On the following post you will discover the major Forex Scams and how to avoid them. I know it’s a long post, but reading it to the end will save you thousands of dollars!
Being there for four years now and I’ve seen the up and downs.
You might think I mean the unexpected markets moves but I am not at all talking about trading and the markets. I am happy with the way I trade. I am happy with the market timings and I am also very happy with my own trade timings. Then what is it that makes me a critic to my own forex markets?
Guys, its not the market, it’s the network of some people and some companies that I am against. I am talking about this network of crooks that’ve left no stone unturned to make this simple market, a Loser’s game. It’s only with the experience that a person learns how it’s actually these buggers, not the markets who eat your money and to start with, my first target is the fake brokers.
Since most of people depend on opening accounts and trading only online, they cannot verify the physical existence of these brokers. Although there are ways to find a broker’s background but as it goes, a new trader always wants to join the markets in a rush, so he forgets to do the cross-checking on the broker. He trades alright, he made profits alright but when it comes to withdrawals, he learns that the broker was fake. The broker doesn’t exist, WHAT DO YOU DO? There’s no response to your repeated emails, there’s no one to answer your phone calls and how frustrated you feel when you learn that you are not going to get back even your own initial deposits, leave aside the profits you made. Where do you go for justice?
It might come as a shock to you but the fact is that more than 70% of the brokers you find online do not exist in real. It’s just a website that they run and a lot of people fall prey to these scamsters. This also is unfortunate that regulatory authorities also do not run any campaigns to create awareness among new-comers in forex, so a beginner will never know that he is being taken for a ride, all because the broker’s website with those fake testimonials looked so fancy. I know it’s not your fault but why would you ever need to sign up with a broker who does not have any office address on his website? Why would you ever want to trade with a broker with zero spreads when you know that to survive and meet their office expenses, they must charge you spreads.
Now, let’s cover the rest 30% brokers. While I have no doubts that some of them are genuine including my own broker XM but I can tell about the rest how they also dupe their traders. To start with, they will give you a fill on your position, at a price different from the market price. It will always tilt towards them. Since after taking your position, your first reaction always is to quickly check your charts and the movements so, you never realize that the broker cheated you on your entry price. The same unethical act is repeated by the broker when you close your position. You never come to know about this cheating as you are focused only on calculating your profits and losses and looking at the charts.
They cheat you again when you set prefixed orders. So if the market goes there and you are not logged in, they will not give you an entry, hence denying you the profits you would have otherwise made on this trade. Similarly, when you set stop-loss and the market goes near to it, they close your position in a loss even if the market never reached your stop- loss. You of course don’t have much time to fight them on each trade as they are remotely located and they don’t have ears.
Of course, if in spite of all their tricks, you manage to make profits, then they always have this facility with them to freeze your platform so you can’t login or can’t take positions. You call them re-quotes. You can only keep trying to take a position but for how long can you fight their tricks?
In case, you don’t fall a prey to the brokers, there is a strong possibility that you fall victim to a fake signal provider. These people run their websites claiming good signals, this and that but when you subscribe to them after paying a hefty fee, you find that their performance is not at all close to what had been advertised on their website. What do you do? Lose money, simple. Straight people like you and me can’t go and grab them with their collars to set them right. Not on the date at least but I would really like to see the day when the regulatory bodies made it compulsory for every signal seller to be registered and answerable. If they also gave us a right to kill, nothing like it.
You might even feel tempted at times to try out these so called ‘profitable system sellers’ and ‘Trading robot sellers’. Of course, they will have their tailored statements to prove that their robot makes over 200% returns everyday. There will also be tons of fake testimonials to prove their credential. A lot of gullible people fall prey to these scamster and buy their robots to trade their accounts only to realize that the robot has no real logic in its trading. Is the result not obvious? Where do you go to fight them when you know that there is no contact information? Keep sending your refund requests till you are exhausted but you don’t get the refund. What do you do? Find another scammer with another robot thinking that this one might be different? And after that, another one?
Last but not the least, you find tons of ‘Money Mangers/ Fund managers’ and bla bla promising returns over 50% to 500% a month, With guarantees, of course. You feed them with your hard-earned savings in the morning and you get a call-back from them in the evening with a demand for more money from you as the market suddenly went into some’ Self-correction mode’ , hence blowing all your money to the full.
Even that does not happen sometimes. You never get any call back or something. You sit relaxed at home that you made such a wise investment. You wish you had known that ‘Amazing scheme’ earlier and you could have been so rich by now. LOL! You might even start dreaming of setting up a business around this scheme where you can raise some money from all your friends and relatives, put all that money with this ‘Scheme’ and then it will all be so easy. You withdraw your profits end of the month, give your entire friend and relatives a share and you keep the rest. You get money, you get free popularity too. Without work, Wow!
You can retire from job before time; spend your time in a Las Vegas Casino or a Horse-racing ground. Isn’t that what you deserve? Who wants to go to an office anyways? So much you hated your boss you remember, this is the time you give it back to him. You have finally found the GOLD MINE.
I can tell you that you got to be really lucky to find that this ‘Awesome Company’ with that ‘Amazing scheme’ HAS NOT disappeared overnight. In my trading career, I have seen hundreds of these companies come up online, collect public fund in the name of some or the other lucrative scheme and disappear as soon as they ‘reach their targets’. Who cares it was your retirement money or were you saving it for your daughter’s wedding? Don’t cry if you lost $10K, the other investor lost 100K.
But then, I don’t blame these people as much as I blame you for trusting them. Internet is very much like our own real world where you find good people as well as bad. It will only be your greed or your impatience to drive you to the bad ones. Don’t complain that you weren’t warned. Control your greed; you just need a little bit of extra money, so invest only with the reputed leaders like XM or AVATRADE. You got to know that to survive, you can do with less profit also but if you lose all your money, you can’t exist.
Having mentioned these points, I will state that by taking a few precautions, you can avoid these losses. While choosing your broker, make sure that the broker is registered with the financial regulatory authority of its country. For U.S., its CFTC, for UK, it is FSA. These bodies have the role of controlling these brokers and attend to you if you were to ever file a complaint against any injustice done to you by your broker. The brokers are answerable to the regulatory authorities or they stand a risk to lose their license to operate.
Similarly, don’t look for broker with minimum spread, look for quality rather. A cheap broker is just like a Chinese mobile phone that comes at a less price but has no life in the end. Remember that a broker must charge you good spread and even commissions if they were to ethically run their businesses and pay all their employees, their salaries. Remember, they have to also bear their office expenses.
Second point, a clear NO-NO to a ‘$97’ automated robot. Please remember that if a robot could really earn the kind of profits that they’ve displayed, then they wouldn’t sell that robot for that low-a- price. Remember that there are no robots and if there are some, they are owned by the multinational banks which they purchased with millions of dollars from the developer of it. Similarly, even their best and million-dollar robots make nothing more than 2% a month, so don’t be tempted to buy these street-side robots that claim 200% a month. Its all fake, even common sense can tell you that.
Choose a signal provider carefully. Don’t fall victim to a nice-looking website. Your concern is the signals you get and how profitable they are, not how colorful the website is and how nice that website babe is. Verify their statements before bestowing your faith on them. Don’t find a remote based some-‘Cyprus’ or ‘Panama -City’ signal provider who you don’t even have any access to. Find a provider in the nearby locality so that if things go wrong, you can at-least kick his ass.
Again, no investments in any lucrative schemes with over 100% returns a month. These are started by either ‘highly experienced’ Scamster or by some new-born babies of forex who, after a brief profitable stint in forex, start thinking that they have won the markets ‘forever’ and they can make that kind of profits everyday. So they start schemes without realizing that trading with public-funds requires a different psychology and a different-level experience. It’s only after losing that money that they realize that they had acted sooner than time and they now owe a lot to people. They have no other way than disappearing for the moment till people forget.
Raising public funds in the name of trading and disappearing thereafter soon becomes a habit for them and thus are born the ‘Experienced professionals’.
If you read all this carefully and give it a thought, it can save you some three years of failures and probably thousands of dollars as well. There could also be times when you might feel tempted to start a fake website of your own. Its easy money alright but remember, it comes at the cost of your peace of mind. There is no way a person gets away with a crime as the world is run not by these forex crooks but by the God who has very cleverly set the norms to life. Don’t mess with the rules, you live your life easy, simple! Test the rules, invite trouble. You don’t want that, do you? Let all the problems go to these crooks, you sleep easy, and that is Justice.