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El Mehdi Laaroussi – Financial Market Junky
financialmarketjunky.blogspot.com
How You Can Identify Forex Scams!
Out of all the markets, Forex is particularly filled with scams of all types.
There are a lot of scams and nonsense circulating out there. Which makes it a real
minefield for every new comer. The Forex market is teeming with people that are
waiting for you to take the bait and trust them so they can siphon your wallet and
profit from you as best they could. This is why, today, we are going to see exactly
how you can identify Forex scams and what alternatives there are for you to have
a safe and smooth trading.
To learn how to effectively spot a Forex scam every time, we must first
know what are the vulnerabilities on which those scammers prey in order to take
our money.

So, it starts from within!
The Forex market is, by far, the world’s largest trading market. It dwarfs
all the other markets with a daily turnover of $6.6 trillion in 2020 (source:
asianbankingandfinance.net). Prices can move a lot during any day. Which
represents a very high earning potential for anyone willing to jump on the price
and move with it.
Adding this to factors like the ease of use and access to trading services and
transactions you get the perfect combination for your financial demise!
This is exactly what Forex scammers want. They want to be able to reach
you, that you’d be able to trade and put your money with them easily and that
you’d be seduced with the incredible amounts of money you can make by using
their “secret strategy” or choosing them to manage your account.
The majority of people fall for it. Anyone can be a victim of a scam. The
outcome bias is inherited within us and can make us blind to the risk that could
be incurred.
This is why you need to first acknowledge this fact, be at peace with it and
learn how to tame it. Nothing is for free in this world. As there’s a high reward,
there’s a high risk as well.
However, even with you being aware and reasonable about your financial
decision. There are still a million ways scammers can get to you. So, you need to
be able to identify them on the spot!
Which leads us to our next point.
Forex scam types:
The list that I’m going to present to you includes some of the practices that
have been involved in fraud cases and that I’ve experienced for myself.
The signal provider scam.
A company, or a person, is selling “buy” and “sell” signals, claiming that
they based their analysis on proven methods and that they can guarantee to make
you money.
If you’re willing to consult the services of a signal provider, don’t trust
them easily!
Look for signs that will show you if they are legit or not. They should
provide extensive data about current open positions, balance, equity, history,

profits, losses and deposits. Moreover, even if they present you with this
information, in the form of backtests or monthly stats of pips, it should still be
verified by a third-party. Which is a company that provides reliable verification
services. There are a ton of them out there. The best examples I can give you are
MyFxBook and ForexPeaceArmy.
On top of that, if the signal seller does not offer a trial period and a money-
back guarantee, or if they use unusual and shady payment methods, you should
not even consider the thought of putting your money at risk with them!
Forex robots’ scams:
You’ve just got into the forex market. After banging your head on the wall
for days and weeks without having anything to show for, you find a sweet, sweet
discovery. A trading robot! A software promising gains without the hassle of
effort and knowledge.
Gone are the days when you had to sit through countless hours of
researching, testing and backtesting strategies in the hopes of making money in
this unforgiving market. Just lay down on your back, relax and let the robot do all
the work and make all the money.
Well, as the saying goes:
If it’s too good to be true, it probably is
Even if we assume that the software is genuine and was professionally
developed, which in most cases isn’t, still no robot can adapt to different
conditions of the market. Human intervention is always needed.
When traders use software, they don’t rely on it completely. They test it
and use it only to analyze past price performance.
So, be very careful when trading using somebody’s software or robot. And
don’t trust reviews. They can be paid for.
Managed accounts scams:
This happens when someone or some company offers to invest your money
for you and manage it as will. So, it goes like this. You give them your money.
They trade for you and they claim they are good at it. They make a profit. Take
their fee or commission, which is, usually, a small percentage. Then you get the
rest of the profits.

First, you trust them. They take your money and show you some returns.
This way you’ll be willing to leave your capital with them for longer, if not invest
more.
However, when the day comes where you want to get your money back,
that’s when the problems start to show up. They can use any mean they have to
not give you back your investment, including ghosting you or using a contract
clause you signed on without even paying attention to it.
Be very cautious about giving your money, because it’s always harder to
get it back.
Repainting indicators:
For traders that use indicators in their trading, it is crucial to be absolutely
sure that those indicators do not repaint.
What’s a repainting indicator you say?
Well, to explain what an indicator that repaints is, we will compare two
types of indicators:
Non-repainting indicators: Their values, once registered, do not change.
They use the close price of each price bar to calculate the values it will
show you on the monitor. These values should be fixed and not change
by the passage to the next bar. This way you are sure that any information
the indicator gives you is something that you can rely on in your analysis
and that it will not change if you leave and come back an hour, a day or
a week later.
Repainting indicators: They rely on the current price of the currency pair
to constantly recalculate their values. Each time the price changes, these
indicators include this change in the values already shown on the charts.
Which leads to them always changing too. This why they look so good
in publicity. Whenever you use them, they will show good signals. But
once you start trading with them, you will start noticing that signals that
they gave you an hour ago are no longer there.
That’s why, they are basically useless. So, don’t put your money on them.
To be honest, I don’t believe that you should ever buy an indicator. There
are over 10,000 of them out there and a few of them are really good indicators.
You just need to find those few that will give the best results without having to
pay anything what so ever!

How to avoid Forex scams?
When you search about trading in general, there’s a sentence that you keep
reading in every website, every document and every book you come across.
“Trading carries a lot of risk”
Which means that you need to really take your time and think about any
offer you receive or decision you make.
Before committing with a broker, you can see if they are not on the Broker
Black List or the Forex broker scam list.
Try to verify their regulatory status. Unregulated Forex brokerages are
risky places for traders to deposit funds, and traders who do so are likely to find
they have no effective remedy to counter losses caused by dishonesty or
incompetence.
Ask yourself all the questions you don’t want to think of while fantasizing
of your future financial gains. How binding is the contract between you and the
broker? How easy is it to reach customer service? Do they list a physical address?
Do they use actual names? Are they a registered company? Can they provide a
verified performance history?
And most important of all, keep away from opportunities that are too good
to be true!
Did you like reading about this topic? Then you’ll love discovering more
posts about:
The 5 Best Trading Blogs
How to Make Money Online
If you’re a beginner trader, start by taking the confusion out of your
learning process. Read about:
How to start trading Forex
Trading 101 series

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How to identify forex scams

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