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Avoid forex scammers with this checklist

In a nutshell: Forex trading is a legitimate financial activity – it’s the buying and selling of foreign currency. The forex market is the largest financial market in the world, which means it also attracts a vast number of scammers. Protect yourself from these chancers by recognising the red flags.

You have been admiring Mr. Forex Trader on Instagram for weeks. Every week he has a new swanky suit or a shiny vehicle. This is while you struggle to make ends meet. He makes it sound so easy. Just deposit some cash and start receiving weekly returns…

Wait! Before you press “Send”, you should know there’s one golden rule when it comes to investing: If it sounds too good to be true, it probably is. Forex trading scams are rife in South Africa. Many social media influencers guarantee fantastic returns. But are they for real?

Nolwazi explains…

What is forex trading? 

In its simplest terms, forex trading is buying or selling currency, like the US dollar, euros, and yen, to make a profit. It is a legitimate financial activity that is practised all over the world. 

The forex market is the largest financial market in the world, trading about USD6 trillion per day – that’s approximately USD50 million per second! This global market is open 24 hours a day, five days a week. It closes in New York on Friday evenings and opens on Sunday night in Tokyo.

This market where currencies are traded, is decentralised, which means there is no single entity that regulates it. Instead, it is regulated by different bodies in different regions. For example, in South Africa it is regulated by the Financial Sector Conduct Authority and in Australia by the Australian Securities and Investments Commission.

And where there’s money and loopholes, there are scammers!

Before you entrust your money to a young, sleek-looking, social media billionaire, make sure he or she is legit. Use our checklist – every YES answer to these statements is a red flag, which means stay away!