The Foreign exchange market (FOREX) has become a great way to manage your money and earn more over the years. It is a decentralized and global market, which means that you can trade all the currencies around the world.
In this market you will find people that have experience on it (professionals in FOREX trading or in any other kind of trading); and, obviously, people that have no clue of what they are doing.
Now, this world is no stranger to scams and schemes to make money by dishonest means.
In the world of FOREX trading you are going to find some scams, but you need to be aware of it. You can get scammed if you do not see the signs.
Now, we are going to see the worst FOREX scams that can be used to take out your money and we will give a quick look to a few scam brokers for you to be aware.
- Spread Manipulation.
How does this famous trick work? Well, FOREX charge you through the difference in bidding and asking prices. That way, you don’t need to worry about factoring in commissions or directly canceling their services.
Sounds fair enough, doesn’t it?
But, where is the trap? This is what happens.
Spreads are meaningfully wider than the industry average and the money they allocate you is not real at all. The thing is that the spread is one of the biggest impediments for you to make money as a trader.
A spread is the difference in pips between the BID price and the ask price quote (also called buy/sell) in a currency pair like the USD/EUR in the FOREX trade. As wider your spread is, the less likely will be your success in the long term, and the people that offer you the program know all about this.
- Shady brokers.
This model is essentially out-and-out robbery. And this is how it works.
First of all it starts with an unregulated broker, and then it offers you large incentives to recruit affiliates who then will be able to bring the clients.
Then once the broker has a few million dollars in funds, they empty the accounts and transfer all the money to an anonymous tax harbor and shut the doors.
- The most commercial EA’S
This is how this one works:
- People develop a simple automated strategy that is able to trade a lot with a high percentage win rate.
- Then, they run it through a dozen accounts using a variety of settings.
- After a few months, maybe three, pick the best track records and publish to Myfxbook.
- After that, they proceed to develop a sales page giving details of how professional that strategy is.
- Finally, buy an email list, contact affiliates offering a 50% commission on every sale, then they launch.
At the end, this always fails, and then they lock the doors and leave.
- GREG SECKER.
This is a person you should never trust; this guy is the most successful in the world of FOREX trading, he always win and he makes you think you can be like him.
He offers you a bunch of “tactics” that are so good for the clients that they don’t even know that they are getting scammed. You have to pay about $20 to $25k, to learn things you can find in the internet for free.
After that, he is going to tell you to open and fund an account at a brokerage owned by him, where he earns income directly from clients’ loses.
Those were a few of the worst FOREX scams; this is why you need to be careful. Know it is necessary to show you a few of the worst scam brokers you will find in the FOREX trading.
- UFX Market: this is one of the most unethical practices categories. This company has posted fake reviews of fake clients, just to have good reviews.
- TRADORAX: this one has gone out of business because of its frauds. This broker used to freeze accounts and block the users from withdrawing all their funds. The company makes deals without permission from its users.
- HFX: It’s a case of confirmed scam and the FOREX peace army has declared it as a risk. It’s an unauthorized firm. HFX’s platform uses the funds from the clients’ accounts to make trades without their permissions.
- fm: the platform of this broker is used to steal the money out of its clients and, of course, blocking withdrawals. They also don’t answer the emails.
You need to take care of all of these things, remember you are putting and investing your money on it, and you don’t want to lose it.
References:
- https://www.investopedia.com/articles/forex/09/spot-a-forex-scam.asp
- http://www.forexpeacearmy.com/forex-reviews/5004/ufx-forex-brokers
