Forex scams have become a major problem for online traders in recent years. If you are a new trader with little-to-no experience, you can easily get cheated within a few seconds by the forex scammers.
This is why I always recommend every online trader gather adequate knowledge regarding forex trading before investing money. At the same time, having an in-depth idea about these online trading scams and scammers is also mandatory.
Today, with this post’s help, I will explain 10 major forex scams and how to spot a forex scammer.
So, here we go….
10 Forex Scams & Ways On How To Spot A Forex Scammer? (2023)
1. Dishonest & Unregulated Brokers
An unregulated or dishonest broker is the type of broker who doesn’t comply with the rules & regulations of the financial market regulator of your country.
Most brokers use some sort of forgery documents to become licensed brokers in the online trading industry.
So, it is essential for you to check out all the details of a broker before you trade with any broker.
2. Signal-Seller Scams
Signal traders are mainly retail firms, individual farms, or maybe those managed/joint account companies. Their main target is the rookie traders who don’t have the required knowledge to invest in the right sector.
To avoid signal seller scams, you can follow these:
- Making a thorough analysis of the trade records of the signal sellers.
- Trying out their signals using a demo account.
- Believing your intuition.
Following the above techniques will help you find out the real signal seller.
3. Investment Scams
One of the most common forex trading scams is a simple marketing message mailed to your inbox.
Looking at those lucrative offerings, you may give complete control to those so-called industry experts.
To avoid such scams, you can follow these techniques:
- Discuss with expert traders before investing.
- Check out their historical data and related other data.
- Check the LinkedIn profile of the trader.
4. Reboot Scams
The forex reboot scam is considered the newest form of scam where the major role is played by computer code or automated algorithms, which mainly act as technical signals.
To keep yourself safe from forex reboot scams, you can follow these tactics:
- Checking out these user reviews of the system.
- Making a thorough check of the optimization code & system parameters.
- Doing in-depth online research to find out detailed information.
- Asking for trials for testing purposes.
5. Account Manager Scams
Most newcomer forex traders opt for hiring an account manager to save time. But they don’t know that the fraud account managers consider them as a baby (who know nothing at all).
Before you hire a manager for your forex account, you should do the following:
- Check the background properly.
- Ask for the average return amount per month.
- Check references.
6. Point Spread Scams
The bid is meant as the buying Price, whereas the ask represents the selling price. And the spread is the difference between the bid amount and the ask amount.
The point spread scam is the type of scam in the forex industry that is done through bid & ask spread using specific computer-based codes.
To protect yourself from point-spread scams, you can take the following measures:
- Keep yourself updated with your spread.
- Analyze your trading style.
- Always choose an expert or quality broker.
7. Boiler Room Scams
Through this type of forex scam, scammers create once-in-a-lifetime or don’t-miss-out-the-deal offerings.
You may easily get caught seeing those offerings related to quick returns in a short time.
To keep yourself from Boiler Room Scams, you can follow these methods:
- Don’t respond to cold calls before verifying.
- Don’t make any urgent decisions.
- Ask for detailed information.
We create the table on a forex scammer list consisting of binary options and who have scammed those who made complaints on Broker Complaint Alert.
If you would like to report abuse by any of the brokers please click on the name of the broker in the table and you will be directed to their complaint page. There, you can fill out the form and one of our representatives will get back to you.
8. Pyramid Scheme Scams
The Pyramid Scheme Scam is a scam where the scammers promise to provide you with impossible returns. It is verily known as one of the most common types of affinity fraud.
Some common characteristics of Pyramid Scheme Scams are as follows:
- Guaranteed high returns with little-to-no risk.
- Legal paper works not provided.
- Investment strategies are not revealed.
- Very tough to get back the investment.
9. Course Scams
At this moment, you will find countless numbers of forex courses where most of which are nothing but scams.
Before you decide to attend any forex trading course, you must take the measures mentioned below:
- Discuss with people.
- Take assistance from authentic online analytical tools.
- Do an internet survey.
- Check out the social media profiles.
10. Unreliable Schemes
Some brokers may devise unreliable schemes where you will see offers like get-quick-rich in no time.
Always keep yourself safe from this type of guaranteed schemes or profits.
Research Your Brokers To Protect Against Forex Scams
Before you opt for forex trading, the first thing you have to do is research and research. Currently, you will find many forex brokers from different trading entities.
So, finding an authentic or expert one is the main challenge you will face here.
The best way to keep yourself safe and protected from brokers’ scams is to keep yourself updated with the latest trading information. Also, try to make continuous contact with the brokers in this sector because it will help you become experienced enough in this sector.
Spot These Early Signs Of Scams
To keep yourself safe from forex scams and trading scammers, it no denies that you have to study & research.
However, in the following, I will mention some of the early signs of forex scams –
- Guarantee of quick returns without any loss.
- Asking for personal details.
- Not enough credible information on the internet.
- Brokers who limit withdrawal options.
In addition, you must be aware of many other common scamming practices to make the right investment with your hard-earned money.