The proverb always says “losses are lessons”, but this sentence does not apply to the problem of choosing a platform in the foreign exchange industry. Once the foreign exchange trader has chosen the wrong foreign broker, his funds could be gone for good, forever.
When you see someone promoting forex trading as a low-risk, high-return, guaranteed profits investment plan with a professional money manager who can help you grow your money, it is highly probable that this is an illegal fundraising scheme. This is more evident when this forex broker prompts you to bring in more participants to deposit money with them in exchange for an additional commission.
An ordinary forex broker makes profits from commission per trade or a spread through the execution of buy or sell orders. Therefore, if a forex broker is focusing on recruiting agents and more participants, it could be that it is an illegal fundraising scheme.
Other clues that you can utilize to determine if a forex broker could be an illegal fundraising scheme:
(1) The forex broker or its customer service representative tells you to transfer your funds into a separate individuals private account outside of its broker website.
(2) The forex broker or its money manager tells you to pay a monthly fee for exclusive services.
(3) The forex broker tells you that they have a “secret weapon” that can generate guaranteed profits for you.
(4) The forex broker offers you too-good-to-be-true promotional packages, such as a deposit of $100 to get $3,000 in return.
It is a general consensus that forex brokers commonly operate on the over-the-counter market. This decentralized market does not have a physical location like a traditional bank, and it is not subject to regular regulations like the securities market. Therefore, it is crucial to be extra careful of your counterparty (i.e., forex broker that you choose to entrust).
Be vigilant in choosing a reliable forex broker by downloading the free WikiFX mobile app, or logging on to www.wikifx.com.
WikiFX is a global forex broker query platform that holds a large verified database of over 36,000 forex brokers.
It is recommended to pick a forex broker that is regulated by a recognized authority body, operates with valid licenses, has a legitimate business premise, as well as obtains a WikiFX score of at least 7 and above.