The people who make money [from forex trading] are often those who sell training programmes or offer forex trading platforms, Gradidge says.
While it’s not impossible for the average person to make money from trading forex, the odds are stacked against you, he says.
Gradidge says he has seen scams offering a guarantee to double your money in 30 days. He says if such returns were possible and you could invest R100,000, and re-invest it and the returns every month, your investment would grow to R3.6-billion after two years and R1.7-trillion in under four years.
Such guarantees are meaningless and aimed at getting you to part with your money. “You are the source of their ‘return’,” he says.
Faizan Anees, the co-founder of broker ThinkMarkets.com South Africa, says consumers need to be careful not to be lured by the marketing tricks used by people posing as forex traders.
As an investor, you should ask yourself why some stranger would want to make you ultra-rich, he says. Successful forex traders are unlikely to share their hard-earned tips and tricks with Joe Public.
To protect yourself from being scammed, he says you can check that the broker or bank they’re trading with is reputable, whether the company is regulated and how long it has been in business, and you can ask to see trading statements.
Ask to see signed and certified statements from the broker and check if the broker is regulated.
Anees says you should be careful of people who try to put you under pressure. “If the opportunity will expire and never return, beware!”
He advises that you begin by investing only a small amount. “A trader that has a profitable strategy can perform with small and large funds, so there should not be any rush to invest everything. Plus, only commit money that you can afford to lose.”