As one of the largest financial markets in the world, in the foreign exchange market, there are often investors who suffer from fraud due to asymmetric information. This time, we introduce the most common scams in the foreign exchange market, and through this article, we hope that you can keep your eyes open before choosing an investment platform, and kill the illegal platform at the early stage of investment.
At present, the most common and the most direct scam is probably the creation of fake or copycat black platforms. In other words, it is a market model in which the broker acts as a counterparty, providing a trading platform, i.e. the trades that the trader makes do not actually enter the forex market, but rather bets within the platform.
Most of the traders in the forex market tend to lose money due to the casual way they trade, lack of discipline and risk awareness. Only a very small number of traders can achieve reasonable returns through learning and self-discipline. This is because the forex market follows the "8020 rule", that is, 20% of the traders get 80% of the returns, while 80% of the traders only share the remaining 20% of the profits.
Some criminals see a business opportunity, why not open a platform market maker? That way, we're guaranteed to break even. Because of this, many illegal platforms set up by individuals flood the market.
1. No regulation
2. Using pirated software
3. Identify the platform by looking at how long it has existed
4, carefully browse the company's official website
5. Intuition
6. Demo account
1. No regulation
Some unscrupulous brokers will use a variety of means to defraud clients of their money, including gambling against illegal platforms, using pirated software and manipulating exchange rates.
So, in order to avoid falling victim to scams, it is crucial to choose a highly regulated and trusted Forex broker. This ensures that your funds are protected and transactions can be done fairly and transparently.
2. Using pirated software
One of the most popular platforms in the forex market today is MT4/5. Due to the high price of legitimate software, some black platforms in order to reduce costs, often use pirated MT4/5 software, and rent cheap servers.
Under normal circumstances, regular forex brokers have strong financial strength, and for the purpose of maintaining business reputation, will not use pirated software. So we can come to a simple conclusion: platforms that use pirated MT4/5 are 99.99% illegal!
3. Identify the platform by looking at how long it has existed
As a black foreign exchange trading platform, in general, it will not exist for a long time, because the nature of the platform itself is false, so through the existence of the platform time, investors can judge whether the platform is formal. I have an experience here, that is, the platform that has existed for more than 5 years is basically formal, and the illegal platform is usually impossible to exist for five years.
4, carefully browse the company's official website
To be honest, this is very important, the official website of a legitimate foreign exchange company often tells investors all the information related to investment, including trading risks, regulatory information, trading products, company profiles, etc., and at a glance, you will know whether the company is doing it with your heart. On the contrary, some companies' official websites, at a glance, are a copycat website, with rough pages, mismatched colors, and a lack of key investment information.
5. Intuition
There are certainly a lot of "bad people" in the forex industry. They have no professional ethics, even treat the law as a blank sheet of paper, and always look innocent until they are exposed. You should assume that everyone is sinister until you are sure that they are honest and honest. That's the market!
6. Demo account
A Forex demo account is the most basic tool to test a broker. Some mechanical systems make very good demonstrations. But what actually happens? You have to do it yourself. Some installation procedures, quotation update speed and spread, etc., may determine whether the dealer has a certain problem. You can apply for a demo account with the company of interest to get a feel for the trading process and execution speed.
Therefore, before you carry out foreign exchange trading, it is necessary to carefully check the trading platform and obtain detailed information about the platform, so that you can better avoid black platforms and foreign exchange fraud. If you do not know whether the platform you use is formal, you can also inquire about foreign exchange, or add Tianye customer service for consultation.
