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Sophia

Frauds in Forex

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Hi there,

I am a new investor and interested in Forex. Are there any scams in Forex I should be wary of, or is it a secure trade?

 

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Hey Sophia,
Scammers penetrate all trades and Forex isn't spared either.
The best way to identify a Forex scammer is if they guarantee a huge profit with negligible or no financial risk to you. A scammer hooks you by making an offer quite attractive. Remember that free cheese is the mousetrap.
Do not fall for a fake Forex investment scam. Such a hoax involves an advert promoting phony trades in Forex investments and counterfeit investment funds in Forex. You fall for the scam when you send in your money, hoping for an investment where you sit back and enjoy huge returns.
With a Forex robot sham, you would be enticed to work with Forex robots. They are trading programs, Forex computer code, or algorithms. They create technical signals for exiting or entering trades.
Forex Signal vendors send you trading ideas, such as entry price, stop loss, direction, currency pairs, and target levels. Most of these ideas happen to be false.

 
 

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Hello Sophia,

More than $5 trillion is traded on Forex every day. It’s never been easier to access the largest market in the world and because of that, some people are trying to take advantage of Forex through various scams. Whether trading is your full-time job or you’re just trying to make some extra money, everyone should be aware of today’s scams in Forex.

Nowadays, a popular type of Forex scammers is the “signal sellers”. Those can be retail companies, pooled asset managers, managed account firms, or individual people that provide “services” and ask for a weekly/monthly payment in return. Signal sellers offer clients insight into favourable times to trade the market that’s based on expert recommendations. Signal sellers often talk about their vast experience in trading and mention success stories where they made people wealthy. If the client falls for it, a signal seller will ask for a certain amount of money in return for trading advice. 

Another type of common Forex frauds is robot scams. These robots refer to a trading program that uses algorithms or computer codes as an indicator to enter or exit the market. However, you should know that some robots aren’t scammers. For instance, some Forex robots are developed using Expert Advisors (EAs) within the common MetaTrader series of trading platforms.

Doing some research online and identifying popular robot scammers could be a good idea. 

Also, there are some trading systems today that are extremely expensive, up to several thousands of dollars. This is also a type of scam since no one should have to pay more than a few hundred dollars to use a legitimate trading system. Such expensive systems try and justify their prices by guaranteeing to provide excellent results, but don’t fall for that. 
 

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