theft is slowly becoming common over the internet and it is relatively simple to transfer funds from one account to another.

You should stay away from firms who refuse to provide their company background. If it is not present over their website, you can call their customer service hotline and request for a company brochure for background on the persons running the firm. If you are still in doubt, you can contact your local business bureau or your local trading commission for information about the company.


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