Scams in forex trading can happen in different methods. And because of that new traders think that forex trading is a scam. When some traders lose money, they try to “blame” the forex as manipulated, scam, etc.
Most of the new traders who lose money are new in forex trading. They don’t have much knowledge of the forex market and how to avoid forex scams. In this article, we have listed some of the scams that can happen in the forex.
One of the most common methods that new traders get scammed is with forex signals. There are many forex signal providers who offer signals in exchange for money. Traders have to pay the signal provider with an amount of money that’s charged monthly.
And the reason why new traders pay for forex signals is to make money. But a majority of signal providers don’t have much success with their trades. So to make money, they sell forex signals to newbies in trading who don’t know that the signals are not profitable.
Newbies fall for the scam and lose hundreds of thousands of money with forex signals. They lose money because the forex signals are not successful to be profitable. Or there are situations where traders pay for signals but never receive the signals because they’ve been scammed.
To trade the market, you need to use a broker so you can trade. But newbies in trading who don’t have much knowledge in trading can use forex brokers that are scam brokers. As a newbie in trading, you can get scammed by a broker in different ways.
You can deposit money, but you cannot withdraw money. And some sketchy brokers ask you to deposit more money to withdraw your funds. That’s another sketchy method that scam brokers use to trap the victims.
Brokers can also lose you money with a stop loss hunt by touching your stop loss. Some brokers move the market price in a sketchy way with hundreds of pips movement in seconds by touching your stop loss. And your trade will end on a loss that will affect your account balance.
To avoid these situations with forex brokers, you need to research the broker if it has a license, reviews, reputation, etc.
Another way that traders can get scammed is with “mentors”. When you hire a forex mentor, you have paid him to improve your trading. But not all mentors are successful and they scam traders by distinguishing themselves as “successful forex mentors”.
Scammers can scam you by showing fake proofs that can make you think it will improve your trading. And if you’re a newbie in trading, you pay him because you hope he will help you become a better trader.
But instead of improving your trading, the scam mentors can run away with your money. Or he can try to mentor you, but in reality, he’s not a successful trader for himself.
This article could help you spot scams that can happen in forex trading. The forex is not a scam, but there are different ways you can get scammed in forex.
And hopefully, you learned some of the methods that you can get scammed so you can avoid these scams.