Trading opens up a lot of opportunities and if you’re good at it then it can be a lucrative way to spend your time. Unfortunately, wherever there is money there are people trying to steal it and online trading opens up opportunities for them. It’s important to know how to stay safe and keep your earnings for yourself.
Basic safety
Most of what you need to do to stay safe from scammers is common sense but using that sense isn’t always easy when you’re under pressure or facing temptation. The first rule is that if anybody who you don’t know approaches you with an offer, you should always be suspicious. Be especially wary of deals that sound unusually good or any kind of arrangement which you are told could make you a lot of money for very little effort. Refuse to talk to anybody who makes you feel pressured. Bear in mind that if you do miss a good deal because you’re cautious, you will have other opportunities in future. If you lose all your money to a scammer, you might not.
Signal selling
The most common scam in the forex markets is signal selling. This involves somebody claiming to have a signal or system they can use to predict the way the markets will behave. If you give them money, they say, they will use this system to make great profits for you. Sometimes they will simply string you along, giving you little back but telling you it’s going to get better soon. Other times they will give you what looks like good profits to tempt you to invest a lot more, then steal your money. Think about it – if they really had secret knowledge wouldn’t they just use it to make money for themselves directly?
Non-existent and inflated assets
If your focus is on stocks and share rather than forex, it’s still possible to get into trouble. There are plenty of people out there selling shares in companies that don’t exist – check with the Business Registry to find out – or which they don’t really have access to. There are also people who lie about what companies are worth to inflate share values. If somebody tries to persuade you to invest in a business you can reasonably travel to, visit in person to see if its premises and activities are as they are described. Don’t invest unless you can be sure.
Bogus brokers
Your risk of being scammed is much lower if you use a professional broker. There are lots of fake ones out there, some of them doing a good job of looking like the real thing but charging ridiculously inflated fees or simply disappearing with your money once you’ve transferred it. To stay safe, stick to the well-known firms talked about in professional trade publications, as in this review of AvaTrade. Check that any firm you use is regulated by a respected agency and make sure that you’re using the real website, not one designed to look like it.
Fake funds
As well as untrustworthy brokers, there are fake management funds out there trying to suck in unwary investors. They’re particularly common in forex because it’s easy to dismiss a few days or even weeks of poor forex results as bad luck, but generally what they will do is encourage you to invest a large sum of money for your share of what is supposedly a really good deal – after which they simply disappear and are usually impossible to find. There can be advantages to investing through a fund but if you’re tempted to do so, look for one recommended in articles in professional trade publications or form your own fund with trusted friends.
What to do if you’re scammed
If you suspect that you’ve been the victim of a scammer, get in touch with your bank straight away and stop any future transactions until you can authorize them in person. The police may not be able to help you because of the uncertain status of some forms of trading in the Philippines but you can still report what has happened on online forums to warn other traders. If you have a good broker you should also report it there.
No matter how careful you are, you can still get unlucky, but the vast majority of scammers out there prey on the unwary. Keep these safety tips in mind and don’t let them put you off trading.
