Spotting a Scam Forex System
The forex market is the largest financial market in the world and this attracts investors, traders and scam artists. When you start trading on this market you have to be aware of the scam forex systems out there. If you are not then you could potentially be trapped and end up losing the money you were hoping to trade with.
The Original Scam Forex System
For many years the prevailing scam forex system was the computer manipulation of spreads. The scam had certain brokers offering widely different spreads than other brokers. These scam systems would have spreads of 7 pips instead of 4 pips. While this might not seem like a big money making scam, making an additional 3 pips on a market that trades close to $5 trillion dollars a day really adds up.
However, this scam is actually not found as frequently anymore. This is due to the regulations in place in certain countries. The regulations stop this from happening, but in loosely regulated countries brokers do still apply this scam. To identify this scam you simply have to be aware of the spreads you are being offered and how they compete with other brokers.
Scams with Signals
The more popular scam today is the selling of fraudulent signal services. Signal systems are a service which offers you entry and exit points to trade on so you do not have to complete market analysis yourself. These systems often state that they have many years experience on the market and how successful they can make you. With this scam all the unsuspecting trader has to do is pay for the use of the signal service. The cost of these services varies from relatively cheap to very expensive.
There are two things that can happen after the trader has paid for the service. The first and most common is that once a certain number of traders have bought the scammer disappears with the money. The second outcome is that the scammer sometimes offers some good signals so the trader continues to pay for the service.
The main problem with this cam is that there are a lot of honest signal services. However, it is hard to differentiate the honest ones from the fraudulent ones. You may have to rely on information from other traders and hope that they are giving you the correct information.
Scam Forex Robots
A lot of traders look at the forex robot as a way to trade on the market. With these robots the trader simply has to input their settings and the system trades automatically for them. While the idea is wonderful it is very easy for scammers to develop a robot, sell it and then disappear with the money. The best way to avoid this scam is to take a good look at the information given about the robot. You have to look at the testing parameters and the optimisation code. Of these parameters are invalid then the system will not work properly and could be a scam. You should also find out what other people who have used the system have to say.