Forex Trading Scams

About Forex Trading Scams

The forex market is the most active in the world and also one of the most volatile. On the surface, forex may seem easier to understand than the stock market, but it involves complexity and risk. Forex trading is popular, but as a result, forex trading scams have emerged and have robbed consumers of millions each year. It is essential to understand that there are many forex trading scams and to find ways to spot them.

Cryptocointrace experts can provide you with assistance if you have lost money in a forex trading scam. Our team of researchers knows what to look for when investigating a crypto or forex trading scam. We can provide you with information and guidance through our intelligence reports that will help you get results. Contact our Cryptocointrace professionals today for a consultation.

What Is CFD Trading?

Forex is short for foreign exchange. It involves trading the difference between currency pairs. This may sound simple enough, but it should be borne in mind that the forex market is extremely volatile, since currencies fluctuate, and can change from moment to moment. Their value is often affected by unexpected events, such as natural disasters, political developments in countries, or other unforeseen events.

In addition, there are so many institutional investors and governments that make investments in forex that it can be difficult for smaller forex traders to predict what will happen next.

 For instance, a government may need to purchase a large amount of its own currency to battle inflation, but a small trader may not see that move coming and larger investors may have been able to spot signs that this was going to occur.

Smaller traders can make money on forex, but it often requires experience, trial and error, and a few losses before they can learn to predict where the market is heading. In contrast, many forex trading scams offer forex as an easy way to make a lot of money in a short space of time. People believe these claims and can fall for forex trading scams readily, particularly if they are desperate to make cash fast.

Why Are There so Many CFD Scams?

In addition to the risks inherent in ordinary CFD trading, there is also a plethora of CFD scams. Despite the losses many traders experience with regular CFD trading, people are still convinced by extravagant promises of guaranteed high returns. In such a risky environment, it is impossible to guarantee returns at a certain level, so this claim from the outset should be recognized as false.

There is a kind of psychology to risk that may explain the fact that CFD scams, unfortunately, flourish. Many people are hard-wired to believe that risk is inherently connected with reward. This can be true with many types of investment and trading, but often the risks can outstrip the rewards for novice investors.

Those who make a lot of money in forex or CFDs have learned through losing and are more experienced traders. Few people get it right from the outset.

However, people hear stories about those who make millions and some figure it is worth the risk, not taking into account that those millionaires experienced plenty of losses on the way before they figured out a trading method that worked for them.

Another element of risk psychology is that if people feel they may lose money anyway on a risky trading vehicle, they may be more likely to risk working with a broker who may or may not be a scam. This is why so many scam brokers work in risky areas like forex and CFDs. Also, the more money they trade, the more likely they will be in denial that the broker is a scam.

The bottom line is that scams tend to attract people who are desperate to make money quickly. They may have lost their jobs or have debts to pay. They would be better served seeking a loan or finding other solutions than trading with brokers who promise them impossible returns. In most cases, they will lose money and get into more trouble. Trading is not the same as gambling and it is important to understand the distinction.

The Problem of Forex Trading Scams

Forex trading is already filled with risks, given the volatility of the market, the unseen variables that can affect the value of currencies, the role of large investors, and the need for experience to actually understand what direction the market is likely to go in the short and long term.

Added to this complexity is a large number of forex trading scams. These scams target novices who have no experience in forex trading and try to persuade them that forex is not a difficult thing to trade and they can make a lot of money at it without much experience. Those who actually trade forex understand that the opposite is true–forex is a high-risk trading vehicle that requires experience and there are no guarantees.

Despite the reality of forex trading, these frauds increase in number every year, despite the efforts of many governments around the world to regulate them. The number of forex scams can cause people to associate “forex” with “scam.” However, there is no reason traders can’t partake in secure, legitimate forex trading. It is important to understand how to distinguish a scam from real trading.

Types of Forex Trading Scams

There are as many types of forex trading scams as there are legitimate trading options. Staying alert for the types of scams can help you avoid them when you are looking for ways to trade forex. Some of the most common types of forex trading scams include:
  • Scam Bots
  • Signal Seller Scams
  • Fake Forex Brokers

Bot trading is popular because the forex market moves so quickly. A trader can go to bed one night only to discover that they have lost their investment by the morning. Trading bots are designed to make automated trades when the currency pairs reach certain levels. These are useful, but are only as good as the creator of the bots and still require some human input at regular intervals.

Scam bots, as expected, are fake versions of forex trading bots. They may simply be defective or designed to rob you of your money or data by retrieving your personal information. Be careful where you purchase these trading bots because many are scams.

Signal seller frauds take advantage of the difficulty of forex trading and are disguised as resources to help traders. Many frauds target new traders who are trying to figure out the market. These scams pretend to be trading advisors or coaches who can tell novice traders the best time to buy or sell currency pairs. They may ask for subscriptions and encourage traders to pay for many months of service in advance. They will either give phony advice or disappear with the money.

The difficulty with calling out signal seller scams is they can simply represent themselves as having made errors predicting the market rather than intentionally defrauding traders. However, experts, like Cryptocointrace, can investigate and determine whether these “coaches” are frauds or just provide low-quality service.

Finally, the largest category of forex trading scams includes fake forex brokers. The following are signs that the broker you are working with is scamming you:

  • Not regulated
  • Pressures making trades without explaining them
  • Fake contact information
  • Keeps asking for more deposits even after losses
  • Adds fees that have not been outlined beforehand
  • Will not answer your messages
  • Refuses to allow you to withdraw funds
If you see any of these signs, contact Cryptocointrace right away so we can investigate this broker.

If You Have Lost Money in a Forex Trading Scam, Talk to Cryptocointrace Professionals!

If you need assistance after losing money to a forex trading scam, talk to Cryptocointrace today. Our team has the expertise and knowledge as well as tools to perform in-depth research. We are skilled at investigating all types of scams and have extensive experience in the financial industry. We will help you get results for your claim and resolve your complaint or dispute.

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