How do I Avoid Forex Currency Trading Scams

There has never been a time more advantageous to enter the global currency market. At the stroke of a button, you could be trading the Euro, British pound, Japanese yen, US dollar, or even the Russian Ruble! You’ll have no trouble selecting currency combinations that appeal to you because there are hundreds to choose from.

“Can you get rich trading Forex?” Many people wonder. While the financial rewards of trading the Forex market appear to be substantial, it is far from simple. It’s important to have a solid trading education, a well-funded trading account, and a grasp of risk management tactics.

Scams that involve investments come in a variety of sizes and shapes. Some of the frauds are even named after their founders, such as the famed Charles Ponzi’s Ponzi scheme. Forex con artists prefer to prey on inexperienced or ignorant traders. Before you enter the markets, the best method to avoid becoming a victim and being scammed is to receive a good Forex trading education.

How to Recognize a Scam

Many people ask themselves, “Is Forex a pyramid scheme?” because of the wide number of scams out there. No, Forex is not a pyramid system in and of itself. Within the field of Forex trading, however, there are a variety of scams. The most obvious sign for a Forex con artist is a promise of extraordinarily huge returns with little or no risk.

To begin with, there is no such thing as a hundred percent guarantee. If there was, there’s no way traders would share information with other market participants.

Some of these offers may appear very appealing, particularly to new traders. The only free cheese, as the phrase goes, is in the mousetrap. The basic line is that if anything appears to be too good to be true, it most likely is.

Three Types of Forex Scams to Stay Away From

Money launderers, Forex scammers and the general trading con artists are continuously looking for new and novel ways to take advantage of novice traders. However, there are three broad types of forex scams to which customers are frequently exposed. We’ll go through how they function in more detail below, as understanding how they work is the first step toward avoiding them.

Scams involving robots

A Forex robot is a trading software which opens and closes transactions using algorithms, or lines of computer code, as technical indications. Not every Forex robot is a rip-off. Expert Advisors (EAs) inside the popular MetaTrader suite of trading platforms, for example, can be used to create Forex robots.

Looking for a Forex robot scam list on the internet might help you avoid some of the most well-known con artists.

There are a few more things to look out for in order to avoid Forex robot scams:

• Messages that are unrealistic in nature. It’s unlikely that the inventor of a Forex robot will be able to sell you on the dream of what it can do for you if they don’t have the results to back it up. After all, don’t statistics tell the truth
• Returns on investment that are extremely high in percentage. Exceptionally high % returns on investment. In just a few years, some Forex robots claim to be able to earn returns of over 4,000 percent. This may appear to be amazing, but statistics must be considered. The return may only be closed deals, or the system could have open trades that would wipe out any gains if the stop losses were hit.
• Scalping tactics that aren’t well-diversified. A scalping strategy is used by many Forex robots, which means they trade for relatively little earnings. This practically demonstrates a high win rate and can further inflate the results in a market that is supportive. However, market conditions vary, and if the system loses more deals than it wins, a few losing trades will quickly wipe out any profit.
• Using brokers who aren’t regulated. When utilised with unregulated brokers that no one has ever heard of, some Forex robots deliver exceptional results. In this case, the results may be good on their own interbank spreads, but if you create an account with them, your spreads and commissions will be bigger, eating up a large portion of your profit.

Finally, if you’re thinking about employing a Forex robot, take it as a business decision rather than an emotional one. Start by looking for a list of forex robot frauds on the internet, and then do your own research.

Scams involving signal sellers

Individuals that offer forex signals typically send out trade ideas that contain a currency pair, direction, entry price, stop loss, and target levels. There are a few things to keep an eye out for in order to avoid falling victim to forex trading scams:

Fees for subscriptions

 People can claim to have outstanding outcomes without having them verified. You may be required to pay exorbitant subscription fees to gain access to the markets, or they may start out modest and then exploit credit or banking information for other types of money frauds. Why would they sell their trading signals if they are so good?

Broker-tied signals: Some signal providers will only provide trading signals if you sign up with a specific broker. This implies they may have received a commission from the broker and therefore they send you any deals, regardless of whether they win or lose. Having said that, some people will want to make you profitable so they can keep getting kickbacks from the broker, who works as the middleman.

Unverified results

It’s all well and good to claim that your forex signals have made a high percentage return, but if they can’t show a track record, it means they aren’t trading the signals themselves, which is a clear red flag.

Scams in Trading and Investing

Nowadays, there are a lot of advertisements for bogus forex trading investment scams and phony forex investment funds. Some traders have claimed that Forex Kings and Forex Paradise are scams in the past.

However, there is no substantial proof to back up these allegations. In essence, a persuasive marketing message or salesman will persuade you to invest in a forex fund based on phantom or unconfirmed results. All you have to do now is send them your money and sit back and watch the money grow.

Why Should You Educate Yourself About Trading Scams

Losses are unavoidable in Forex trading because it is risky.

 Retail speculators are virtually always trading with insufficient capital, and they are susceptible to gambling addiction and incorrect leverage utilization. Trading without skill is just gambling for any speculator.

To be fair, the major reports of money stolen by brokers are the result of poor trading, not scam brokers. Unskilled traders who invest time in creating a suitable trading approach will become better traders much faster and will be less likely to fall victim to Forex fraudsters since they will be more informed about potential hazards and what to avoid.