Every year some unfortunate Forex & Bitcoin trader falls victim to professional scam artists and lose their money, these criminals saturate the world of online trading which trades over $5 trillion each day, we hope you find this article useful.
How to Spot a Scam
The type of scams in the Forex and Cryptocurrency market can take many forms, but it is well known that professional scammers target beginners and uneducated traders who are unaware of the tricks that scam artists use.
Red Flags
A trader should notice the red flags when a scammer contacts them or posts on a social media channel or forum, these red flags are usually where they promise very high returns with little risk, also, when they state the system is 100% guaranteed. If there were such systems out there in the markets that print money, you need to ask yourself, "why would they want to sell them".
If something sounds too good to be true, it probably is.
Why Traders Fall Victim to Scammers?
Many traders start out dreaming of getting rich quick with little or no effort in the financial markets or jumping on the Cryptocurrency wave, this dream is what the scam artists use to steal their money, by offering big profits for no effort to get rich fast. We all have that same dream like winning the lottery and this is what the scammers play on.
How to Avoid Forex & Crypto Scams
It is actually quite easy to avoid any type of scam that may come your way, the easiest method is to Google it and do research first, but some of them are so professional and complex that it is hard to see the truth. The following signs should help.
- They contact you direct.
- Claims of 100% success.
- Claims of a high return with little risk.
- They have found a secret formula.
- They use Artificial Intelligence A.I
- They use name dropping like "Elon Musk".
- Signal Sellers offering unrealstic retuns.
- Never act on your emotions.
Types of Forex & Trading Scams
There are various types of scams in the financial markets, but we are going to focus on the ones that affect our customers at ClickAlgo, these usually are as follows:
Automated Trading Systems
An automated trading system is a computer program that will automatically trade using a pre-defined set of trade rules to open, close positions and manage risk. The markets are saturated with individuals or companies promoting unrealistic high returns in a year with little or no explanation of the risks involved.
Drawdown (RISK)
When you look at purchasing an automated trading system (ATS) you should also be looking at the risk which is usually shown as the balance and equity drawdown, and this is how much of the capital was at risk at any time, a 50% drawdown would mean 50% of your balance was at risk at some point, so high-risk trading where you could blow your account.
Net Profit
Promises of 1000% return in a year is very unrealistic and if such a system existed it would not be sold, our trading systems show example backtests of about 20% Net profit per year with 5% or less drawdown which is more realistic as well as the fact we stress that our systems are semi-automated, so the trader needs to also get involved during unpredictable market events.
Signal Seller Scams
The cTrader trading platform has many signal providers on cTrader Copy, they also contact traders on social media platforms like Telegram, we are going to tell you how to spot the scam artists. Reputable trading companies with real online feedback are a much better option if you do decide to use a signal provider, just do your research first.
Signal Sellers are usually individuals who send trade setups via email or a social platform in return for a fee.
This is what you should watch out for:
- Subscription fees.
- Broker-tied signals, this is where signals are offered for free if you sign-up with a broker.
- The signal provider does not provide historical results over a longer period than 1-year.
Social Media & Website Scams - Elon Musk BTC Give-away
Being contact via social media like Telegram is a huge red flag that it is a scam, remember that scam artists contact you directly and offer a lucrative opportunity, a common one at the time of writing this article is the Elon Musk Bitcoin offer where you send Bitcoin and they send you back double.
Slick Scams With Professional Websites
This is where it gets very complex as there are some very good looking professional websites out there offering too good to be true investment opportunities. These professional scams will fool most new traders.
This is what you should watch out for:
- Claims of a high return on your investment.
- They have found a secret formula.
- They are using artificial intelligence A.I.
- They use videos of satisfied customers saying how they made money.
How to Spot These Scams?
Spotting these scams is more difficult, but not impossible, for a start you would do a Google search for the company name followed by the word Reviews, an example would be ClickAlgo Reviews, a trustworthy business would have reviews from well-known review platforms like Trustpilot and other independent real-online customer review websites.
Fake Reviews
These are pretty easy to identify, many scam websites will write their own reviews on their website and you should never trust reviews that are on their own website, sometimes they saturate Google search with their own written reviews and sometimes they even create new websites with different names and post the reviews. Always trust reviews from reputable independent Review sites like Trustpilot, Facebook, Google or Yelp.
Conclusion
Never act on your emotions for financial gain, be safe and do your research first.
