Trading on open markets is a risky business. The prices of equities can vary. Currencies can go up and down. And most people find it difficult to compete with the high-frequency trading algorithms employed on most exchanges.
And on top of this, there are the scammers. As in almost all walks of life, trading scammers are becoming more and more sophisticated. They’re getting better at phishing for people’s data. They’re getting better at building a sense of trust with their victims. And they’re getting better at making their so-called products look genuine.
This means that it is imperative you have your wits about you when choosing to use any financial product or service.
Too Good To Be True
The Commodity Future Trading Commission, which regulates the Forex market, says that if it seems to good to be true, it probably is. Making money is hard, in particular on the stock exchange. So if you see a company advertising a product that can make you $350 an hour while you sleep, don’t take it seriously.
Remember, if those types of profits were available to people while they slept, everybody would have piled in long ago. Profits would have dropped as more people competed for fewer dollars. And the opportunity would have been competed away.
Binary options trading scams are a common example of this. Though most binary options trading software is legitimate, some make promises that they can’t fulfill. Avoid these companies like the plague.
Avoid Companies That Guarantee A Return
No company in the world can guarantee you a return on your money. This is fundamentally dishonest. If a company were able to predict the future, they wouldn’t have to spam people on the internet with dodgy products. They’d just have to invest diligently and make a killing.
If a company promises to make you a 50 percent return in three months, dump the company and dump the product. It’s a scam to lure you in and get at your money.
Don’t Be Fooled By Targeted Advertising
In order to become a victim of a scammer, you have to trust them with your money. Scammers know this and do all they can to build a confidence and rapport.
One way that they have been doing this recently is by explicitly advertising to ethnic minorities. Many minority Russian, Indian and Chinese investors get fooled each year because they trust the advert.
But they shouldn’t. These targeted ads are a way to cash in on the fact that people are more likely to trust people from their communities.
The Company Has No Provenance
If you find a financial product on a glistening website that you’re interested in, try to find out a bit more about the company behind it.
How long have they been trading for example? What other products do they offer? Where are they based? Is there a real person you can talk to? Does that person have any idea what they’re talking about? Do they have other customers? If you don’t get adequate answers to these questions, break off the relationship immediately.
Category: Wealth Building