Online Trading Scams

Online trading scams has become of age in recent times and it is not hard to see the reason why this is so; while traditionally a trader had to place orders with their brokers by way of a phone call, who would then feed the request into their systems manually for linkage with trading floors and stock exchanges, the advent of the internet has made things a whole lot easier.

Investors can now make real time orders online and even trade with other traders directly. Online brokers also charge relatively lower fees to their clients compared to offline brokers and this has made online trading a particularly attractive option for newbie traders.

Unfortunately, online scams have grown at a staggering pace. The naïve, inexperienced traders are often gullible and scam rtists often target them to swindle their money away.

For that reason, it is advisable to exercise prudence while choosing your online trading platforms and brokers. No matter how legitimate and appealing an online trading ad is, you should take the time to look around for reviews of the same.

Many unsuspecting individuals

You will specifically want to verify that the broker is licensed within the state of province in which their jurisdiction falls. That way you will be able to avoid online trading scams that many unsuspecting individuals become victims of.

Among the most common online trading scams are ponzi schemes whereby capital injected by new traders is used to pay “yesterday’s” investors. And when the line of new investors fade away, the company pulls out and runs away with the investors’ cash remaining in their coffers. If you see an investing company offering you a guaranteed return on your capital, be especially cautious before engaging with them as high chances are that you will end up losing your cash.

There are also a number of online scams that out-rightly defraud unsuspecting investors of their hard earned dollars. Such companies promise the investors thousands of dollars in a short span of time, typically a few weeks or months, with an initial investment of a few thousand dollars, say $5,000. In essence however, the money is not invested in any online trading scheme but is swindled away.

There is also an increasing number of magic forex trading software retailing online that supposedly provide you with information on the moves to make at a given time.

forex scams

Be particularly skeptical

Most of them if not all don’t deliver on their promises and in any case, you should be particularly skeptical of automated online forex trading software products.

There are also online trading scams that take the shape of false advertising and for that reason the importance of looking for online opinions and reviews about any online trading platform or opportunity before engaging in it cannot be overemphasized.

Lastly, you should always remember that online trading is risky as with any offline investment scheme. You should thus only invest in money that you can afford to lose without offsetting your financial situation.

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