Forex scam come in various forms, and can happen to anybody. When it comes to scam itself, it is important to note that it always changes, evolves. In the old days, when Forex markets were more “exclusive”, Forex scam was relatively straightforward and not nearly as common as in recent past. However, after the internet revolutionized the way financial trades are done, the number of scams and their variety has exploded. It is vital to familiarize with as many types of scams as possible to keep up, as the crooks will always be one step ahead.
Good old-fashioned rip-off Forex scam
Back in the day, people would fix the spreads between bid and ask prices and rig the market. You see, brokers rarely offer a small spread unless they have to. They feel comfortable if the spread is seven pips or more, even if five or six would still bring them a hefty commission. But if you add four or five pips more than you absolutely need to, most of the profits (if not all of them) will turn into commission for the broker, even if the investment was on the money. This type of Forex scam has subsided over the years, but some unregulated brokers still overcharge for their services. These are relatively easy to spot, as their spreads will differ greatly from the other brokers. If confronted with this fact, they tend to pack up and disappear, along with any money you left them.
Fake trading signals
Despite the popular belief, trading signals can be quite useful, as long as they are legit. But if they are not, they might be tricky to sell. This is where false advertising comes into play. Depending on the scam, this could be quite effective, due to realistic “testimonies”, “success stories” and the fact that some even offer a good trade every now and then to fool people even further. At one point, they will simply disappear along with the money.
There is a lot to be said for people who let machines make decisions in their stead. So far, despite promises and guarantees, there hasn’t been a single Forex robot that actually lived up to its “potential”. At best, it will generate random trades and squander your money. At worst, the trades won’t be random at all. There is no way for you to know what it was programmed to do.
Embezzlement – everyone’s favorite
The most straightforward Forex scam there is, when your broker simply steals your money little by little. At one point the numbers no longer add up, and you realize someone has been skimming the profit the entire time. This is not really a scam, more of a theft really, but it usually goes undetected if the broker mixes up the accounts to muddy the water and conceal actual financial performance.
All Forex scam, no matter how convoluted, are about your money. The only way to be safe is to always have unrestricted access to it: you and you alone. For support and useful articles, review, check out www.forexfraud.com.