As long as the Forex market exists, there have been forex scams.😤 Many fake “traders” out there often promote big earnings 💵 and luxury lifestyles 🏖️ , which “you can have in few weeks” if you pay them, buy their signals, courses, or join their brokerage. These claims 99,9% are typically false. 👎
Forex scammers usually target beginners and uneducated traders. The best way to avoid getting scammed is by choosing only regulated and trusted Forex brokers and learning trading essentials before entering the markets! 😉
6 Major Types of Forex Scams to Avoid
There are thousands of Forex scams around us. We have chosen the most popular & dangerous.
#1 Guaranteed Returns Scam
Forex scams come in many shapes and forms, with the simplest and most common scam, which is the guaranteed returns scam. Scammers use this one to access other people’s funds easily. Basically, someone will contact you, stating that he has a guaranteed-win strategy and wants you to invest your own funds so that you become rich just like the ones that have already invested with him. What you should know here is that the truth is very far from all of this. There is no strategy, there are no returns, and above all, there is no honesty.
#2 Signals Scam
Another forex scam is the signals scam. Here you must pay a subscription to receive random signals that will have a very different track record from the one you saw before your subscription. It starts with the scammer posting fake track records and false profit statements that a 5-year-old can photoshop. Then, when people start subscribing to this signal provider, suddenly, the market becomes too random to be predicted, and the results go south. Providing signals is extremely difficult due to the different nature of risk profiles, timeframes, and even timezones.
#3 Holy Grail Strategy Scam
Many aspiring traders get scammed because they are trying to find someone who offers them infallible management while using some sort of a perfect strategy. Let us get one thing clear; financial markets can be chaotic, random environments. This means that no strategy can solve such complexity. Every time you see one of those holy grail strategies, you have to disregard them. No one will put this hypothetically perfect strategy online for everyone. Personally, if I had one, I would use it myself and never tell anyone about it.
#4 Email, WhatsApp, and SMS Scams
Some scammers like to send emails to appear professional. Maybe you have received emails with professional signatures stating that they have chosen you to be one of the first investors in their Robo-advisor who has solved the mystery of FX market. All you had to do is wire them money. Simple, right? Robo-advisors are automated trading systems created for specific market conditions. Most of the public and paid Robo-advisors are a waste of time and major scams. We have literally seen a Tweet with someone selling one for $500 and writing, “I never use Robo-advisors, but heard this one was good, DM me for purchase.” It looks like even scammers have gotten a little lazy.
#5 Instagram & Youtube Scams
We are sure you have encountered some profiles claiming 90% and 95% accuracy in their trades. Have you ever thought that if they did have a trading strategy that is that accurate, why would they spend their time trying to sell it when they can just put it to use and make themselves rich? The short answer is that they are trying to scam you into believing that it works, and they will provide all sorts of “proofs” and “reliable” track records to get to your money. Now, what about the forex scammers that always pose next to a Lamborghini or a Ferrari and imply that it was their trading that made them this amount of money?
I used to know an extremely unlucky guy, who traded and spent years with zero return. One time, I was checking his Instagram profile and I could not recognize him. The number of fancy cars and classy places that were implied to be his was enormous. When I asked him: where did that come from? He said, nowhere, they were cars in the streets he came across and just posed next to them. Now, I know that guys need to satisfy their egos to show superiority and impress people, but in this case, it’s called deceiving people.
One last thing about Instagram. On average, I receive 3 message requests with messages that guarantee gains and fortunes. Whenever we publish an Instagram or a Facebook post related to trading, we get comments such as “I owe it to Mr. X for making me $65,000 in Bitcoin, here’s his profile link”. Sadly, scammers outweigh honest people by a large number these days!
We have also researched 10 of the most popular Trading Gurus that we see when browsing the world of Finance Youtube – check out our video:
#6 Unregulated Brokers
Have you ever seen those big flashy ads on some websites with 0% commissions and fees? They generally have two striking buy and sell buttons to make you think you are all set to trade risk-free and fee-free. Well, this is another deception made by shady unregulated brokers. First, you will see zero spreads before finding enormous costs to your trading that can take the form of commissions or deliberate slippage, which is when your broker does not fill your order at the desired price.
Make sure you understand this phrase: An unregulated broker is a scammer, and you will not get your money back if you create an account with them. Even if, by a miracle, they send you back the money, there will be enormous costs and banking problems. Generally, good respectable brokers are regulated by government entities such as the SEC in the United States and the FCA in the United Kingdom.
Best Regulated Forex Brokers Available Today
– Plus500 offers only CFDs on Forex.
How to Avoid Forex Trading Scams?
Forex trading has the potential to be a valuable source of income as long as we are careful. Here is how to avoid the noisy scamming business:
👉Trust that you are the only one who is in charge of making you money. No one will be willing to do that for you.
👉Understand that the FX market is too complicated for someone to offer you the holy grail. Instead of that, choose free Forex resources, for example, our trading PDF, which is 100% FREE.
👉Know the limitations of gains and losses and practice good risk management. This means never risk more than what you expect to gain on a trade.
👉Make sure that everyone parading around, saying they got rich from trading, are overcompensating for something by lying.
Trusted and Free Forex Learning Resources
👍 Investopedia (the worlds leading source of financial content – https://www.investopedia.com
👍 The Trading Game (Forex & Stock Market Simulator and School) – https://tradinggame.com
👍 The Balance (Free Expert Advice on investing in the markets) – https://www.thebalance.com
👍 Forex Factory (Scheduled Economic News Announcements) – https://www.forexfactory.com
In the end, you can extract a lot of potential from trading FX but only by being patient, rigorous, and disciplined. Be safe! ❤️