As the largest and the most liquid market, Forex is a stage where billions of transactions happen in a single day. The development of digital platforms has made everything easier and people have access to different tools provided by their brokers. Besides the good side of this dramatic boom of the industry, it also creates some weaknesses in terms of security. The increasing number of activities makes traders vulnerable to malicious actions called Forex scams.
The strongest feature of Forex scams is that it aims at the optimism and fears of the investors. Many Forex scammers know that they will ensnare traders if they promise something useful for these people. In that manner, traders’ lack of knowledge is the pillar of a well-conducted scam. Therefore, we first have to discuss how to detect different types of Forex scams before the protection methods.
The first type of scam includes custom-made Forex trading robots to their customers. However, the features of these algorithms may be misrepresented by the brokers in order to increase the number of sales. If you do not know so much about the technical indicators of a Forex robot and cannot test the success rate, then you become an easy target for Forex scammers. To not get scammed by the brokers, you can check what the robot is built upon. If the model takes Expert Advisors as a base and is recommended by other traders, you can trust it and consider getting one.
Signal sellers are another type of Forex scam generators. What they do in the core is to share their trade ideas about currency pair, prices, trends, and so on. But, they provide this service only if you accept to work with a declared broker. When you start to trade on the broker’s platform, the signal seller gets a commission from the broker. After that, the only thing that matters for the signal seller would be whether you are trading or not regardless of your profit or loss. In that way, you cannot get the service that you have expected and may end up with huge losses.
There are lots of other methods practiced by scammers, but these two are the most common ones. The most important step to avoid scams should be improving traders’ knowledge by removing the asymmetry of information. If there is an app or platform which demonstrates the reliability of the brokers and complaints about them, traders can check it out and see which brokers are trying to scam their customers. This will result in the fall of unassured businesses and a safer market for everyone.
