Here are some of the top scams that are related to the Forex Market
-Buying and Selling Pairs (RUP)
RUPs stands for Reversed Regularity Products. It is a tradable method to pay interest on your trades.
You buy and sell your options at the same time with the same expiration date as a regular pair. The difference is that you get paid in RUPs instead of the regular trade. For example, a typical buy order for a one-month spot bull put at $100 per contract and a sell order for a one-month spot bull call at $80 per contract are two RUPs. You sell the $100 contract for $80 and buy the $100 contract for $100. Then you will have to sell the $80 contract for $120 to collect your RUPs.
RUPs is often described by traders as “free” and is similar to fixed interest trading. However, it is not free.
How to Avoid Forex Scams
Now that you know how to avoid forex scams, it is your responsibility to protect yourself from the fraudulent people in this market. You can do this by following these steps.
1. Know that the Forex market is online
Forex is an online market so you do not need to be in a physically populated environment to make a profit. That is why you will see a lot of scam artists out there using this to lure unsuspecting investors. You can never put your money in a market that is not online. This makes the cost of Forex brokers very high so be sure you only open an account with a reliable and accredited broker. Remember that the reason why the Forex market is unregulated and open to everyone is because these are the brokers who regulate themselves.
Myths about Forex Trading
This is the reason why many people take their time to actually learn Forex trading and discover how to make money in the market. Although people have warned about the risks involved with trading in the Forex market, many people still believe that if you know the right people and are able to invest a significant amount of money, then it’s time to get started. However, what they do not know is that a Forex trader has to learn a lot of skills and rules to keep a track of his own money. In order to truly trade the right way, you need to know the rules, know how to protect your money, and have the right attitude.
That is why Forex beginners should keep the following facts in mind.
Never risk more money than you are willing to lose or you will be left with no choice but to close your account.
Know Your Risk Tolerance
Forex trading is not like stock trading, forex is a market in which the profit is determined by the difference between the buying and selling prices, so there is a significant amount of risk involved. The market may not always behave in the way that you expect and the chances of losing your money on a forex trade can happen anytime. This is why it is important that you understand the risks involved before you invest a single penny into any trading account.
Invest at the Right Time
Most people in their 20s or 30s invest in the stock market. This is a much safer way of making money because of the high return you can expect on your investments. However, stock trading comes with the trade of accepting the risk of losing the money you invest.
It’s not about the money, it’s about the returns
While it’s very tempting to become an overnight trader in this market, always remember that forex trading is a long-term business. Just make sure you read through all the fine print on the offer you receive, and make sure that they follow their promises before you invest.
What can happen to people when they invest in forex scam?
Many investors who have lost their money in the forex market in the past have shared their stories with the public and the media. Many times, people invested their money based on the promises of the forex brokers, yet never got their money back. There are cases where brokers commit fraud against their customers by using the money they got from them to cover their losses.
Forex Trading for Beginners
The Forex market is full of opportunities, and you can start off with just $100, even if it is just a few dollars. You can use these resources to get you started on your journey of becoming a Forex trader. Forex is a very competitive market where very few people are able to make a profit trading. You must start off in this market with a lower amount of capital than you would if you had chosen the stock market. When you do start with a small amount of money, make sure you trade on the safer currency, and NEVER open a margin account on your forex account.
Below is a guide you can use if you are planning on becoming a forex trader. The guide will guide you through what you should and should not do when trading.