The entry barrier to today’s financial markets is extremely low these days. Anyone with as little as $10 can open a trading account and begin trading financial instruments like stocks, forex, and commodities. Some trading platforms also add metals and cryptocurrency to their service line-ups, which means you have access to more potential money-making opportunities.
As the market grows exponentially, it is not surprising to see bad players trying to take advantage of new investors. Forex trading scams, for example, are becoming more common as more investors enter the market. In order to have a pleasant trading experience, here are the best tips for avoiding forex trading scams.
Choose the Best Broker
Working with the best broker is the key to a successful forex trading journey. The broker you engage will determine how well trades are executed, how safe your money is, and whether you have to pay a large spread and fees for the pairs you trade.
Do some in-depth research on the broker you use. Working with a reputable broker also comes with added benefits. When you work with a regulated broker, for instance, you know that the broker is working under strict rules and standards, which means you are fully protected.
The same goes for reliability. Reputable brokers ensure that their platforms are technically operational at all times, minimising slippage and making sure that all orders are executed quickly and accurately. This combination ensures more chance of you making successful trades.
There are businesses that offer to manage your money and trade for you. If you are a retail investor – meaning you are trading with your own money – it is best to avoid having to call or text someone to execute trades. There is a simple reason for that: trading yourself is much, much easier.
With online platforms like MT4 or MT5, you only need a single click to open a position, and another click to close that position. You can perform your own analysis using indicators – you can even add custom indicators and alerts in some cases. Fundamental analysis is just as easy.
The key to avoiding scams here is taking the time to learn about forex trading basics and how to do trades properly. The more knowledgeable you are, the more difficult it is for scammers to target you and your money.
Make Your Own Decisions
That actually brings us to the third tip: make your own decisions. Relying on signals and alerts from other traders, or from those whose business is selling trading signals, isn’t something you want to do either. You may be making trades you don’t fully understand when you rely on signals.
When you make your own trading decisions, you have the ability to understand every decision you make. You are in control of your trading strategy and can take the necessary steps when you have to open, change, or close your positions.
At the very least, you will not feel emotional about profits and losses. You’ll trade like a pro, and that’s the most important part. At that point, it is impossible for you to fall for forex trading scams.