Six (6) Pitfalls That Will Make You Fall to Scams and Seven (7) Ways of Avoiding Them

The Forex market is volatile and carries substantial risks. It is not the place to put any money that you cannot afford to lose, such as retirement funds, as you can lose most or all it very quickly. The CFTC has witnessed a sharp rise in Forex trading scams in recent years and wants to advise you on how to identify potential fraud. -

Scammers and scam victims are like the animal planet scenario - (Predator and Preys). The preys are most times new born, defenseless, attractive, naive, weak, gullible, and adventurous, while the predators are fast, well armed, crafty, aged, and nocturnal in nature. The predators preferred mode of attack is ambush and lure traps. 

Some animals are sensitive to the presence of predators, and their likely attack setups. The herds or flocks guide their young for a specified period of time until they are old and strong enough to sustain themselves in the wild.

The Forex Market is one of the most dangerous Financial Wild Reserve Park amongst other Financial Investments. The predators here are constantly developing intelligent schemes to rip off unsuspecting clients daily. The methods being used today by scammers are dynamic and much more alluring when compared to schemes used in previous years.

See: Scam cases filed in ForexPeaceArmy Trader's Court

Extensive research on scam patterns revealed some common tricks scammers deploy to catch their victims, and also pitfalls most victims of scam are prone to.

The Six (6) Pitfalls that can make you fall to Scam 
1'st Pitfall
Lack of in-depth knowledge of Forex Trading in regards
       a. How it operates 
       b. Mechanisms behind Forex Systems (EAs, Indicators,
           & other tools)

       c. Risks and rewards involved.

2nd Pitfall
Not conducting thorough investigation of a Forex product before buying it is a dangerous pitfall. It is strongly recommended that you effectively investigate the actual claims or functions of a Forex product before committing your money. There are websites like which conducts Forex product testing, and user review ratings. You can also try out our FX-Probe (Investigator) Services.

    EA Wizard is a software that allows anybody to create Expert Advisors for MetaTrader4, quickly, simply, without programming 
    The simplest way of converting your trading strategies into a robot.

    3rd Pitfall
    Accepting offers from unverified emails, unsolicited emails, and spam mails is a sure way of falling victim to scam deals.

    4th Pitfall
    Impatience, greed and excessive desire to get rich quick without hard work. 

    5th Pitfall
    Asking the wrong questions about a product from the vendor can make you fall for cheap scam deals. Also getting wrong or deceitful answers from the vendor despite asking the right questions can make you fall to scam deals.

      See: The 10 right questions to ask your Broker

    6th Pitfall 
    Purchasing Forex products through unsafe or less reliable financial medium on the internet. Not all “30 day refund policy or 100% guarantee” are trustworthy especially when the vendor utilizes payment options, which do not offer customer security or refund policies. Unverified or poor security payment options are scammers choice for trapping their victims.  


    These are the common pitfalls that can make you fall to scam deals. The most vulnerable pitfalls are most times not caused by the scammers but by yourself because the final decision or choice is taken by you.

    In the game of football it is often said that the best form of defense is attack. In Forex the best form of defense against scammers is avoiding them. 

    There are numerous ways to defend yourself from Forex Scams but not all the methods are efficient enough. Find out the Seven (7) efficient methods of avoiding scam deals based on my research on scammers cleverly concealed tricks and traps.

    Click here to find out more....


    1. Constantly update your knowledge about Forex. Devote time to research, and study of the financial market. The more facts and tips you acquire about Forex the lesser you can be deceived.  

    2. Always inquire about a product from popular, and reputable Forex forums before purchasing it. See samples of inquires below:

      • Has anyone used this product before and how long? 

      • What was your experience on the performance of the product in a demo or live account?  

      • What do you know about the developers or vendors?

      • Apparently answers to these inquiries are most times stated on the FAQ page of the vendor or developer’s website. However different user reviews outside the vendor’s website are more genuine. I strongly advise you visit at least three user review forums and compare your findings. I recommend as one of the best place to get unbiased reviews about a product. You could also try our FX-Probe (Investigator) Services.

    3. Carryout a personal test of the product with reliable strategy testing tools. Virtually all Forex products
      come with back tested results displayed on the vendor’s website or are included in the product’s package. It is recommended that you conduct your own
      test with optimized settings and turn on the visual mode in the strategy tester to see how the Expert Advisor works visually. To get the best analysis from your test, you’ll need at least 90% quality tick data, and very good strategy testing tools. I recommend using StrategyQuant’s Tick Downloader and EA Analyzer. StrateQuant's EA Analyzer produces more analysis than the conventional strategy tester on MT4 platform. You can get them here for free when you signup

    4. You need to be patient in Forex. Don’t be in a hurry to become like Warren Buffet in one year. 

    5. Do not respond to unsolicited emails from unverified vendors making an offer to buy a product. Most of such emails can be detected by their poor tenses and strange URLs. Do not click on the links in the email but rather type in the address on a new window in case you want to verify or investigate the source. I strongly advise you try out our Fx-Probe (Investigator) Services, which would help to decipher such strange offers. 

    6. If you sense something unusual about an offer, then don’t be the first to buy it instead request a demo license. Good products would always remain in the market, so you’ll have enough time to follow it, and see other user reviews before buying it.

    7. Be very careful with free trial offers. Most of them have hidden traps, concealed fees, and cunny motives at the end of the trial period.

    Let these seven tips be your guide, and you will be free from scams. An old parable says "prevention is better than cure..."

    Are you experiencing issues like these....

    My broker has refused to honour my withdrawal request for many months despite several emails and calls.......

    My account has seriously deteriorated barely three weeks since i opened a managed account. The managed account operator is not giving me any tangible reasons.......

    If you think you've been scammed or you want an investigation about your ordeal, file a complaint here:
    or request our free FX-Probe (Investigator) Service


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    About Onyebuchim C. Obike
    I am an IT specialist in Software Programming, Networking & Telecommunication. My quest for an alternative source of income led me into Forex since 2005. My encounter in Forex over the years made me to develop a site where traders can get reliable and effective Forex Resources & Tools, that would make them successful traders. I prefer combining Technical & Fundamental techniques in trading. Follow me on facebook:

    10 Secrets of Detecting Scam Deals

    The unregulated and highly profitable Forex Market is extremely attractive, not only for us as traders, but also for those who are best defined by the word "SCAM". According to CFTC records, the average individual foreign exchange trading victim loses about $15,000 -

    A certain awry deal many years ago led me to the ForexPeaceArmy for assistance. They were very helpful in resolving the issue i had with a Forex Vendor. The ForexPeaceArmy are dedicated folks helping Forex Traders to resolve and recover their funds from scam deals. They have successfully handled lots of scam cases.

    There is a high rise of Forex Scam deals as evident in the warnings stated by the CFTC, and other Forex Regulatory Agencies. Most of these deals go unnoticed with huge losses, which are most times unrecoverable.

    This article reveals the 10 Secrets of Detecting Scam Deals and other related tips from CFTC's Fraud Advisories.
    1. Take note of get rich quick slogans especially with EAs & Trading Strategies. For example “This bot generates over 1000% returns in few months with zero drawdown…..”. This is a killer scam because there’s yet to be any EA to my knowledge without a single drawdown. Drawdowns are inevitable in Forex. Therefore an ideal system should have lesser drawdown to profit ratio on the long run. 

    2. Watch out for similar or look alike brand names, and functionality dubbing a popular EA or Forex Product on the market. Some EAs are faked by impersonating the real EA’s functions. They often come with very looks on their package with cheaper prices to attract buyers.

    3. Poorly designed website with no locatable address or phone number. This can be very easy to detect especially for some websites that upload picture files of the results of backtested EA's which looks choppy and blurry in appearance. You’ll find little technical information of the product but lots of positive graphs and bogus figures inserted in thumbnail sized pictures. Be careful when you come across offers emanating from places like this.

    4. Awkward positive reviews on the website of the vendor’s Forex Product. Watch out for unusual similar statement patterns, and location of the users posting reviews.
    6. No proof of segregated accounts for fund managers scheme or PAMM. Although a verified proof is still not enough to assure you of the integrity of the operator, hence it is safer to investigate the personality of the operator. (see our FX-Probe (Investigator) services) 

    7. Look out for unclear refund policy statement. If the refund policy is stated in the advert of the product on
      the vendor’s webpage, but not stated in the agreement document or any legal binding document then you are likely walking into a dangerous deal. Also watch out for Refund Policies not tied to internationally recognized financial payment options

    8. When the vendor cannot give right answer to questions like the ones below then be careful.
      • Can I get a refund if your conditions or performance are not met?
      • I have heard issues from customers and user reviews about poor performance or product failure sometime ago. Is this true? Has it been handled? If yes how was it handled? 
      • Can I get an investor access to your live account, and watch it trade live for some months?
      • Why is your regulatory certificate still pending?
      • Can you please clarify if there is a relation with your company name, or registered name, or partner's name, or subsidiary's to a closed down or an existing case with a Regulatory Agency? 
    9. Unsolicited or spam emails flooding from a particluar vendor requesting you to buy his product. The emails are most times poorly written with encrypted and shortened URLs. Most times the cost of the product is drastically reduced as a bait to lure you to consider buying it.

    10. Watch out for statements emanating especially from emails saying “we are the authorized sellers or representative of the winner of the MQL4 or MQL5 Championship Competition EA, and we are offering few copies of this EA at a discount price of……”. Usually at the end of most MQL competitions, there is a surge of fake offers to sell the 1st position EA or something close to it. Most offers are dubious. Always verify directly from the host's website.

    11. When the vendor absolutely or continuously breach the conditions of service or the product performs absolutely terrible against the claims on the adverts or performance results on the website in a normal trading condition. This is red alert of a probable scam deal.

    Applying these secrets would not only help you detect, and avoid scam deals, but would also help to drive scammers out of the Forex Market. A faster way of getting this done is sharing information like this to other traders.

    Other related tips: CFTC's Fraud Advisory Guide -   
                                  Beware of Currency Trading Fraud
                                  Fraud Awareness and Prevention      

    In the third chapter of Forex Scams, we would reveal our 6/7 code - Six (6) pitfalls that will make you fall to Scams/Seven (7) ways of avoiding them.

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    Forex Scams

    What is a scam? – 

    “Scam is a fraudulent business scheme” or “to deprive off by deceit” – (TheSage’s English Dictionary and Thesaurus)

    Scam is synonymous with fraud. It is deception, make belief, trickery, pretense, cheating, e.t.c.

    A lot of people have fallen one time or the other to scam deals knowingly and unknowingly. Some got out with partial loss, while others lost everything without a single recovery. Scam victims usually suffer unbearable psychological pains due to the level of trust built with the scammer and the loss incurred. 

    Unfortunately any venture with high potential for money making is always alluring to scammers and Forex is one of those ventures. 

    Scamming in Forex had been in existence right from when Forex began, only that it has taken a new dynamic dimension in this current era. Forex Scam is the act of fraudulently taking money from a client or customer with the intention of providing a rewarding service for the client or customer, which is not true. In some cases the services promised by the vendor could be rewarding or true but at the long run, a glitch occurs due to either poor design or failure in the service or product, and the vendor promises to make up for the loss and later on disappears after months of negotiations without any refunds. 

    Examples of Forex scams include ponzi schemes, which is more prevalent in Forex Managed Account Schemes like PAMM, Pooled Asset Manager Scheme, and Pyramid Schemes. 

    Let’s get this right, not all scam complaints are actually scams. A case scenario might look similar when it’s being matched with real scam cases. But when you look deeply into such complaints, you’ll find wrong perceptions and false alarms. 

    A lot of inexperienced Forex Traders are quick to scream “I’ve been scammed” due to their level of knowledge in Forex. If you fail to follow the instructions of a product, and experience losses then that’s not a scam. For example when a signal service provider says “use default settings for accounts lower than $1000, and do not adjust the Money Management Settings otherwise you will get undesired results. However you’ll make little pips but on the long run your account will grow steadily”. Then if an inexperienced trader gets impatient or greedy, and ignores the warning by tweaking the settings in order to attain short term quick gain in his account, such a trader would unfortunately experiences an undesired loss to his/her account

    Then let's assume the trader gets infuriated and sends series of complaints to the vendor about poor performances of the product and later request for a refund. When the vendor refuses based on the trader’s negligence, then a scam alarm is raised. Unfortunately this does not qualify for a scam case.

    Every forex product has its threshold or required standards because they cannot be 100% perfect at all times. And usually most vendors state this caution or disclaimer notice on their website in order to protect users from unprecedented loss from market uncertainties. So it is the duty of a customer to keep to the product’s limits. When you go against it and face the undesirable consequences then asking for refunds would not work, and establishing a scam case would be extremely difficult.
    When a trader uses a Forex product not designed for news trading or for a particular trading session or configures the settings against the design of the Forex Product and gets losses then the trader cannot claim he/she has been scammed. 

    I’ve been scammed where can I get help?

    See: File a scam complaint and get help; or
            Use our FXProbe (investigator) Services for guide on 
            handling a scam case.

    To be continued....

    In our next chapter of Forex Scams, we would reveal the Ten (10) Secrets of Detecting Scam Deals

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    Protect yourself!!! 
    Knowing the true performance facts of that Forex Robot or Strategy could save you from getting scammed. This tool would help you dig deeper and reveal facts you never knew.

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    About Onyebuchim C. Obike
    I am an IT specialist in Software Programming, Networking & Telecommunication. My quest for an alternative source of income led me into Forex since 2005. My encounter in Forex over the years made me to develop a site where traders can get reliable and effective Forex Resources & Tools, that would make them successful traders. I prefer combining Technical & Fundamental techniques in trading. Follow me on facebook: