It is easy to get scammed as a retail Forex trader, but that does not have to happen to you.
The best silver bullet against Forex vampires is to remember that no one has anything to give away. There is no such thing as a free lunch. If someone promises you huge returns for little time and money invested, it likely is a scam. If it sounds too good to be true, it likely is.
There are many ways to scam in Forex, but some scams are more common than others. You should always watch out for these, and to give you an idea, below are the top three Forex scams you should absolutely remember.
The Bernie Madoff of retail Forex. Scammers try to convince you to invest your
You can count yourself lucky if they just take your money, invest it, and lose it. Some scammers add insult to injury by not even ever investing your money, but are running one huge Ponzi or pyramid scheme, where there is no way for the victim to ever make money, where every last cent that is not paid as fake profit to lure the next layer of suckers is spent on the scammers' luxury cars, yachts, and mansions. You will never see your original investment again, apart from a couple cents on the dollar to make you and your friends, the next prospective victims, think that the scheme is profitable.
This one should be easy to spot for you by now if you have already gone through our Forex course. The scammers will offer you get-rich-quick miracle software for sale, software that somehow beats the foreign exchange market and makes you rich.
But as you know that, you cannot have something for nothing, you will not fall for it. If the software did work as advertised, why would the scammers sell it? Why don't they use it themselves and get rich quick?
The only ones who get rich quick in this scheme are the software sellers. If they do not get caught first.
There are those that would sell you a subscription to a Forex signal service. You pay a fee per week or per month to receive signals from "expert traders." Unfortunately, most of those signals are less reliable than your broken old windup alarm clock, which is right two times a day, two times more than most such signal services.
That is little wonder, as those experts may be experts at many things, but not really at currency trading. The signals you get will be mostly useless to you. Often, you might just as well flip a coin.
But whatever way they try to con you, remember: your worst enemy is not the conman, but your own irrationality, which makes you ignore all the red flags, which tells you that you can win an infinite amount but lose only a hundred percent, and most importantly, that which convinces you that you do not need to do the necessary due diligence to succeed at something.
Always tell yourself that no one has any amount to give away, let alone an infinite one, so you can only lose everything, especially in online currency trading. And do not forget that even some Forex brokers can "scam" you completely legally.