We have already discussed one of the largest scams in the Forex industry - brokers-scammers. But this is far from the most common type of deception.
Gold Grail Sellers
If you know at least a little about Forex, then you’re aware that no strategy, no trading robot, no indicator gives a 100% guarantee. Many beginners come to trading for quick and easy money. Scammers are targeting those traders.
If you do a quick Internet search, you will find hundreds of strategies and robots that promise you thousands of dollars in a matter of days. In order to avoid fraud, you need to remember one thing:
- If the seller's promise is too good to be true, then it's a scam!
Of course, a beginner cannot develop a strategy himself. You need to find a ready-made one. But be careful. The promised result of profit should not exceed 20% because this is already a great goal when trading with weighted risks.
Money Managers
Some Forex investors choose to avoid trading entirely. They delegate this responsibility to more experienced traders - money managers. Unfortunately, not all of them provide a real service. Some just collect money and vanish.
To avoid cheating, follow a few rules:
- Give preference to a manager that cooperates with someone you know for a long time.
- Check online reviews of a potential manager. Avoid a large amount of exaggeratedly good reviews.
- Try to work with a manager that trades with a trusted broker. Deposit funds to the account through the company. Make sure that the manager can’t withdraw or transfer your funds to another account without your consent.
The same tips apply to another group of scammers - signal providers. Before you pay for such a service and follow the advice of another trader, check his competence and reliability.
Fake Brokers
We’ve already talked about people that create brokerage companies for the purpose of fraud. However, this is not the only way to fool traders. Some scammers use trusted brands that already exist to scam others. To do this, they pretend to be employees of a well-known brokerage company and try to fraudulently get your money. How to catch such scammers:
- Check the domain of the site before you register or deposit money. This should be the company's official website or their landing page. A link to this page should be published on broker’s official pages in social media. Please note that domains for some countries may change slightly but the basic domain on English version should remain the same. Scammers often use domains that are similar in spelling. Be careful.
- Make sure to talk to real company employees before taking any action. If in doubt, contact the broker via their official email or live chat. Provide the phone number or email from which you were contacted to verify the identity of the employee.
- Send money only to the company’s official accounts and e-wallets that are indicated on the website or in your Trader’s Cabinet.
These are the main types of scams that you may encounter while trading. Be careful and send your money only to trusted companies and people.