Common Forex Scams and How NOT to be the Next Victim

Common Forex Scams and How NOT to be the Next Victim, FP Markets

Common Forex Scams and How NOT to be the Next Victim

The Forex (Foreign Exchange) market is massive, with more than 6 trillion US dollars daily average trading volume. Over the last decade, more investors have immersed themselves into the foreign exchange market, and it has been more popular than ever. 

Forex investment is a legit way to make money, but it can also be one of the easiest ways to lose money. It’s essential to ensure that the forex broker you’re working with is legit and regulated by reliable financial authorities. Otherwise, you can lose all your money, and there will be no possible way to get it back.

What follows with this popularity is its many forex trading scams. Big money attracts scammers. Most of the Forex trading scams promise unreal and quick returns by using “secret algorithms” or advanced bots that perform trading for you. Fraudsters use many tactics to trick investors into handing over their money from adverts on social media to setting up fake websites. 

What Kind of Forex Scams Exist?

A Forex scam is a scheme that scammers use to cheat Forex traders by claiming to offer a trading system that will allow them to earn a high profit within a short period of time.

While foreign currency trading is not a pyramid scheme or a scam, the foreign exchange market is vast and mostly unregulated. Therefore, it is easy for unscrupulous people to trap unwary investors by setting up scams. 

Clever and merciless scammers are hiding behind those crimes, so to recognize and steer clear of their tactics, you will need to be on your guard.

You might be tempted with 6-figures, 7-figures, etc., and promises of easy money in a short period of time, but that should be your initial warning signs. It certainly doesn’t mean that any online trading platform that claims high profit is a scam, but unsolicited and persistent marketing is typically a sign of fraudulent behavior.

Here are a few things to watch out for to avoid Forex scams you may come across:  


Types of Forex scams

The following Forex scams list documents the scam types that have been involved in Forex frauds recently and in the past. Considering these as red flags, you should read them carefully. 

  • Signal sellers

Signal sellers offer suggestions about the best time to buy and sell currencies based on what they say is market analysis. This scam sells information based on professional forecasts and guarantees traders that will gain more money. They guarantee that this information will make their profit, so they drive them on which trade to make. The information they provide is fake and not helpful at all and there is a charge either daily/weekly or monthly for this service.

  • High yield investment programs

High yield investment prοgrams (HYIP) are frequently just a fοrm οf Pοnzi scheme in which a high-level οf return is promised fοr a small initial investment intο what is, in fact, a Fοrex fund. Hοwever, in reality, the initial investοrs are being paid back frοm the mοney generated by the current investοrs, and a cοnstant flοw οf new investοrs is required tο keep the funds flοwing. Since more investοrs are in the scheme, the οwners usually clοse it dοwn and take all the remaining mοney.

These types of scams have decreased over the years, yet they are still around. This is why it is essential to choose a Forex broker who is registered with a regulatory agency. These type of scams would typically involve having spreads of around 7-8 pips instead of between 2-3 pips which is the norm.

  • Scams through software

Forex robot scammers attract beginners with the promise of significant gains from little effort or knowledge. They may use fake or misleading figures to convince customers to buy their products. Their promises are flawed as no robot can adapt and thrive in all environments and markets.

This type of Forex scam usually involves a trader taking your money, and they use it for their purpose, to buy all sorts of luxury items for themselves instead of investing them. When the victim eventually asks for their money back, there is not enough money left to repay.

  • Ponzi and pyramid schemes

They promise high returns from a small initial investment upfront. The early investors usually gain some sort of return on their money and are motivated by this success. They then recruit their friends and family into the scheme. Investment opportunity scams often begin with a phone call or email out of the blue from a scammer offering a ‘not-to-be-missed, ‘high return’ or ‘guaranteed’ investment. However, the truth is that the ‘investment opportunity does not exist, and their initial return is being funded by money paid in by other members of the scheme. When the investor numbers start to drop, the scammers close the scheme and take the money.

  • Boiler room scams

This type of hack involves these scammers usually getting people to buy shares in a worthless private company to promise that their shares will increase substantially when the company goes public—sometimes claiming to offer solutions that inform the traders about the best time to purchase and sell currency pairs to earn profit. They depend on using “urgency” – suggesting that an opportunity will be lost if they do not act quickly, preventing the target from properly researching the opportunity. Once the scammers have made all the money they can, they will disappear with everyone’s investments.

Common Forex Scams and How NOT to be the Next Victim, FP Markets

How to avoid Forex Trading Scams

General rules to follow to Avoid Falling for Such Forex Scams

Forex trading is definitely for real, and you can make money in this category, but it is not for the faint of heart. And it’s also easy to fall for forex scams, losing a lot of money.

Before sharing your credit card or your phone number, there are a few steps to follow to avoid fraudsters you may have come across: 

  • Learn to trade on the Forex market properly, finding trustworthy brokers/teachers of Forex that can be trusted.
  • Use demo accounts and learn to make long-term profits before trading for real.
  • Take time to make your own analysis, understand a trading platform’s rules and regulations, and never rush your decisions. Be critical with your approach, analyzing statistics and making your own functions that you have tested and had success with on a demo account first.
  • Talk to a trusted financial advisor or wealth advisor. Check the authenticity of the company. To do this, check the location/jurisdiction where the business is registered. Many Forex scammers will trade from a location where they believe the local law will make it hard to prosecute them internationally.
  • Know how much money you are willing to risk before sharing your bank account.
  • Before purchasing a product or following someone’s advice, ask for detailed background information on profits and losses. If they can’t or won’t provide it, walk away.


Tο ensure yοu’re nοt a victim οf a scam, always use a regulated brοker that is well established, has favοrable οnline reviews, and is 100% transparent in its fees and cοmpliance pοlicies. Alsο, check websites οf regulatοry bοdies (Cοnsοb fοr Italy, Cysec fοr Cyprus, FCA for Great Britain, NFA fοr the United States, etc.) tο verify that the brοker’s legal standing has nοt changed. The allure οf quick mοney and easy cash will always be present, which is why yοu shοuld make sure that yοu fully understand what it truly takes tο becοme successful at currency trading withοut using quick-fix schemes that put yοu at risk.

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