Just like in every other part of the world, forex trading is gaining more and more popularity in South Africa as new people discover it. The reasons behind its popularity are simple—you can earn money from anywhere in the world, as long as you have the necessary knowledge and skill to do so. Another reason why it’s so attractive is that there’s no limit on the money you could earn - you aren’t limited by time, and you don’t have to do any active work to get a profit.
However, with the rise of its popularity, scammers and fraudsters have found ways to exploit forex traders—especially beginner and intermediate ones. Traders from South Africa have also been a target of such scams, so it’s expected that they’d like to protect themselves in the future. If you want to learn more about the history of forex scams in South Africa and how to protect yourself from them, continue reading.
Common Forex Scams in South Africa
Expert Advisor (EA) and Robot Scams
The benefits of automated tools like trading algorithms and robots are apparent, but this has also given scammers an incentive to exploit them. An EA scammer would advertise the “obvious” benefits of using a trading robot and give you an estimate of how much money you could earn.
Trading Signal Scams
Providers of trading signals give out suggestions and ideas to forex traders, helping them take advantage of the market circumstances. Although there are plenty of legitimate signal providers, there are more scammers that “guarantee” an accuracy of over 90% of their signals. The truth is that no one, not even the best traders of all time can guarantee such high returns consistently. Be on the lookout for fake forex traders South Africa.
Price Manipulation
This is a scam usually done by illegitimate brokers that go out of their way to display an inaccurate price for a forex pair, stealing the difference between prices as profit. Avoiding these types of scams is really simple—just stick to the best forex brokers in SA today that have years of history behind them.
What Can You Research to Avoid Forex Scams?
Researching before taking big steps in the forex market can save you hundreds, if not thousands of dollars in the long run. The first step in the right direction starts with a good broker. If you stick to reliable brokerages and forex platforms that have been around for a decade or more, there is no way you could get scammed.
You should also take preventive measures to avoid being scammed by individual scammers, not just illegitimate brokerages. A simple rule to keep in mind is the following: “If something sounds too good to be true, it probably is”. Scammers will go out of their way to promote new “brilliant strategies”, promising you massive returns—only with the goal to steal your money and disappear without a trace.
Are All Brokers Regulated?
You’d be surprised by the number of brokers that are unregulated, essentially being unsafe. It goes without mentioning that you should stick to safe brokerages, like the ones on our list of the best forex brokers in SA. Consider avoiding the following brokerages to stay safe and scam-free:
- UFX Market
- Tradorax
- Trade-24
- NoaFX
- MaxCFD
- Porter Finance
- Prime24Trade
- Option FM
Services That Legitimate Brokers Allow With Ease
With the large number of brokers you can register at right now, it can be quite easy to fall into a trap and start trading at an illegitimate one—especially if you’re a beginner. Experienced traders, however, know what to look for when choosing a broker, which is not always true for the untrained eye. So, what should you look for? It’s simple—make sure your broker has the following features before registering there:
- Fast and seamless banking (both deposits and withdrawals).
- A range of reliable payment methods that you have used in the past and are familiar with.
- Licenses from multiple licensing bodies.
- A safety system that minimizes the chances of you getting scammed.
What Can You Do if You Have Fallen for a Brokerage Scam?
Although taking preventive measures is a lot better whenever scams are in question, sometimes it’s too late and beginners become victims of online wealth market scam attacks. The moment you suspect something is wrong, you need to immediately withdraw your cash and contact authorities. Every broker must have a licensing body behind them, so starting from there & contacting the higher-ups is a good idea. In fact, this is the easiest way to track down someone who scammed you in South Africa.
After you’ve reported the scam, make sure you specify everything in as much detail as possible. Although it’s usually not the case, there is a chance you could get your money back and press charges against the scammer. In the worst case, you’ll minimize the chances that others become victims of the scammer, and in the best case, you might succeed in getting money back after being scammed.
Need help with your forex trading journey? Consider checking out our free forex signals or weekly forex forecast.