Forex Scams
(Read more about me. Click here)
Forex scams are all to common unfortunately, and are in abundance when it comes to the trading education industry.
However, in this article I will focus and cover what appear to be normal trading educational services, Forex community memberships but are in fact Forex trading scams.
Due diligence should be undertaken to avoid these scam-like Ponzi schemes. They take subscription payments from new unsuspecting innocent new Forex traders.
They offer up proof that the trading strategy and that the person offering the Forex trading education can trade.
Yet, the flaw with this evidence is that anyone can offer up the proof they way they do it. More on that later.
Instead they focus on offering distractions that many fall for.
They are mostly not Ponzi schemes exactly, but are scams in as much they focus on operating in plane sight.
New Forex traders should be aware… currency trading is hard enough, without the added problems of Forex educators pretending to be traders, anyway.
From the sophisticated style, distraction-type scam-marketing, to the blatant and obvious red flags.
I cover what Forex trading education services you should be avoiding so that you do not waste your time and money!
Most importantly, what warning signs you should be looking out for. This is to increase your odds of trading success and to give you the best chance of learning to trade Forex by avoiding these scammers.
Be sure to read the entire article to educate yourself so you do not fall for an educational Forex scam!
This will ensure you do not waste your valuable time and money learning to trade in the Forex market.
Equally it will give you the very best chance of success in the fastest time possible avoiding such services.
Firstly, Forex trading is real (when you change your money to go on holiday this is done on the Foreign Exchange) This exchange is where speculation (trading) also happens.
A bet whether the currency will rise or fall against another as the currencies are in pairs.
EURUSD for example – Euro / United states Dollar.
So, it is of course possible to be a successful Forex Trader, but only if you listen and learn from the right people.
Secondly, what qualifies me to write this article on the Forex scam?
- I offer my opinion as a ‘proven by demonstration’ Forex trader.
- In 2022 I was invited to trade with a Hedge Fund.
- Traded transparently over 24 months sharing live trade alerts and continue to do so.
- Provided 12 months live account statements (see performance click here)
- Taught to success (full time trading achieved by more than one member read more click here)
This should give you the reassurance that I know what I’m writing about when it comes to Forex scams.
Right, on with the article.
Forex scams – Why do they exist?
My theory that the reason these Forex scams exist in the first place is that there is a clear demand for a successful and glamorous lifestyle in today’s world. Online figures and online platforms gave rise and more options than ever to become a successful entrepreneur.
This continues to be elevated by social media presence and usage.
Especially the likes of Instagram where a picture tells a thousand words…
The issue, in my opinion starts with the ‘immediate gratification’ mindset. Hear me out…
In my opinion there seems to be an overwhelming demand for success and to be rich!
I want success and I want to be rich now! Remember if someone is blinded by their goal and forget there’s work to be done they are an easier target.
Or I think what describes this movement for most people more accurately when you look on Instagram…
I want to ‘look’ successful but I don’t really want to put the work in. We all know social media isn’t real life but unfortunately many get sucked into believing it is.
As someone who interacts with people on social media on a daily basis, I have first hand experience of the unrealistic mindset I tend to experience.
More often than not the focus and statement is – I want to make £500-£1000 so and so on their Instagram are doing that.
When the question should be, ‘How can I learn the correct way to trade Forex to enable me to make £500- £1000 a day?’
The incorrect mindset is what blinds the potential traders who are perfect prey for scammers.
By doing so they are completely losing the perspective of reality.
This mindset is perfect for Forex scams.
Their expectations are wildly unrealistic.
Why is there a statistic so heavily weighted to a minority of successful traders? i.e. only around 10-20% ever make it as successful.
Brokers will display how many of their clients are profitable.
This floats around 75-80% of their clients lose money.
That is a huge number of potential clients looking for an easier way to make money trading.
So, it is no wonder there is a demand to ‘become a successful Forex trader the easy way’.
The biggest mistake to make is wanting to just be successful without no real intention of working for it.
It is like wanting to be (proper) famous.
You are not just ‘famous’ for being famous.
Real Fame and success come from real talent and work
For example, Liam Gallagher from the band Oasis.
He is famous because of his talent of signing and song writing.
That fame come from hard work, determination, perseverance and talent.
A talent I might add he wasn’t born with. He worked hard to master that talent which attributed to his success and fame.
When it comes to learning to trade Forex.
The common mindset and approach I see time and time again is the hunger for big money with no intention of working for it.
This is where the Forex scams come in.
They are going to feed into the newbies delusion and naivety.
Let’s cover the two of the most common Forex scams and what you should avoid at all costs.
At the end of the article I will cover what you should be doing to ensure you do not fall for any of these Forex scams.
Watch the Short Video Below on This Popular Forex Scam
Forex Scams
Flash and Luxury Lifestyle and Success
The most obvious marketing for Forex scams is the ‘flash and luxury life style Success’ Pretending they earned it from financial markets.
These types of Forex scams like to portray a glamorous lifestyle on social media that appears to be the result of their trading success and high returns.
This may include props such as luxury destination, penthouse, yacht, laptop by the swimming pool / Jacuzzi, bundles of (fake) dollars champagne, watches etc…
All of that is 100% ok of course if they back up their trading strategy they are selling and performance with data and proof.
This approach is usually accompanied by forecasts and recap, hindsight trading. Why is that a problem if it shows the strategy works?
Simple, even a Forex trader with a months experience can be a successful trader doing that… you see the problem now?
No real trading information provided at the time trades taken with details of entry stop and target is the easiest way to falsify results .
That’s because they would actually have to be able to trade successfully to do that…
When it comes to learning to trade Forex the luxury and glamorous lifestyle is often a distraction from proving it works and backing it up.
Thus, blinding the unsuspecting newer trader into thinking this is what you can achieve if you sign up.
Remember if they put so much effort into marketing why not put effort into proving what they sell works and respect your clients.
The focus for these services and Forex scams is to intentionally distract the potential new member.
This will trick many (it did me years ago) into thinking the glamorous lifestyle is easy to obtain.
Even with proof of such material possessions the focus should be on how they obtained them.
Was it through trading success? Or marketing misinformation as trading education?
Forex scams come in many different forms.
Paid trading signals are illegal if the service is not regulated by the financial conduct authority but that is a fairly obvious scam and easy to follow their performance.
They may offer a possible scam brokers instead of a legitimate brokers. Certainly worth insuring that if you are trading Forex its a good idea to do a back ground check and make sure that it is a regulated broker. Given the high risk involved, you don’t want to be a victim of a Forex fraud before becoming a Forex trader.
Next is the more subtle approach for those that have less trading experience it won’t be so obvious.
Less glamour and more distraction and possibly some high-pressure tactics on mentoring.
Slick marketing focused on a simplified process approach to trading.
This will likely be pure price action only approach boasting clean charts as the easy and simple way to win!
I have personally worked with many a victim of a Forex scam, so I know this approach only too well.
This is an attractive offer to the newer retail traders new in the Forex trading industry.
No indicators and what is perceived to be a simple way to trade. (if backed up with credible evidence sure it’s ok)
This couldn’t be further from the truth. Bad people offer price action without backing it up and are common scams.
99% of my clients all tried pure price action and failed.
Not because they were bad traders because they were badly taught by pretend traders; Forex scams.
They all say the same thing, too much discretion, too vague and no real proof.
Funny enough the guys that went in to full-time trading both come from a Forex Scam service offering pure price action and luxury posts. Both become full time using indicators as it reduces discretion hugely!
Below I cover what you should be focusing on to ensure you are going to have the best chance of success.
Many marketeers do not have a clue how to trade. They make their money from their membership fees. A real Forex scam as they are false advertising.
If they are a real trader then the educator who chooses to advertise in this way should have no real issue in supporting some sort of proof of trading returns.
All that is necessary with such marketeers is some further investigation and questions.
Beyond all the glamorous lifestyle, if it were true, they would provide clear evidence of some sort of trading record.
Below is not acceptable evidence
- A screen shot of profits
- Video of trading profits
- Stating a return % on social media / website with no back up
What is acceptable evidence?
- Downloading statements in real time from a live account while screen recording
- Accountant verification of trading returns
- Experiencing their education for yourself
There is flaw in my opinion with Price Action Only, Clean Charts and Forex Trading Simplified.
Clean charts mean fewer anchors for relative conditions to materialise and be confirmed.
This means a lower probability stack.
This approach appeals to the newer traders mindset that by having clean charts the process of learning to trade is perceived to be easier.
This couldn’t be further from the truth.
Trading is a game of probabilities.
Your aim as a trader is to get more conditions stacked up on your side of being right so the that the probability of being wrong is decreased.
Discretion, judgement and subjectivity for a beginner should be replaced with as many objective conditions as possible.
This is to enable an almost checklist style approach.
This mitigates risk and encourages discipline as you trade the plan(strategy) and obtain experience in trading the market.
Moreover, when back-testing you have more conditions to work with and little to no discretion this becomes easier to implement when live trading.
Below is one of my own favourite quotes –
“If you do not define your conditions to the point that your subjectivity has been replaced by objectivity you do not have the sufficient conditions to back test accurately. Let alone trade successfully”
What this means is newer traders do not have the knowledge to understand that approaching the market by using judgement, and discretion will almost always end up in failure.
This is why no indicators, clean charts and price action only trading is a flawed approach for beginners in my opinion.
And this will place you at a huge disadvantage.
Here at Able Trading we use indicators and have a clear plan and approach to trading.
You may hear that indicators are lagging, however who said we are using them to predict the future?