Forex scams
The following forex scams list documents the scam type that have been involved in forex frauds in some form in the past.
Signal sellers
The signal seller scam is a scam which works by a person or a company selling information on which trades to make and claiming that this information is based on professional forecasts which are guaranteed to make the inexperienced trader money. They usually charge either a daily/weekly or monthly fee for this service but do not offer any information that helps the trader make money. They will usually have a slew of testimonials from allegedly legitimate sources in order to gain the trader’s confidence yet in reality do nothing to forecast profitable trades.
High yield investment programs
High Yield Investment Programs (HYIP) are (a lot of the time) a form of Ponzi scheme in which a high level of return is promised for a small initial investment into a forex fund. However in reality the initial investors are only being paid back by the money generated by the current investors and once there are no more investors in the scheme the owners usually close it down and take all money remaining.
Manipulation of bid/ask spreads
These types of scams have decreased over the years yet they are still around. This is why it is important to choose a forex broker who is registered with a regulatory agency, for example the CFTC and the NFA if in the USA. These type of scams would normally involve having spreads of around 7-8 pips instead of between 2-3 pips which is the norm.
Scams through software
Forex robot scammers lure novices with the promise of big gains from little effort or knowledge. They may use of fake or misleading figures to convince customers to buy their product. Their promises are flawed as no robot can adapt and thrive in all environments and markets. Software is generally used by professionals only to analyse past performance and to identify trends. All software should be formally and independently tested but caution is required when trusting the reviews themselves as these can be paid for. If their product did exactly what they claimed then they would not be selling it but instead using it exclusively themselves.