Because of the growing number of scam activities happening in the Forex market, a lot of people are starting to doubt the legitimacy of Forex trading. Some people have started to ask if FX trading is a pyramid scheme. Of course, Forex is not a pyramid scheme. But because of its popularity and the involvement of money, the Forex market is the subject of scam activities as many people are eager to earn big while inside the comfort of their homes.
One of the things that scammers guarantee you is a large profit and no financial risk. To end all of these speculations, there is no such thing as a 100% guarantee in Forex. If there is such a thing, traders will never share such valuable information with market players. Beginner traders are particularly the target of these scammers as they are not adept at the activities of the market. Just by offering some attractive deals, they instantly get hooked up. The bottom line here is that, if the offer is too good to be true, you should raise your suspicion.
Three Types of Scams that Forex Traders Must Avoid
So basically, the common prey of these scammers are unsuspecting new traders. They know that these people are not well-aware of the market, therefore, they will easily fall into everything that you say, especially if the deal is good.
Forex robots are famously used in the market. They have proved their worth and many traders find them very helpful. It’s important to say that not all Forex robots are scams. However, if you search online, you will find a long list of Forex robot scams, and knowing how to spot one will be very helpful. To avoid becoming the prey of these scammers, you must check these things;
- Unrealistic marketing messages.
- Unbelievably high growth returns percentage.
- Scalping strategies that are undiversified.
- Unregulated, unlicensed brokers.
If you are planning to use a Forex robot to automate your trades, treat it like it’s a business and not just an emotional decision. Make sure that none of the things mentioned above are present on the Forex broker who will provide the Forex robot.
Signal Seller Scam
Another form of scam involves the Forex signal. These scammers will try to send out trading ideas related to currency pairs, entry price, direction, target levels and stop loss. To avoid being a victim, check out these things first;
- Subscription fees
- Broker-tied signals
- Unverified results
Just like in the Forex robot scam, the best thing you should do to avoid such scammers is to be wiser than them. Conduct some research to prove their legitimacy.
Phony Trading Investment Scams
Flashy advertisements, fake forex investment funds – they are all very rampant nowadays. In this type of investment, traders are offered to get investment returns very easily. All they have to do is send money to the salesperson, and you just have to sit back and wait for your returns. This is such an obvious scam but people still get fooled by it. Of course, those who get fooled never see the salesperson again, and their money vanishes into thin air. Then, they mostly blame the fall on the market. Be wary of these scammers when Forex Trading.