How to identify a Forex trading scam and stay clear of it?

The world isn’t exactly a fair place; scams happen in one form or another, people get cheated of their hard-earned money, and it’s only those who’re wise that are unaffected by it all. When it comes to Forex trading in India, the scenario is not any different. With daily trading volumes averaging to trillions of dollars with no accountability and no solid regulation, the chances of falling victim to a scam are high – but not to those who’re smart enough to spot it.

How it all started?

With digitalization, currency trading took on an online avatar, where buying and selling were carried out in front of computers. Early Forex trading scams stemmed from manipulation of bid/ask spreads on the computers. Instead of providing the normal spread, the spreads provided differed between brokers. The higher the spread displayed for a currency pair, the more commission brokers make, thus eating into any profits made.

Modern day scams in Forex trading:

#1) The signal seller scam

Signal sellers are usually a retail firm, a managed account company or even an individual trader. These entities promise to trade on behalf of Forex traders and make them wealthy. With fake reviews, testimonials and faulty evidence to prove their competence, most traders end up trusting them and hand over money to invest in the Forex exchange, only to find them disappear. While most signal sellers are honest and are backed by a genuine reputation, it’s wise to be wary when choosing one.

#2) Trading systems

One of the most prevalent scams is that of trading systems used to start Forex trading online. Some sellers make over-the-top claims and promise absurdly high returns that might seem too good to be true. Many fall victim and spend hundreds of rupees buying such systems, only to find that the “robots” have dumped their money down the drain. Most of these automated online trading systems aren’t submitted for review nor are the claims made supported by substantial evidence. If it’s too good to be true, it probably is – so stay clear of such trading platforms.

#3) Broker scams

Your Forex broker, the one whom you trusted with your money, could be the one slowly working against you. Several Forex traders fall into the trap of unscrupulous agencies who claim to offer trading accounts with flexible bonuses, high leverage and other benefits. A few signs that should signal you of a scam are when the broker doesn’t allow instant withdrawals or when there are persistent problems within the trading station.

Be a winner, don’t be the victim. Keep an eye out for Forex trading scams in India and you’ll be able to make your way through the FX market a lot easier. It’s always advisable to choose the right broker, that’s fully regulated and is trusted by traders. You can’t go wrong with choosing WesternFX, Asia’s award-winning Forex broker.

Why mobile trading is not the right way to trade Forex?

Technology has opened up endless possibilities in Forex trading. Think about it: you’re on a road trip and you suddenly receive news on a major economic event that could turn your trade around. You immediately pick up your phone and pull out of the trade. That’s mobile trading – and there’s an increasingly large number of Forex traders in India who’re turning to this medium to make money in the FX market. On the surface, mobile trading might seem like everything a trader needs offering convenience, ease of use, and the ability to trade from anywhere. But the reality is harshly different.

Let’s take a look at some of the reasons why trading on Forex exchange in India using your mobile devices may not be the right choice:

1) Connectivity issues

Despite massive improvement on the connectivity front by cell phone providers, your mobile devices are still susceptible to fluctuating connections that are harmful for your online trading performance. In the Forex market, even a few seconds/ minutes can spell the difference between a profit and a loss, which is why fixed-line connections are always deemed the best.

2) Susceptible to over trading

Users are constantly hooked to their mobile devices. Forex traders who choose to trade on it will have access to their trading account all the time. While it’s a great way to constantly monitor the markets, on the downside, it increases market exposure and may result in over trading. This habit can be detrimental to one’s trading performance as it’s advised to take some time off the online trading platform for better results.

3) Small screen size

The average mobile screen size ranges from 4 inches to 7 inches. Compare that with your trading account setup on desktop/laptop and you’ll know why size matters. Everything; right from the charts to other vital indicators, must shrink down onto this limited space or be eliminated entirely. These limitations may adversely impact trading on the forex trading market in India.

4) Limited platform performance

Most mobile platforms are optimized versions of the platforms that are originally written for desktops, and thus, the expected performance isn’t up to the mark. Bugs, glitches, slow-loading times or poor UX can rob the convenience of using mobile for trading and complicate matters.

5) Deviates your from your focus

It’s not that computers don’t pose a distraction, but mobile phones can multiply it times ten. You might get inbound calls, notifications or other distractions, that will sway you from your actual goal. Remember, focus is the key and if you lose that you’re bound to make mistakes that will eat into your investments.

While mobile trading offers you the convenience of Forex trading on-the-go, you need to be mentally prepared to face delays in execution, price updates and other issues that arise. For optimal performance, you need to adopt a multi-pronged approach wherein you trade using multiple platforms without restricting yourself to one. WesternFX, a leading Forex broker, offers MetaTrader 5 which can be accessed from multiple devices.