As we have grown ahead with the moving technology, we have become more vulnerable to different scams and frauds. Almost every section of the market today faces the issues of scamming or fraud and forex is nowhere different from it. Forex trading scams are slowly becoming quite common.
The guide will provide complete information regarding forex trading scams with examples and how to avoid the forex trading scams.
- 1 Forex Trading Scams: Things that we can do to keep safe.
- 2 Forex Trading Scams with Examples
- 3 Forex Trading Scam on Instagram
- 4 Forex Trading Scam on Facebook
- 5 Forex Trading Scams on Reddit
Forex Trading Scams: Things that we can do to keep safe.
Forex trading scams are one of the most annoying things that can lead us to huge losses without any failure. These scams ruin our user experience and reduce one’s interest in trading.
The best thing one could do to stay safe from the ongoing forex trading scams is to contact a forex broker who is reliable and viable. Here we are with some best Forex trading tips that can help you keep safe from the forex trading scams.
How to avoid forex trading scams?
- In case your broker is not responding to you, it is a high signal that they are not looking forward to your interests and can make a scam anytime.
- Make sure to do a proper search and try to find a broker that has no complaints.
- Make sure to read the fine prints on the given documents very carefully to keep yourself through the process.
- If you are a newbie, try to start your forex trading journey with a mini account and small balance first. You can make trades for a month before opting for the withdrawal segment.
- Make sure to check the trades for security and figure out whether they suit your objectives well or not.
- If you have been stuck with a bad broker, you can review all your documents very carefully and discuss things with the experts before taking action for more drastic measures.
Forex Trading Scams with Examples
The Point-Spread Scam.
It is an old forex trading scam based on manipulating the computer of bid-ask spreads. The scam reflects the commission of back and forth transactions that a broker usually processes. The total spreads are different in the different currency pairs. The old point spread scam occurs when many differences are being calculated among the spread points among various brokers.
For example, some brokers don’t provide two-point or three-point spreads in currency exchange of EUR/USD but if we talk about it being higher than seven pips or even more. These additional four pips on every trade and the potential profits thus made can be easily eaten away as commissions by the brokers. Yet it is an old scam, but still, the tendencies for this scam’s existence are pretty high.
The Signal-Seller Scam.
It is a new day scam that is being identified at different favorable times. Signal sellers are different sellers such as managed account companies, individual traders, retail firms, pooled asset managers, or different others who offer consistent charges on purchasing sales of the currency pair based on professional recommendations.
The signal seller scammers are the ones who collect money from a certain number of traders and disappear over time. They usually provide appealing trade options to the users to grab their attention and then allow the single money to perpetuate. The signal seller scam has become quite a common and wide problem these days. Not all the signal sellers out there are scammers, but not all of them are honest enough to rely on.
“Robot” Scamming is another one of the most popular modern world forex trading scams that are present in the different types of forex developed trading systems. The scam relates to the touting of the system’s abilities to generate automatic trades by the scammers. The automated trades thus processed will be done even when you are sleeping or earning vast wealth.
This scam is usually automated with the help of computers and hence named the “Robot” scam. The worst thing about this scam is that the majority of the systems involved are never being submitted or reviewed formally or tested by the different independent sources.
Suppose you are willing to keep yourself safe from this annoying scam. In that case, it is highly recommended for you to keep testing the parameters and the optimization codes of the trading systems eventually.
Forex Trading Scam on Instagram
Scammers and con artists know exactly how to use Instagram to cheat people out of their hard-earned money.
For example, there is a Forex scammer using Instagram to scam people. The scammer claims he can double or even triple your money with his services. All you need to do is send him $1,000 and he will invest it for you. However, it is very easy to see through the scam by simply visiting the Instagram account.
In this case, we see a lot of Instagram pictures of the scammer and his client. In some of these pictures, the scammer is holding a $1,000 note and the client is excited to show his $1,000 to the scammer. The scammer is also bragging about the money he makes for each client.
In addition to this, when you visit the scammer’s Instagram page, you’ll see a lot of “Follow me” messages to other traders, suggesting they follow him too. But if you look closely at their profiles, you will see that most of the followers are just bots or fake accounts. The scammer is making all the money from those “followers”.
Also, the scammer’s profile picture is very similar to the Facebook logo.
Here’s how to avoid falling victim to Instagram scams?
- Understand the risks of trading online
- Scams exist to trick you into thinking that something is legitimate. Don’t let anyone tell you otherwise.
- Read the fine print
- The more words there are in an online ad, the more likely it is a scam. A lot of online companies put their name and website URL on Instagram ads instead of adding any information. If they aren’t giving details, the only information you can trust is the image of the person promoting the service.
- Verify the company’s address and website
- If you’re unsure, visit the company’s website or ask for more information via email or phone call. Avoid clicking on a link that looks suspicious.
- Don’t share your personal information
- Before handing over any financial information, find out if the company is regulated by the Financial Conduct Authority (FCA) in your country. You can search for this information using the FCA’s “Find Out More” tool.
- Consider investing with an online broker that’s regulated
- It’s much easier to regulate and monitor brokers that operate through an established bank. Online brokers also provide more safeguards and protection against fraud. They are more expensive to open an account with, but they are worth considering.
- Use an escrow system
- An escrow system keeps your money safe while it’s being transferred. It also allows you to withdraw your funds at any time.
- Never pay with a debit
Forex Trading Scam on Facebook
“Forex scamming” is a new form of investment fraud that has been taking place online. These “scams” are designed to convince people to use their personal information to trade on the Forex market without any financial knowledge or experience.
Forex trading scammers use the real Facebook name of famous celebrities or companies and post fake ads. These fake accounts make the Forex traders believe the account belongs to them and that it is a legitimate company or person. The trader clicks the link, enters his details, and then gets scammed.
People are falling prey to these scams because the ads on Facebook are very convincing. People often see people sharing success stories about their Forex trading and they begin to believe that they can do it too.
In reality, most of these scams are based on “Ponzi schemes”. Ponzi schemes are a type of investment fraud that takes advantage of the trust and confidence people have in others.
The Forex scammer will promise big returns in exchange for people’s personal information. The person who receives the information (called a “sucker”) is promised that his or her information will be traded on the Forex market and that he or she will make big money.
While some people might be tempted to try the “free money” scheme, you should never give away personal information or share your bank details with anyone.
Forex Trading Scams on Reddit
Scammers are posting fake testimonials about their Forex broker on Reddit. They claim that their account has doubled and tripled in value since joining their broker. They also claim to have saved thousands of dollars by joining their broker.
These testimonials are posted on Subreddits like /r/Forex, /r/TradingAdvice, and /r/ForexBrokers. People who click through to the links are tricked into believing that their accounts have really increased in value, and they are given an offer for a bonus which costs around $1000.
Many people are taken in by these forex scams and lose hundreds of dollars as a result.
Forex trading offers a wide range of opportunities to traders, but it also does come up with numerous scam options along with it and that’s what you need to work on. We have provided one of the most common forex trading scams with examples and have provided some tips on how to avoid the forex trading scam that you can work on to make the forex trades safe.