A Guide to Avoiding Forex Broker Scams
It is reported that the forex market trades an average of 6.6million in a single day. With such money flowing in and out of an industry, it is bound to have a lot of scamming platforms out there. In Nigeria, the financial is over-saturated with a lot of these brokers assuring potential clients of amazing rewards if they invest their money with them.
Every day, investors fall victim to these scams out there in Nigeria. Getting aware of these antics by these fraudulent organizations should be the watchword of people, so they can always be prepared. In this article, you will be learning ” How to know a forex brokerage is trustworthy”. This will help investors in identifying false brokers from the legit brokers out there in the financial market.
Before proceeding to identify the difference between the scam brokerage firms from the legit ones in Nigeria, it is important to learn about what a forex brokerage is, and what they do for investors in the financial market.
What is a Forex Broker?
A forex broker or brokerage is a financial services company that provides traders access to a platform for buying and selling foreign currencies. A forex broker is otherwise known as a retail forex broker or a currency trading broker.
Forex brokers are between the market and the currency traders whereby they provide the platforms for these speculators to make decisions on the movement of currencies in and out of the market.
There are many ways to spot a scam brokerage firm in Nigeria. All you need to do is look out for these red flags when searching for a broker to choose from. This list of things to look out for will help you in staying aware of these fraudulent companies popping up everywhere offering benefits out of the moon.
How to Spot a Fraudulent Forex Brokerage Firm
In Nigeria, investors are bound to fall victim to scam brokerage firms, but here are ways you can avoid them with these listed red flags. They are;
- They are not regulated by a governing body
- The promise of profits and rewards after investment
- Offering outrageous cash bonus upon opening an account
- Offering automated trades and signals
They are regulated by a regulatory body
Scam brokerage firms are not always regulated. Even if they say they are regulated, how trustworthy is the regulatory body governing them? These are things you should always look out for when trying to sign up with a forex broker in Nigeria.
The promise of profits and rewards after investment
A scam brokerage firm will always promise you everything life has to offer. This is a sure sign to abstain from a forex broker. There is always a promise of rewards after you sign up, and the promises are always attached to heavy terms and conditions. This is a red flag to look out for.
Offering outrageous cash bonus upon opening an account
Look at this! A scam broker will show you things like getting $50 after investing $300. This is fake and fraudulent. People love free things a lot in Nigeria, so it is very easy to lure people with these scams of cash bonuses. A very typical way to get people to fall prey to their cast-out nets.
Offering automated trades and signals
No company out there has found a perfect way to make money using a robot or trading bots. If there is, everyone would have gone to purchase one and kept it in their homes. So, always look out for forex brokers telling you that have signals they can send to you. They are pure scams, and it is safer to avoid such brokers.
With these guidelines being taught here, you must conduct due diligence before leaping. Carry out research by searching for reviews on each broker before settling down with anyone you have in mind. It will save you from future losses and worries.