Forex trading scams are when fraudulent individuals use many advanced techniques to take money from unsuspecting victims through forex scams. They may promise overnight investment opportunities wherein traders will earn large returns overnight, however, they oftentimes deliver false information. Most fraudulent signal providers are illegal entities that also commonly offer similar advice as those offered by legitimate brokers and dealers. As a result, these types of forex scams commonly fall under the category of “Computer Fraud” or “Online Advertisement”.
The most common types of forex trading scams include: online advertising, telephone solicitations, cold calling, and referrals. Online advertisements commonly extol the virtues of using only “legitimate” forex brokers while urging new brokers to use their services. These brokers, apparently, have developed the skills and knowledge required to successfully trade currencies without endangering their clients. To convince potential customers that these brokers possess the skills and knowledge necessary to successfully trade currencies, the brokers “only” need to post their services via websites. Eventually, though, traders who sign up for such “advice” discover that it is just another website advertisement.
Another type of forex trading scams involve signal sellers. These fraudulent traders require investments from their customers in order to obtain “tips” regarding when to purchase and sell certain currencies. In order to get started, they provide incentives such as free sign ups, no-load funds, and exclusive trading opportunities. Once traders fall victim to these scams, they lose money as they are unable to follow the advice given. Most people who fall victim to this type of forex scams eventually lose everything, including their investments.
Forex trading scams that deal with forex robots are also a common type of forex scams. While they may sound like legitimate forms of investment, this line of business involves high levels of risk. Some types of forex scams that deal with forex robots include false advertising about these robots’ benefits, unrealistic commission payouts, and false claims that traders can cease losing money once these robots start working for them. Others involve issues like excessive commissions and a “one-size-fits-all” approach which means traders cannot make effective decisions based on their own knowledge.
Forex scams involving high leverage are a type of forex trading scams that have been around for years. When a trader leverages his or her trading capital to the point where they can earn profits by using relatively small amounts of money, this strategy can work against the trader. As the leverage increases, so does the risk. Eventually, if a trader is not careful, he or she could lose all of the money that was put into the account through leveraged transactions.
While there are several types of forex scams that can affect traders, the two most common types are the “pump and dump” scams and the forex pump and dump scams. The “pump and dump” scams involve deliberate misinformation about a situation where a trader hopes to benefit from a major increase in one type of currency while keeping the original currency rates stable. The goal here is to make quick profits that are significantly higher than what would be prudent to sell in this kind of situation. With this type of strategy, it is very easy to get started and all it takes is a low capital investment. However, this strategy can also lead to significant losses if the original currencies do not perform well enough.
Another type of forex scams involves brokers who recommend certain currencies but are actually connected to trading floors that receive a significant amount of volume from brokers that have very little experience or are illegal aliens. In these cases, brokers convince traders to invest large sums of money in ways that they are not qualified to provide. They may recommend currencies that have low liquidity, high commissions, and little liquidity. Many times this is done by way of indirect pressure from brokers on regulated investment platforms. As soon as a trader opens a new trade, he/she may be pressured by the broker to invest even more money, sometimes using unscrupulous tactics to convince the trader to continue despite the fact that the investments are speculative and risky.
Finally, many traders find themselves the victims of trading investment scams due to the quality of research provided by online forex brokers. When selecting an online forex broker, it is important to thoroughly check their reputation and track record. A broker should offer a wide range of trading systems and advice to choose from. They should also offer a fair and solid trading system with clear instructions for installation and operation. If you have any doubts about the integrity of the online broker you are working with, you should consider switching to a different broker.
3 Forex Scam Red Flags
Forex scams are rampant in the world of forex trading. It’s not hard to see why. Forex is an exciting way for individuals to earn money. It’s true that there are those who have managed to earn lots of cash through forex trading alone.
Unfortunately, too many people have fell victim to forex scams. Forex is a tempting avenue to financial success for some individuals. It’s true, it is fast and easy to get started. However, this doesn’t mean that you should jump right into forex trading without educating yourself about what you’re getting into. If you do, you might find yourself out of business in no time at all.
There are certain forex trading scams that if not avoided can leave you with a wrecked financial future. Fraudulent brokers are usually represented by red flags. When an investor gets a red flag, they should run. The following are the signs that indicate you may be dealing with a fraudulent broker:
o Fake Platforms – One of the forex scams that fraudsters will use is to set up fake platforms for investors to place their trades on. These forex trading scam operators will advertise that they are offering you “a professional platform designed especially for investors”. In reality, these platforms are made to look professional but are in fact stuffed with programming bugs and won’t even load on your browser. Anytime you load up a webpage from an investor’s site, you can always tell if it’s a scam.
o No Money Back Guarantee for advice and robots – If you are ever asked for any money up front, it’s probably a forex trading scam. Investors need and deserve to get their money back in a timely manner. If you ever hear or see anyone promising you that they will give you 100% returns or a low risk/reward investment, then don’t even think about it. Any company that wants to have a guarantee like this needs to be approached with extreme caution. You may want to contact a fund recovery agency instead if you think you have gotten caught in one of these scams.
o Instant Sales & Deposits – These forex trading scams are made to get as much money as possible without having to wait for a broker approval. An investor will be tricked into investing money into an account with no hope of seeing profits. Once the money has been placed into the account, the broker will start asking for high-fee investments, low returns, and little to no support. Some investors have even lost thousands of dollars trying to recover these trades.
o No final exam or validation – These forex trading scams will typically give the victim a final exam or validation. If the victim is smart, he will realize that the claim is bogus and that he does not deserve to receive his money back. The scammers will often tell the victim that they will require proof of loss or damage in order to ensure that the claim is valid.
After you have identified the forex trading scams you are experiencing, it is important to contact your broker immediately. Brokers are usually well-trained in how to react to complaints from customers. They are also experienced in dealing with forex scams, so you may want to seek out brokers that are experienced in this field. This will ensure that you get the help you need from your broker and get rid of the forex trading scams from your life once and for all.
o No regulatory body or institution can provide protection for you – There are no regulatory bodies or institutions that can provide protection for you from forex trading scams. Therefore, it is up to you to take every measure necessary to protect yourself from such scams. You may be required to take certain precautions. You may be asked to modify your computer software in order to prevent the occurrence of these schemes. However, these measures are often effective enough in preventing forex trading scams.
These are just a few red flags. They may appear at first glance to be insignificant. However, if you continue to be deceived by these forex trading scams and do not take action, it is only going to continue to get worse. You should therefore learn how to avoid these scams.