Many forex traders in the past have fallen victim to various forex trading scam platforms disguised as forex brokers and claiming to provide an excellent trading platform for traders. Some traders who trusted these scammers have mistakenly deposited funds with them for trading but found it difficult to withdraw both their capital and profits after trading.
Another prevalent scam that many forex traders have been victims of in times past is losing their trading accounts to online scammers who claim to be fund managers and requesting for the trader’s trading account details and password to manage their account on his behalf. These set of scammers often found ways of changing the trader’s login details after they have persuaded him to give them the email address also with which the account has been registered. Once the login details have been changed, they proceed to withdraw the trader’s funds from the platform using decentralized means such as cryptocurrency withdrawals. This work will help you learn about the safe brokers to trade with and avoid various forex trading scams.
What is a forex trading scam?
Forex trading scam refers to those fraudulent dealings designed to dispossess the trader of his capital. This could be from online fraudsters or unregulated forex brokers. We have therefore highlighted these major scams in the paragraph below.
What are the common forex trading scams today?
- Deposit bonus and promotional bonuses: Some brokers today are known to offer their client a 100% deposit bonus for each new deposit made. This deposit bonus is meant to entice clients to deposit more to get a larger bonus. On the contrary, these bonuses are hardly withdrawable. The terms and conditions attached for claiming them are so unrealistic that some clients end up blowing up their accounts in the quest to complete the required lotsize to claim the bonus. Many traders today have lost their funds in the quest to fulfill the required conditions for withdrawing such bonuses.
- Liquidation Scam: Many desk dealing brokers with no segregated bank account for trader’s capital are guilty of targeting the client’s capital. Here they always wish the client would lose whatever fund he deposited with them. Thus, they take the opposite position of all the client’s trades.
- Personal Data disclosure scam: Some brokers today are guilty of sharing the client’s details submitted during the registration process with other websites that use it in running their promotional ads.
- Trade manipulation scam: Some desk dealing brokers are guilty of manipulating the trader’s position to their favor. Some target the traders’ pending stop-loss used in protecting their positions in the market. Often they manipulate the market to hit the trader’s stop-loss easily.
- High Leverage Scam: Some brokers reduce the trader’s equity by charging them higher leverage for trading. This increases the chances of traders losing their positions in the market in cases of high market volatility.
- Robot trading Scam: Many forex traders tend to scam others by claiming to have developed an efficient robot for trading; with high accuracy which they sell at high prices to beginners. Very often some of these robots end up blowing up the client’s account.
- Account management Scam: Some self-acclaimed professional traders try to gain access to other trader’s accounts by claiming to be account managers. Often they request the client’s account details and password to trade for them but end up withdrawing the funds in those accounts.
How to avoid various forex trading scams
- Ensure to trade with only regulated brokers.
- Avoid brokers with a track record of manipulating the trader’s positions.
- Do not offer your account to a stranger for account management