As of April 2021, the daily forex volume was nearly $6.6 trillion, which also includes future contracts and currency options. With this vast amount of money floating around the forex market, it is normal that some people will look for a loophole to earn money in a small amount of time. As a result, they start forex trading scams through deception.
However, the advancement of technology may reduce the scam opportunity, but scammers also act smart to survive. Hence, any trader can be a victim if they don't remain alert. In this context, checking the forex scam brokers list can help you to stay away from scammers.
What Are Forex Trading Scams?
Retail forex trading has started in the late 1990s. And it took several years for the traders to understand forex trading during that time. At the same time, some people also work on finding the dodge and earn money overnight without investment. This is when forex scamming started. Most of the scam was done by the brokers.
Nevertheless, regulations have not been in most of the countries initially. So, the scam brokers took the opportunity and started scamming innocent traders from non-regulated countries. While some scammers were located in the USA, a majority seemed to initiate the operation from overseas.
Besides, some investors also found ways to scam. Scam traders seem to underestimate the risk and tend to execute unnecessary trades to generate commissions ridiculously. On the other hand, some brokers overestimate the investors' ability to make quick money via forex trading. Those brokers typically target novice traders or investors who have no idea or even relatively less idea about forex.
So, it can be said that both brokers and traders can be scammers. This article will discuss precisely the forex trading scams and how to avoid the scams.
Scammers in the Forex Market: What Are They Doing?
Scammers in the forex market always look to cheat on the traders and lure them into grabbing some quick money. Normally, scammers come up with some lucrative offerings for the traders and attract them to invest a hefty amount of investment at a time. Sometimes, brokers do the tricks by returning some profit to the traders. As a result, investors were tempted to invest more money the next time, and they got scammed.
Currency trading fraud became common in 2008, which forced the countries to form strict regulations to stop the scammers. However, scammers are still out there in the market and change tricks from time to time. Therefore, it becomes necessary to verify the brokers with the forex scam brokers list.
Types of Forex Trading Scams
Whenever a scammer is caught red-handed, it finds a new way to continue its scam. Therefore, the scammer brought out numerous ways to scam the traders. However, among all, we have found three types of scams that are most common.
Scam Through Signals
Forex signal sellers usually do the scams via providing signals to the traders. The signals include currency pairs, entry price, target levels, direction, stop loss, and more. So, the signal sellers do their fraudulent activities in different ways.
Usually, the signal provider takes some fees from the prospective traders. But, some signal provider charges ridiculous fees to provide the signals. So, high subscription fees may indicate that you are going to be scammed if the signal provider is not verified by the broker and if the broker is not regulated.
Furthermore, some signal sellers may provide you signals if you register with a specific broker. In that case, if the broker is unregulated, you might have a significant risk. Sometimes, signal sellers don't have proof about their high percentage return. So, if the provider is unable to show his trading returns, that provider should be a red flag for you.
Forex robots are usually a specialized trading program that uses different algorithms or an array of computer codes to open or close trades automatically. While the forex robots help the traders via different Expert Advisors, some robots may involve in forex trading scams.
In most cases, robots are accountable for sending numerous marketing messages. But, getting unrealistic marketing messages can be suspicious. Some robots may also promise absurd amounts of growth returns, which is unusual. This may seem lucrative, but the forex trading market is highly uncertain. Therefore, no one can guarantee steady growth.
Many forex robots offer scalping strategies, which can generate a little number of profits. With the market's movement, the scalping strategies should see a move too. Thus, the undiversified strategies for scalping may identify as spam robots.
Scams via Multi-Level Marketing
Multi-level marketing, or MLM, is a widely known model, which actually circulates the money from one user to another. Some forex brokers may require their members to pay a fee every month in exchange for supplying daily trade signals and sometimes forex education materials. Further, the members are instructed to get more people to earn more money. Moreover, it becomes a continuous process and becomes hard to come out of the loophole. These kinds of brokers offer fewer incentives on trading and focus on recruiting more traders through the other registered members.
Forex Scam Brokers
Forex brokers are the main part of retail forex trading. You can never initiate trading without a broker. Therefore, traders tend to rely on brokers blindly. Unfortunately, not all brokers are legit and honest. Some brokers may look for a way to snatch your money systematically for no reason. These types of brokers are usually unregulated. In case you got scammed by those types of brokers, you may not seek legal action.
How to Identify Forex Trading Scams?
At Top forex brokers reviews have mentioned that scammers are tricky when it comes to forex trading scams. So, there is no alternative to knowing them early. You may check out the following strategies to identify the forex scam brokers list.
No one can guarantee an earning from forex trading as the market is uncertain. There are many factors that can affect the forex market. So, if a broker offers a guaranteed earning, it is safe to assume that the broker is definitely touting a scam.
No History of the Background
Scammers tend to show off their profitability through some pictures of some accounts that have earned a good amount of profit. But, in reality, those pictures may not be real as the scammers cannot show any proof of those images. Apparently, they don't have any practical trading experience. Thus, if you find a broker or a person without any prior history, you should ignore that.
Persistent and unsolicited marketing is a sign of deceiving behavior. Furthermore, if you discover yourself in a situation that you are being pushed to buy a new product or forced to do trading, it is probably an attempt to scam you.
Feedbacks of Traders Union's Participants on Scam Brokers
Traders Union consists of thousands of traders from different parts of the world. The union members usually share relevant information among the traders. Furthermore, they provide honest information on different brokers, including the forex scam brokers list.
The feedback from the unions adds value while taking the decision about trading and sorting out the scam brokers. In most cases, the Traders Union saves a trader from stumbling into a broker.
What is a blacklist of Forex scam brokers?
The blacklist of the forex scam brokers is usually an anti-rating system that identifies the brokers' activities that seemed to be a fraud. Whenever a broker offers an unusual profit margin in forex as well as different schemes, it eventually goes to blacklist. Besides, the unregulated forex brokers fall On the blacklist automatically.
What are the risks when working with brokers from blacklists?
A broker is blacklisted does not mean that you are not eligible to trade with that specific broker. But you will need to proceed with cautions as blacklisted-brokers have some risks too. The risk may include transaction interruption, account freeze, setting the account, and more. Besides, scammers do not return any deposited money or do not let you draw the profit at all.
So, it is a good idea to know the blacklisted brokers prior to registering with a broker and avoid them.
Forex trading scams can cause you a great loss, especially if you have an enormous investment. Hence, trading with the right broker and platform is needed. Before choosing the best forex broker, you should know how to avoid forex scams, and the guideline we have mentioned above will certainly help you.
Best Forex Brokers By Countries List
Top Rated Online Best Forex Brokers 2021