Three major forex scams that should be avoided
Those suspected of foreign exchange scams, money scams and general trade scams are always trying to find new and innovative ways to take advantage of new traders. However, people usually suffer from three major foreign exchange scams. Understanding them is the first step in trying to avoid them.
1 Forex Robot Scam
A Forex robot is a trading program that uses algorithms or lines of computer code as a technical signal to enter and exit a transaction. Typically, forex robots are built using expert consultants or EAs in the popular MetaTrader trading platform suite.
Of course, not all Forex robots are scams. Searching for a list of forex robot scams online may help you avoid some known scams. However, please note the following points to avoid any Forex robot scams you may encounter:
- Marketing information is impractical: If the author of a Forex robot has to "dream" to do what it can do for you, then they are unlikely to get results support. After all, the numbers are not lying, or are they correct?
- High rate of return on growth: Some foreign exchange robots, as an advertising system, should be able to achieve a return of more than 4,000% in just a few years. This may seem great, but it's important to look at the statistics. The gain may be just a closing trade, the system may have an open trade, and if the stop loss is hit, it may offset any gains.
- Undiversified scalping strategy: Many Forex robots use a scalping system, which means they trade with meager profits. This shows a high winning rate and can improve results under favorable market conditions. However, market conditions will change. If the system loses more than the winning amount per transaction, then only a small amount of loss transactions can erase any accrued profits.
- Using unregulated brokers: Some Forex robots use unregulated brokers to show very good results, which no one has ever heard of. In this case, the results of using their own bank spreads may be good, but if you open an account with them, your spreads and commissions will increase, which will consume most of the profits.
After all, if you're thinking about using Forex robots, you should think of them as business rather than making emotional decisions. First search online for a list of Forex robot scams and then conduct your own due diligence. As the saying goes, "If it looks too unbelievable, it usually is like this."
2 foreign exchange signal seller fraud
The foreign exchange signal seller is the individual who issues the trading advice, usually including the currency pair, direction, entry price, stop loss and target level. There are many things to note, so you won't be a victim of these forex trading scams and money scams:
- Subscription Fees: Individuals may sell you amazing results without any verification. To access a transaction, you usually pay a high subscription fee, otherwise the transaction starts at a lower price and uses credit or bank details for other types of fraud. If their trading calls are so good, why should they all be sold?
- Broker Signal: Some signals sell you with trading signals, but only if you sign up with a specific broker. This means they may get kickbacks from the broker, so they are motivated to send you any trades for you to execute, whether the trade wins or loses. That being said, some people still want to keep you profitable so that they can continue to collect kickbacks from brokers, which is the cost of their services.
- Unverified results: Very good, it's good to say that your Forex signals get a high percentage return, but if they can't display a verified track record, it means they are not trading signals themselves - this is a danger in itself signal.
The key to avoiding any type of currency exchange scam, money scam or transaction scam is to think and conduct due diligence again like a business, rather than making emotional decisions based on false promises and dreams.
3 Phony Forex Trading Investment Scam
Today, there are many advertisements promoting false foreign exchange trading scams and false foreign exchange investment funds. Essentially, a smooth marketing message or salesperson will sell to you with the phantom or unverified results of its Exchange Fund. All you have to do is send them your investment and you can sit back and enjoy the rewards.
Of course, many remitters often don't see it anymore. The company said that they have never heard of you and have not received any funds from you. Originally a forex trading investment scam, it has now become one of these money scams.
Another result is that they usually open an account for an unregulated shady agent. However, after one or two transactions, they cleared your account. Although they blame it on the market, everything is owned by their brokerage firm. And, because it's unregulated, it's hard to take back your money - it's just another currency scam.