How To Spot a Forex Scam - Blackswan Fx

How To Avoid Forex Scams

How to spot a Forex scam

The first thing you should know about the foreign exchange market is that, although it may be a lot of fun and thrilling, there is no one button you can push to transform your money into millions of dollars overnight.

 

That’s shocking, I know.

 

Nonetheless, that never occurs. To put it simply, no such thing exists.

 

Never forget that there is NO SUCH THING as the guaranteed hundred-pot-of-gold-profit that some flashy websites claim.

 

For as long as there has been a Forex market, there have been frauds.

 

The problem is widespread.

 

Is there any way to determine who is trustworthy? Moreover, how can you recognize a forex scam?

Learn about the many scams that exist, how to protect yourself, and what to do if you ever fall victim to one in the following blog post.

To begin, let’s agree on what “SCAM” means.

What is a Scam?

In my opinion, this is the marketing and selling of a useless item. That would be like purchasing a carton of milk only to discover that it contains water.

In foreign exchange (Forex), the term “scam” is often used. There is low-quality merchandise available, to be sure, but that doesn’t automatically make it a con designed to separate you from your cash. Think about the seller’s motivations; if they just care about being paid, even whether you buy anything, it’s probably a fraud.

Several universal traits characterize 99% of frauds operating in tandem with the foreign exchange market, and we’ve laid them out for you here. You may avoid falling prey to currency fraudsters if you keep an eye out for these red flags.

 

How to spot a forex scam

1. Warning List

Whether you are contacted by, or are even thinking about joining, what seems to be a forex trading program, the first thing you should do is see if the scheme is on a warning list maintained by, the Financial Conduct Authority (FCA).

 

Obviously, you should not do business with a company that appears on a warning list.

 

2. Threat of losing opportunity to put down deposit

Before making any kind of financial commitment, a genuine business will make sure you are completely at ease with them.

No one there would ever put you under undue pressure to make a financial commitment on the first call or use scare tactics like “limited time deals” to make you feel like you need to make a decision immediately.

If you are being coerced in any way, shape, or form, it is imperative that you cease all communication with the other party immediately, as they are most likely attempting to con you.

Any recommendation that you don’t withdraw your money at any moment should likewise be treated with skepticism.

SCAM!

4. False Advertising and the Promise of Outsized Profits

You can earn at least 100,000,000% with my ‘Golden’ technique, I guarantee it!

In almost all cases, you may expect a positive return on investment from your trading activities.

Earnings assured to the tune of one hundred bars with zero danger!

“We have cracked the code to making you a victor!”

It’s the same old blah blah blah…

There is no one on this planet who can promise you financial success. It’s just the way things are, unfortunately.

It’s safe to assume that anything that seems too good to be true really is.

Abandon!

 

5. PAMM Account / Forex Mutual Fund

An acronym for “Percent Allocation Management Module,” or PAMM. Forex Mutual Fund  is another name for it. This is an innovative con that targets technically-inclined investors.

The broker will tell you that they have access to highly competent forex traders who can get you incredible profits if you let them handle your trading. They will demonstrate how your modest account will be connected to a larger, higher-value account, and how your return on investment will be proportional to the amount you contribute.

You will be sent to a phony website where they claim to have evidence to back up their claim.

They could even present you a potential return on investment of 20% to 60% to make you feel bad about turning down the deal.

Keep in mind that if you fall for one of these scams, you may kiss your money goodbye. The average monthly return for a legitimate PAMM account is between 2% and 5%.

AVOID!

So what have we learned?

Con artists are very much alive and well.

Some very evil individuals are out there who are seeking dishonest means of subsistence. Unfortunately for them, you have a high IQ.

Do your homework, verify references, read reviews on reputable sites, and avoid offers that seem too good to be true, and you should be alright. The Internet is a goldmine of information.

Make sure to also post in our forex discord if you have any questions. It’s always helpful to hear from other people.

Take your time learning how to trade forex correctly, since there is no quick and simple way to make money in the forex market.

 

Need more help?

We’re always happy to talk. Use the bottom right corner of this page to contact our live chat team, or click the button below to send us an email!

 

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