In the world of foreign exchange trading (“forex”) forex signals are suggested orders for a currency pair. This suggestion may be made by an automated forex robot or by an expert forex analyst. As the value of a forex signal is time critical they are communicated by fast methods of electronic communication such as tweet, email, RSS, SMS or websites.
Anyone who considers subscribing to a forex signal service, or who considers taking part in any kind of foreign currency trading must become aware of the risk of losses. Any financial transaction can lead to a loss, but the very high gains which can be made in forex trading can encourage unscrupulous selling to investors who do not understand the risks.
In the US the CFTC federal agency (Commodity Future Trading Commission is responsible for regulation of foreign exchange markets. The CFTC has published important advice. This warns potential investors to take particular care before participating in foreign exchange trading.
While currency trading is a legitimate and economically vital activity, a number of forms of trading have been touted to defraud the public. For example you are urged to be cautious when firms claim high profits with low risks: usually high profits are only possible if you are prepared to take high risks.
Also beware of claims that trading on margin will give high profits with low investment. When trading on margin the investor will risk losing much more than his original upfront investment. CFTC give this excellent piece of advice. Only trade on margin if you are 100% sure what it means.
Fraudsters seem to particularly like people with retirement funds to invest. If you cannot afford to lose your retirement nest-egg then steer well clear of forex trading. Money lost to fraud will not be recovered.
Be wary of transferring money on the internet. Many companies offering on-line forex trading are not located in the US and are outside CFTC jurisdiction. They may not display any identification of nationality on their website. If in doubt, do not invest.
You should be sure to get the company’s performance track records. A responsible firm will be happy to give information about past performance. Be cautious of firms and individuals who do not have this information, or who just give verbal assurances.
Network with other forex traders. Look for reviews of forex services, and ask questions about forex signal services in on-line forums.
The CFTC have a fraud page on their website. Check this out. Also check if the company or individual is registered with the CFTC or the National Futures Association.
