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Trading scams that you need to be aware of!

Watch out for the growing number of scams around trading, mainly binary options, forex, and cryptocurrency.

A scammer trying to scam a victim through the phone.

Binary options, forex, and cryptocurrency are growing in popularity of late. They are all legitimate ways of earning money by investing. Since it is a relatively new concept, many people aren't completely knowledgeable about it. Scammers are using this as an opportunity.

Before making any investments using your hard-earned money, it is important to conduct research. Lack of research makes it easy for you to fall prey to these scammers. Here are some examples of how these trading scams work -

  • Some trading platforms ask you to prepare a dummy account and trade. The dummy account is designed in a way for you to start seeing profits right away which boosts your confidence. You then create an actual account and invest your money, only to realize that you are making losses.

  • Other platforms may ask you to pay taxes on your profits or prevent you from withdrawing profits. They will encourage you to keep investing, following which you lose all of it.

  • There are scams that promise you about robots doing all the work for you. You earn money while you sleep, with robots doing all the investing for you. Unfortunately, these robotic systems are designed to mint money out of you.

  • MLM's exist in the forex scene as well. They ask members to pay a monthly fee in exchange for daily trade signals and forex educational materials. Members are then incentivized to recruit more people by receiving commissions.

  • You may also come across forex funds that promise abnormally large guaranteed returns on your initial investment.

  • Fraudulent cryptocurrency investment websites and apps have already conned millions of dollars from users within a few months.

A scammer working on several types of online scams.

How to avoid these scams?

  1. The first step is to educate yourself. Do your research. Read reviews on Google about the platform before deciding to invest your money in it. Most likely, there are communities and forums already existing where people share their experiences.

  2. Promises of guaranteed huge returns are most likely a scam. An important thing to remember is that risk and return go hand in hand. Low-risk investments are safe but they yield low guaranteed returns. High-risk investments have a possibility of yielding high returns but they are never guaranteed.

  3. Ask for background information and full disclosure of profits and losses of the platform before investing in it. If they hesitate in providing this information or are only showing you half the picture, avoid investing in it.

  4. Unsolicited and persistent marketing is a sign of fraudulent behavior. They pop into your emails and messages repeatedly because they are incentivized to get your money.

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