For some reason, humans seem hardwired to look out for the quickest and shortest routes to financial freedom. It’s for this reason that financial products are often targeted by scammers and con artists looking for a quick buck. This is especially true in the forex markets so keep an eye out for any of these signs of a potential forex market scam:
An easy way to get conned in the markets is to trade with a broker that doesn’t have your best interests at heart. Unfortunately, there are many bucket shops in the forex industry which look like legitimate services but will nonetheless trade against you, taking the other side of the bet and manipulating spreads to your disadvantage.
No-one ever said forex was easy but that doesn’t mean you should pretend to be an expert when you’re not. Many forex traders will blog about a certain trade but when it loses they often remove the post. Likewise, there are traders on twitter who post hundreds of trades then delete the losing ones, making them look better than they really are. Watch out for them by being extra skeptical and keeping a track of experts trades for a while.
Using sex to sell
It seems humans are ridiculously easy to trick when it comes to money and the same can be said about sex. One of the oldest tricks in the book is to use the picture of a pretty young woman to entice an unsuspecting customer into buying a useless product. You’d have thought we’d have learnt by now but many of us haven’t.
Holy Grail systems
Another sure sign of a scam is when an expert promotes a system, bot, or expert advisor that promises untold profits. Often, the system will have made hundreds even thousands of percent over a certain time period – and with less than a 10% or 20% drawdown. The implication is that you can use the system to turn a few thousand dollars into millions in a couple of years.
Then they go and sell the system for just a couple of hundred bucks. Doesn’t make any sense does it?
The paid pessimist
While most forex scams try to make you believe you can make a shed load of money, there are actually some scammers who try the opposite approach.
These highly original folk prefer to tell you that it’s impossible to make money in the markets – and if you buy their book they will tell you why. Or, they shout from the roof tops that the market is about to crash and the world is about to end, creating notoriety and page views from their controversy.