Forex Investment is a risky business

Is there a safe Forex Investment?

Forex scams are becoming frequent. The lack of clear rules and precedents creates huge risks for the unprepared people who think it is easy to earn in the forex market.

Forex trading is transacted on margins, which means high-profit potential but nonetheless it is risky.
Funds in an account are less than the amounts that are controlled. It’s worth noting that currency exchange rates on an average day are not large but can be small. However, trading on margin is risky.

Forex investment scams are often pulled off by a team of people who set up a makeshift office, called a “boiler room”.To convince people that the forex company is real, they might send you to the company’s website, which looks very professional.
They might also set up a toll-free number and a respectable address to make the company seem legitimate.

However, the company doesn’t exist. Everything on the website is fake, and the office is just a post office box or temporary office. By the time you realize you have lost your money, the scammer will have closed up shop and moved on to another scam.

There are some aspects it is better to examine to make sure your forex investment could be safe: Real phisical addressRegistration statusReputation, and Funding.

They must have a real physical address and real phone support.
The first thing to look at on a broker website is their contact information. I look for their address.
We need to have a look at their premises to make sure the address is real. Most likely it will be real if they are a properly regulated broker.
If the address of your forex broker is in a major country with well-developed financial regulation, this legal infrastructure can often help you recover your funds if problems arise.
Make sure to double-check the address of the company even if the address looks safe. Sending your money to an online forex broker based in less well-regulated places like the Bahamas or Seychelles and Mauritius may not be in your best interests. Trying to sue a forex broker in a foreign jurisdiction can be a daunting task, especially if there is no regulatory oversight in the background to support your legal action.

Phone support is crucial too. Stay away from brokers who only offer call-back phone support, meaning you type in an online message, and someone will call you back when they are ready. Proper forex brokers do not work like that. You should have direct phone support whenever the markets are open.

Registration Status and Disciplinary History

The security signal to check is whether the broker is regulated or not.

A serious participant in the market will be regulated by at least one authority. The American NFA is the toughest authority.
A stamp from the NFA, FSA, CFTC or another reputed institute in a normal country doesn’t mean that the company is bona fide, but it’s better than nothing.
Companies listed in some exotic island like Seychelles, Mauritius or Anguilla and Panama look suspicious.


The point to check out is also the broker’s reputation. Be sure to check the Internet for either favorable testimonials or continuing complaints about the brokers you have chosen for consideration.
Especially look for reviews and comments where traders have had difficulties in withdrawing their funds. If you see evidence of this, do not waste any more time on this forex broker.
Visit a few websites just to make sure people are not experiencing recent problems withdrawing funds from the broker or having other difficulties.
Fake positive and negative for broker reviews are commonplace unfortunately, but if you find a huge number of posts complaining about difficulty withdrawing funds from a broker that usually grabs your attention.


The last point when it comes to choosing a trusted broker involves the financial security of the broker.
Your forex investment will always be more secure in the hands of a forex broker with great financial backing.
The forex broker should be well funded, or have a trusted owner or parent company.
These supporting relationships are often disclosed on the broker’s official web site on tabs like “About Us” or “Press Releases”.
Although all the top forex brokers represented here should be well funded, it is always a good idea to make sure one extra time. You may also want to visit the website for the regulatory body in the region.
Regulators often publish annual statistics on the capital funding for their licensees and whether they are adequate or not.

A Forex Broker should have strong governance arrangements that ensure all FX settlement related risks are properly identified, measured, monitored and controlled on a firm wide basis.
It should have also a comprehensive risk management framework to manage FX settlement-related risks commensurate with the size, nature, complexity and risk profile of its FX activities.

Safety and soundness are key factors when dealing with a broker.

Boccadutri has a team of specialist forex scam lawyers whose collective experience covers some of the most ground-breaking and eye-catching cases and our forex lawyers are ideally placed to handle claims arising out of the regulatory investigations in relation to your forex investment.

If you suffered losses as the result of a forex investment in which you believe your forex broker has scammed you, you need the assistance of a forex scam lawyer.

Contact us here now for a free no obligation discussion and quote.

Calogero Boccadutri
Calogero Boccadutri
Managing Partner

Calogero Boccadutri is the Managing Partner of Boccadutri International Law Firm. He has trial experience in Forex, Personal Injury and Administrative litigation.


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One Comment

  1. c6201118fc5a520542b78468efe72581?s=54&d=blank&r=g
    Rita 20 June 2016 at 6:52 - Reply

    Unvlliebabee how well-written and informative this was.

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