Beginners Forex Education Forex Basics

Forex Bonus Types and Scam Avoidance

When choosing a Forex broker, we look at many different aspects of their services, including available account types, deposit requirements, fees, and so on. While bonuses are not enough of a reason to choose a broker on their own, traders should know that a good bonus opportunity can provide several benefits. Unfortunately, some brokers advertise opportunities that seem amazing, when the bonuses are almost impossible to earn or withdraw realistically. Within this article, we will cover the various types of Forex bonuses and how to avoid being scammed. 

Types of Forex Bonuses

Deposit Bonus

One of the most common types of bonuses available is deposit bonuses, which add a certain bonus percentage based on the amount of one’s initial deposit. The exact amount varies by the broker and usually falls in a range from 25% to 100%, although we have seen higher offers in rare cases. For example, if you deposit $100 with a 50% deposit bonus, you should have $150 available in your trading account. 

Welcome Bonus

A Welcome Bonus is something that brokers offer to attract new clients; however, terms vary by brokers. Some offer a certain bonus amount (typically around $30 or so, but sometimes higher) for a trader to open an account without requiring that they make a real deposit. This is the best scenario for beginners and may help one to see if they are truly prepared to begin investing real money. Of course, the money must be used for trading, and bonus funds cannot be withdrawn. The other scenario works like a deposit bonus, where the Welcome Bonus is awarded if the trader meets an initial deposit requirement, or fulfills a set requirement when signing up, such as selecting a certain account type. 

No Deposit Bonus

This bonus works very much like the Welcome Bonus, except the broker never asks for an initial deposit. Traders can simply open an account and start trading with the bonus they are given, without risking anything or owing to the broker if the bonus funds are lost. Once you’ve used up all of the bonus funds, the brokerage would hope that you would then decide to make a real deposit into the account, but this is optional. 

Reload or Re-deposit Bonuses

These bonuses are more beneficial to existing traders who have deposited with the broker at least once before. It works very much like a regular deposit bonus by applying a certain percentage onto the deposit. In some cases, a broker may offer a different percentage than they would with the initial deposit, which allows traders to rack up bonus funds in larger quantities. 

Special Bonuses

These bonuses fall into more of a miscellaneous category and often require certain tasks to be performed on the website before being earned. For example, one might need to trade a certain number of lots to earn the bonus. In many cases, these bonuses are reserved for certain account types and usually focus on VIP accounts or other high-tier accounts. 

Avoiding Bonus Scams 

While there are many reputable brokers out there, traders need to be aware that scammers are among them. Throwing out unrealistic sounding bonuses to lure customers in is just one of many ways that an untrustworthy brokerage may try to trick potential clientele. Here are a few tips to avoid being scammed with Forex bonuses:

  1. Always read the terms and conditions in full, both for the broker in general and for each bonus opportunity outlined on their website. Write down any conditions or alarming facts that you find for reference.
  2. Check to see if there is a limit on the number of bonuses that can be earned. If a broker offers various deposit bonuses and other options, then chances are that traders will only be allowed to claim 1-3 of them, so you will need to choose the ones that will benefit you the most. 
  3. Check to see if certain bonuses are only available to certain account holders. Many brokers reserve the best options for VIP accounts or accounts that require the largest deposits. In some cases, micro/mini/cent accounts are not allowed to take part in any special bonuses, or their participation is severely limited. On the contrary, we have seen some special bonuses that are only offered to low-tier accounts. This is something that varies widely by the broker. 
  4. Look in the terms & conditions to see what needs to be done for the bonus to be withdrawn. Many brokers will require you to trade a certain number of lots. There are always limitations on Welcome and No-Deposit Bonuses as well that keep traders from simply withdrawing those free bonus funds into their bank account. You will need to trade so many lots, make a profit from a real deposit, deal with some type of profit limitation, or deal with other restrictions before brokers release these funds. 
  5. Check to see if there are any restrictions that will wipe out the bonus. For example, many brokers will not allow the trader to make a withdrawal until the bonus has been completely earned. Other times we see limitations on what leverage can be used when trading with bonus funds. 


Traders should always figure out their potential broker’s pros and cons before opening an account, and this decision should never be made based on a bonus opportunity alone. However, good bonus options offer several benefits, such as helping a beginner ease into trading without using their own funds, by simply providing one with extra money based on the amount they deposit, and so on.  Once you have identified which types of bonuses are available with a certain broker, always be sure to read through those terms and conditions to be sure that earning and withdrawing will be within possible means. Be sure to write down any conditions or rules related to the bonuses that you will be able to earn. 

Beginners Forex Education Forex Basics

Forex Trading Is A Scam!

Forex trading is a scam! That is something that you hear thrown about the internet quite a lot. We are here to take a look to find out whether not trading and forex is actually a scam. Before we even get started, we are going to point out that the answer to this question is both yes and no, confusing maybe, but it will all begin to make sense as we go. There are so many different aspects to trading, so many different expectations from individuals and companies that it can make it pretty hard to work out, so we are going to do the working out for you, so let’s jump in and work out whether forex trading is a scam or not.

So to begin let’s take a very brief look at the history of forex trading, forex trading is simply the exchanging of one fiat currency for another and has been around for centuries. Bartering has been around since the year 6000BC, under this system, goods were exchanged for other goods. If you have looked at history, you most likely would have seen the massive ships cargo items across the sea, simply to trade what they have for something that they need, this was the first form of foreign exchange, as they sailed out to different countries and continents. In the 6th century BC, gold coins were starting to be produced which were then used as a currency due to their portability and durability, along with their limited supply. In the 1800s the gold standard was created, this meant that governments would redeem any amount of paper money for its value in gold. The foreign exchange market was backed by the gold standard during the 1900s, countries traded with each other as they were able to convert the currencies they received into gold. During the wars, this was abolished due to the needs and so the standard currency exchange resumed.

So for something that has been going for so long, it surely can’t be a scam right? In principle, no, forex is simply the exchange of currencies as we saw, so this in itself is not a scam and never can be, what could potentially cause it to be one, are the people behind it. When we talk about the people behind it, we are referring to everyone that has any part in it, this includes the brokers, investors, so-called educational gurus, and even the traders.

When it comes to retail trading you will need to go through a broker, and this is our first stop when it comes to potential scams. There are a lot of brokers out there, in fact, there are thousands of them if not more. Each one offers you the chance to trade on the financial markets with very little effort needed. Each broker offers different features, each one is run by a different company or individual (of course some are the same) and each one has a different level of trust within the trading world. A broiler is basically an entity that allows you to request a trade, they will then push that to their liquidity providers who will match the other side of the trade, the broker will then show you the value of your trade going up and down, you can then close it.

The problem comes from the brokers that are a little less trustworthy. Some brokers trade directly against their traders, so if you put in a trade, they will take the sell counterpart, it is then in their interest that you lose your trade, so they will do what they can to potentially influence the price in order to make your trade stop out, this is a tactic that used to happen a lot more in the past, it is quite rare now due to the way the brokers work and many people now go for STP or ECN accounts which do not allow this or at least make it far harder to achieve. Other brokers have been seen to manipulate prices, and others even worse, have simply outright refused to send their clients any money when they have requested to withdraw them.

Any traders would suggest that you look for a regulated broker, these are governed by bodies who are there to try and protect their clients, yet even this is not enough to completely prevent brokers from pulling little tricks on their clients. The best thing that you can do when it comes to a broker, is to look for one that has a long track record, good reviews, and one that you are able to talk to the support team of, in order to get reassurances and to know that they are still active and there to help.

The next things to look out for are the so-called experts and gurus that you find all over the internet and especially all over social media, there seems to be a lot of experts out there willing to help you make a lot of money, for a price. The first alarm bell should be coming from the fact that they are asking for money to help you make money. You need to consider the fact that if their strategy and information is so good, they should be making enough to not need to charge for it. Some will claim that they want to give back to the community or to help others become rich, but that is nonsense, if they were rich they would simply do it for free in order to get that satisfaction. If you see someone offering ridiculous results or returns, run the other way, there is no way they are real. If you want a mentor, then go for someone with a track record, with information about them available for the public, and someone that others have used, not a random person on social media promising the world. 

Have you ever realised that the majority of people shouting on the internet about something being a scam, regardless of what it is are those that have lost their money, yet they do not actually say what has happened, just that they have been scammed. This is something to look out for, many new traders who come into trading and then lose due to a lack of understanding will instantly shout scam. When you see this, look to see whether there is actually anything to their story, if it is simply a scam, then they probably just messed up and are too embarrassed to admit it. It’s good to look for scam warnings, but be sure that you take them with a pinch of salt and actually read them, many legitimate brokers and companies have the same warnings about them even though they did absolutely nothing wrong.

Those are probably the three most prevalent forms of scamming or vocalisation of scams, if you are able to avoid them then you should be on a good track, there area  few different tips to think about though in order to help avoid scams:

  • Avoid brokers that are offering guaranteed returns.
  • Avoid brokers that are offering ridiculously large deposit bonuses, you won’t ever be able to withdraw them.
  • Any opportunity that seems too good to be true, probably is, they often prey on your desires or desperation to make you pay up.
  • Ensure that you have good knowledge and education when it comes to trading and trading terms.
  • Do not send money to anyone unless you know them or have done some proper research.
  • Read the fine print for any sneaky bits that have been hidden within them.
  • Do a background check on both individuals and companies.
  • Be diligent, look after your money and look after yourself.

So we have now seen that trading and forex in itself is not a scam, the opportunity is there, you can make a lot of money, the problem comes from the people within the industry, so use our tips in order to try and avoid those scams and best of luck on your trading journey.

Forex Market

Classic Dual Line Forex Scam

What makes us vulnerable to scams and what can we do to make ourselves less vulnerable?

There’s a particular phenomenon out there amongst forex traders, one that we have all seen or even experienced ourselves but that it is worth spending a little bit of time discussing. We all have our vulnerabilities and it doesn’t even matter how long you have been trading, you still have them to some extent. Over time you might shed the ones you started out with – or at least you will probably have learned what they are and how to suppress them – but there’s a good chance you will also gain new ones along the way. Now, for the more seasoned traders among you, this will involve a little trip down memory lane. For those of you who have only been trading for a couple of years, listen up as this will be the kind of knowledge people don’t just share with you every day.

Emotional Rollercoaster

Everyone who has ever gone into forex trading has experienced one of two things at the beginning. Some have lost money right from the get-go – often they’ve everything they put in. Others have arguably had the sharper end of the stick and had some luck to begin with. That can be worse because it gives you a false sense that you know what you’re doing. It gives you the feeling that every decision you make is a stroke of genius and that you’re a natural at this. Either way, it can suck you in, in an emotional sense. Those who’ve won from the start become hooked on that euphoric feeling of getting it right – it’s a feeling like hitting the jackpot or scoring a winning goal or point. It can be very satisfying but also it can mislead you.

Those who’ve lost out most often still want to play but can no longer trust themselves to rake in the money. But that first feeling of having found the solution to a lot of your problems with forex trading – that’s a hard feeling to shake. And so we stick with it and cling on to the hope that we’re going to be able to get back in the game. That hope you feel, that against the odds you will figure this out and that you can find a system that works – that hope can be a useful thing if you don’t let it rule your decisions. It can also be a dangerous thing.

It can be dangerous because there are scammers out there who prey on that hope. Or, to be more precise, they prey on those whose hope has consumed them and turned into desperation. Scammers will do what they can to make you feel like they are your knight in shining armor, riding in to rescue you from your failures and promising big things. For people who are desperate to regain their losses, who feel like they have a mountain of learning to climb and are looking for a shortcut, that message can be irresistible.

Baltimore Stockbroker

There are a great many scams out there and many people and groups looking to run them on anyone they can identify as a potential victim. It might be instructive to take a look at how one of these scams works to get a better understanding of the mechanisms underlying this unscrupulous racket. Now, this particular scam we’re going to examine here more closely goes under several different names, the most popular of which is probably the Baltimore stockbroker but it is also sometimes known as the file drawer problem or the touting pyramid.

It is most commonly run in the sports betting world but it has migrated across to equity, forex, and other kinds of trading and investment. It is also worth bearing in mind that it has many different iterations and variations, so what we’re covering here are just the main principles.

In its most basic form, the scam starts by making outrageous claims through mass emailing or through social media. Sometimes they’re even run as ads or promoted social media content – although it is worth mentioning that most of the larger social media platforms are doing a better and better job of clamping down on these scams and reporting them to the authorities. Nonetheless, they still get through. And we’ve all seen these claims: “Turn just $1,000 into $10,000 with this amazing trading technique!”, “Earn yourself returns of 100% every month!”, “Use this unique trading technique to make 2,000 pips or more!”

Of course, these claims are outrageous and you’d have to be desperate for them to reel you in but that’s just the point. Scammers pulling the Baltimore stockbroker and other similar cons rely on your desperation. Also, it is certainly worth bearing in mind that these examples are pretty basic. Scammers have devised much more sophisticated methods to get these claims across and make them seem both more believable and more legitimate. One such technique is to use real testimonials from people who are marks in the scam but are temporarily doing well out of it. As you will see, for a time some people will be victims of the scam but will have bought into it so deeply that they will sound very genuine when recommending it to others.

Using these tactics the scammer builds up a pool of marks. Often this pool will number tens or even hundreds of people but in order to keep it simple here, let’s say the scammer’s pool is just 16 people. Firstly, the scammer will charge the marks a fixed amount per week or per month to stay in the game. And they buy into it because they have become convinced that they are onto something that will make them that fee back and then some. The scammer then tells the marks that he has some secret, inside information about some future movement of the market. For example, they say they have the lowdown on an upcoming news event and they know which way the market will move as a result. For the sake of this example, let’s say the scammer tells his sixteen marks that he has some information about some news that will affect the EUR/USD pair and he knows which way it will send the price of the dollar against the euro.

Now, here’s the key component. The scammer will use the fact that none of the marks know each other or have any contact with each other to split them into two equal groups – in this case, with eight people in each group. One group receives a prediction that the dollar will go up against the euro in response to the news event, while the other group gets the exact opposite prediction. Each group is completely convinced that they have the right prediction because they are completely unaware that there even is another group.

So when a news event does come around, one group will have made money on their trades while the other group will have lost – and they will probably have lost everything because the scammer will have advised them to leverage their accounts to the max. But, of course, the scammer doesn’t care that one group lost because they’re relying on the monthly fee from their marks.

Here’s where it gets really devious. The group that won big is still in the game. The scammer now splits them into equal halves again – in our example, this would be two groups of four but in real life, it could be much larger groups. Then it’s just a case of rinse and repeat. One group will have made money again, through sheer chance, while the other group loses big. Then the scam goes back to the beginning and is run again.

But here’s what’s interesting. There will eventually be a group of surviving marks who have been on the receiving end of the most miraculous series of predictions you’ve ever seen. At this point, they must be thinking that the scammer feeding them these predictions has a crystal ball or a sixth sense or is otherwise a member of the Illuminati. They are not only ready to pay to stay in the game but are willing to write or record the most glowing testimonials to the scammer possible. And these testimonials are additionally believable because these marks aren’t making it up – they really have been winning big on the back of seemingly impossible predictions of the market.

This not only helps the scammer to attract a new pool of marks but also means that they are likely to part with increasingly large sums of money along the way. And here’s the thing, you would be too. If you thought you were onto a good thing like this, you would be more than happy to keep reaching into your pocket to stay in, happily unaware that each prediction is no better than a random guess.

The flip side is, of course, all of those marks who weren’t in the surviving group. Most of them will certainly have dropped out when they lost the first time but, sadly, some of them will stay in despite their losses and will not only lose more on the next ‘prediction’ but will also be paying the scammer to do so.

The scam relies on a number of psychological tricks. Firstly, like almost all scams, it targets our vulnerabilities but it also relies on selection bias – where the results look amazing because the scammer is essentially only showing you the winning marks. In 2008 a British TV magician and entertainer used a variation on this scam to send a woman correct tips for five successive horse races. She was so blown away by his ability to predict the outcome of the races that he was able to persuade her to bet her whole life savings on the sixth race. Luckily for her, this was just a TV show and he simply revealed at the end that he’d tricked her and she got to keep her money. In real life, the scammer would simply have disappeared into the ether.

Protecting Yourself

You are probably reading this and thinking to yourself, “that’s all very well but it doesn’t apply to me because I would never fall for a scam like that.” Maybe that’s true but ask yourself this: before you read this, did you even know how this scam worked? And that’s not even the scary part of this, the scary part is that scammers will work hard to conceal that it’s a scam and there’s a good chance you won’t see it coming. Also, you should never underestimate the desperation you might feel if you hit a losing streak and you need a big win to get back on the horse. Or, conversely, if you smell the sweet, sweet smell of potential success just around the corner. Because those two drives will make you vulnerable to scammers and they can smell that vulnerability just as sure as you can smell a win.

But that’s not the crux of the matter. The real way to protect yourself is not to know how each and every scam works and to avoid them like the plague. First off, because nobody outside the white-collar crime department of the FBI can be expected to know all of the scams and cons out there – and even they probably struggle to keep up. And, secondly, because fraudsters will always be looking to change and adapt their scams so they can hook in as many marks as possible.

The real way to protect yourself is to maintain at all times a realistic appraisal of the situation. Trading forex is not like winning the lottery and those people who treat it like that are leaving themselves open both to scammers and a big, big disappointment down the road. There is no easy way to “win” at forex trading. There is no cheat code. Nothing gets handed to you on a silver platter. Becoming a successful forex trader takes hard work, dedication, intelligence, the ability to learn and adapt, and an ingrained understanding of oneself. This is, after all, a multi-trillion dollar market and the ranks of successful traders are brimming with the cream of the crop in terms of brains and determination. You can’t simply walk up, enter a few trades, and get your hands on the big bucks.

By keeping your expectations realistic you are not only giving yourself a shield against the allure of all kinds of scammers and tricksters, you are also setting yourself up to stay in trading long-term. It is only by staying in it, building up your experience and putting in that hard graft everybody seems so keen to avoid these days, that you can become consistently good. There are no guarantees for anything, of course, but keeping on going until you find systems and approaches that work is the only thing that gives you a chance to play the long game. And playing the long game is the only way that you will continue to improve and evolve, which is ultimately your best shot at success. Anybody who tells you otherwise is probably selling something.