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 - http://www.forexpeacearmy.com/

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.
 
5. 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) 


6. 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. 


7. 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? 
     
    
8. 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.


9. 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 1^st position EA or something close to it. Most offers are dubious. Always verify directly from the host's website.


10. 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.

Protect yourself. Avoid getting ripped off from poorly written EAs, and fakes. Design your own Forex Robot with ease.

StrategyQuant EA Wizard is a tool that virtually every trader needs. It allows anybody to create Expert Advisors for MetaTrader4, quickly, simply, without programming. The simplest way to convert your trading idea into a Forex Robot!

 

Genetic Builder: Choose indicators, price values and other components you want to use in the trading strategy and Genetic Builder will do the rest. No programming or trading knowledge is required.