Tag: Trading Scams

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Beginners Forex Education Forex Basics

Guide to Identifying and Avoiding Dangerous Forex Scams

The Forex market is filled with competitors, and more brokerages pop up every single day. With so many options out there, comparing choices can be difficult or even overwhelming. Novice traders may not be apt at spotting scams, since many of these brokerages have nice websites and seem legitimate to the untrained eye. Unfortunately, there […]

The Forex market is filled with competitors, and more brokerages pop up every single day. With so many options out there, comparing choices can be difficult or even overwhelming. Novice traders may not be apt at spotting scams, since many of these brokerages have nice websites and seem legitimate to the untrained eye. Unfortunately, there […]

The Forex market is filled with competitors, and more brokerages pop up every single day. With so many options out there, comparing choices can be difficult or even overwhelming. Novice traders may not be apt at spotting scams, since many of these brokerages have nice websites and seem legitimate to the untrained eye. Unfortunately, there are a lot of scammers out there, and opening a trading account with one of them is one of the worst financial mistakes you could make.

Don’t let us scare you – good brokers are out there; you simply need to be able to identify the difference. Below, we will provide some tips that can help our readers know what to avoid when searching for a broker. 

-Transparency: A good broker offers a transparent website. Details about their account types, funding methods and fees, leverage options, and minimum deposit requirements should be clearly explained. If you’re left with more questions than answers, look for a broker that provides this information upfront. After all, this is need-to-know information!

-Check to see if the broker is regulated. This should be clearly indicated towards the bottom of the website, but you could also check the broker’s “About Us” page. Regulation is a good sign that the company is legit, although US-based residents may need to lower their standards because many regulated brokerages cannot offer service to these clients. 

-Remember that it is impossible for any brokerage to promise they will make you rich. There is no way for them to know that you will make profits, so any such claims are a bad sign. 

-Searching for background information about the company is a great way to see if things are legitimate. User reviews can also give insight into any hidden issues. Reviews might detail issues where brokerages won’t release funds to multiple clients, or other problems you wouldn’t otherwise know of.  

-Be sure to check the funding page for withdrawal rules. Some brokerages impose ridiculous rules and minimums that make it difficult for traders to withdraw their profits. 

-Check out the customer service options offered by the broker. Now, bigger brokerages can generally afford to employ LiveChat agents where smaller companies can’t, but listed contact methods and an address are all good signs.

-Use common sense: if something seems too good to be true, it probably is. Forex trading is risky no matter what, and brokerages need to make a profit. 

-Always check to see what type of spreads are being offered by the broker. On the benchmark pair EURUSD, spreads should be around 1.5 pips or less. We wrote about the importance of transparency earlier – never open an account with a broker that isn’t upfront about their spreads.

Forex Robot Scams

Although Forex robots are different than brokerage-based scams, they can still cause a lot of damage. Before purchasing a robot, do some research about the company or individual that is selling the product. Avoid any claims that the product is guaranteed to make you rich. Instead, look for good backtest results and tips from the author. Many providers will allow users to rent such a product before paying full price, or to at least test it on a demo account.

If you’re ever unsure, then reading user reviews and testing are the best methods of finding out the truth. Know that many of these products aren’t profitable and companies may present one backtest out of hundreds to trick traders into thinking their robot is more profitable than it really is. 

Categories
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 […]

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 […]

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.

Categories
Forex Basics

Different Forms of Forex Trading Scams

When it comes to money, the one thing you can be certain of is the fact that there will be some trying to take advantage of others, either through deception or outright scamming. It is the same in any industry when money is involved, fak clothes, fake concert tickets and you would be correct in […]

When it comes to money, the one thing you can be certain of is the fact that there will be some trying to take advantage of others, either through deception or outright scamming. It is the same in any industry when money is involved, fak clothes, fake concert tickets and you would be correct in […]

When it comes to money, the one thing you can be certain of is the fact that there will be some trying to take advantage of others, either through deception or outright scamming. It is the same in any industry when money is involved, fak clothes, fake concert tickets and you would be correct in assuming that there are trading and foreign exchange related scams. In fact, there are a lot of them, so many that we won’t be able to go through them all, but we will be looking at some of the more prevalent scams that you see about and the ones that are most heavily advertised. So let’s take a little look at what they are.

Fake mentor/account manager:

We have combined these into one as they are pretty much the same thing. If you have been on Facebook, Instagram, or Twitter, I am 100% sure that you would have come across at least one of these people. I am sure you have come across a post similar to this:

“I see a lot of people’s chill and wait for the right time, My friends the truth is if you keep waiting for the right time, you will never get things done. Invest in Forex and Binary Options to earn massive profit weekly ($600 to earn up to $6000 return of your investment or more) Everyday is an opportunity to get started, just give it a try . Invest in yourself and start now, Dm me for more info. I would guide you through the financial free lifestyle”

Looks legitimate right? Anyone offering this kind of money is not a real mentor and they certainly aren’t an account manager. In fact, their only purpose is to try and get your hard-earned money. It is as simple as that, if you come across anyone offering this kind of service, or offering to look after your money and trade for you, avoid it like the plague. Legitimate account managers will not use social media to try and get you to invest. You will simply send your money and never hear from them again.

Trading signals/expert advisors (not all):

I will start by pointing out that not all signal providers and expert advisors are scams, in fact, there are some out there which can be very profitable and are there to legitimately help otters to earn, the problem is that they are often the diamonds in amongst the thousands of pebbles. There are so many expert advisors and signal providers available that it is impossible to find the real ones from the fake ones, and the scammers love this as it makes it so much harder to spot the fake ones. It also does not help that some statistics and account monitoring sites actually let you upload your own data, meaning that all results can be completely fabricated. It also does not help when they want you to sign up with a specific broker that they either work for or get compensated for bringing in new clients.

It can be quite hard to work out what is real and what is not, people will also look at the reviews, but they can be just as fake as the software. Our only advice for finding legitimate signals or EAs are to look at the statistic sites that do not allow for manipulation of the data, only go with personal recommendations from people you know, and also try looking for the ones that don’t require you to sign up with a certain broker or to pay a subscription fee.

Ponzi schemes:

You have probably seen these being advertised, sign up for $xxx and get a monthly return of 40%, well let’s face it, you won’t, or if you do, the first will be the only payment that you get, you get that initial return as a goodwill gesture to try and get you to deposit more. If you do, that money will be gone and any further payouts will be delayed. These are seriously popular, which is unfortunate as they all eventually fail. There are some legitimate MLM companies out there, but these are all about selling and not the actual product that they are advertising unless you are a marketing guru, you are almost always guaranteed to make a loss, so our advice is to avoid them at all costs.

Fake broker:

This is where some of the cammers go the extra mile, they will set up an entire broker in order to try and bring in customers, who will deposit into the accounts and place some trades. The broker will then either trade against them and cause a stop out so the customer loses, or they will simply make up excuses as to why they cannot payout. These sorts of brokers also often use scare tactics or harassment to try and get their customers to deposit more money, something that unfortunately can scare a lot of people into doing, any money you put in you will not be getting back.

In order to avoid this it is important that you do your research, always check for reviews on reputable sites (not just any review site), check the trading communities where people often post their honest views about things, and check for various scam warning such as limited ways to contact, the location, and who the owners are, often scammers are serial scammers so you may find the same names popping up in a number of different places.

Those are just a few of the many ways that people try to scam others when it comes to trading, it is important that you are frugal with your money, do your research before ever departing with any, and while it may sound counterproductive, always assume something is a scam until you are able to prove that it is not. This way you will be able to keep both your money safe and your mind at ease. There are a lot of scams out there, so stay alert and diligent, then you will be fine.