0
0
Instagram forex scams have become prevalent as of late with the rise in accessibility to forex trading as well as influential, and sometimes deceiving information on social media.
Trillions of dollars are traded every day on the forex market. And lots of money is made by experienced and knowledgeable traders. And many of you may aspire to become a seasoned and successful trader, so don't let a few scammers keep you from growing your porfolio and building a legitimate source of income for yourself.
In a market where so much money moves back and forth, it is inevitable that among all the traders, brokers, influencers and affiliates, a few bad apples out there may try to take advantage of social media platforms to influence and scam amateur traders.
In a world where ‘Tinder Swindler’ sociopaths use social media to scam smart and successful women looking for romance, out of their life savings, if you’re looking to make some profits through forex you’re bound to bump into a similarly shady opportunist or two along the way. In a similar ‘swindler’ manner, these scammers will boast big wins, earnings, post photos on yachts and at expensive restaurants. They will try to sell you on a ‘romantic’ notion that you can make easy money trading forex and have their kind of success. But are scams always this obvious? Can you set up a plan to avoid them and still have success as a forex trader?
In this blog post we go over several types of Instagram forex scams, as well as other types of scams to be aware of and red flags to avoid. We also talk about how to know if a broker is legit, how to build a circle of trust, and finding reliable and trustworthy resources so you can begin to build the trading success you are aiming for.
So let’s dive in.
Types of Instagram Forex Scams
There are many types of scams, and social media platforms such as Instagram make it easy for scammers to ‘cast a wide net’ and catch some easily-influenced people intrigued by the idea of making easy money online. Knowing these scams will help you know who to trust and who to avoid; who is offering valuable information and who is faking it.
Here are a few types of Instagram forex scams:
- Instagram forex trading bots that promise to make you money, but are actually just viruses that steal your passwords.
- Fake Instagram accounts that sell you fake "forex courses" or "forex trading tips". A legitimate forex broker usually offers these resources for free. If you want to check.
- Instagram accounts that impersonate legitimate brokers and trick users into sending money to them. If you want to work with this broker then contact them through the website and check for their legitimacy. Don't send money blindly through links shared on Instagram.
- Shady affiliate marketing websites that claim to be able to help you make money by promoting other people's products.
- Overpromising analysis tools that use false data to give traders an inflated confidence in their trading strategies. Again, if a broker is legit they are most likely sharing these trading tools and signals for free with you rather than charging for it. And they would share the good and the bad analysis not just optimistic data.
Other Types of Forex Scams
As mentioned above, Forex scams on Instagram are not the only trading scams you’ll come across online. Below is a list of general scams you may come across.
Pump-and-dump scam
In this type of scam, a person or group claims they have insider knowledge about an upcoming event—like an upcoming currency crisis—and then shares that information with their followers in order to drive up the price of trading on that currency before cashing out and leaving everyone else holding worthless assets. This type of scam mostly happens in the stock market, specifically low cap stocks that are easier to manipulate. The forex market is too large and too liquid to easily manipulate, but this is a good scam to know about nonetheless.
Fake Margin Accounts
These are fake accounts that claim to be able to give you a margin account and then ask you to send money. They will then disappear, taking your money with them.
Fake Demo Accounts
These are similar to the fake margin accounts, but they ask you to deposit money into their demo account instead of a real one.
Virus Scams
These are scams that use viruses or malware that can damage your computer when downloaded onto it.
How to Avoid Forex Scams
It’s important to do your due diligence before you start trading or giving your bank or credit card info here and there.
Make sure to work with a trusted and certified forex broker, check their online reviews and make sure that you are satisfied. There will always be someone online leaving a negative review after making one bad trading decision and losing some money, so don’t be swayed by a few naysayers. No one is perfect and there are always two sides to a story.
Below are a few more tips on how to avoid getting scammed:
Work with qualified and experienced fund managers and brokers
In truth, many scam fund managers are not the professionals they represent themselves to be. You need to verify the credentials, experience and performance of the fund managers and brokers before moving forward with any trades.
Be Aware of Overvalued Returns Scams
One of the most common scams involves making exorbitant historical returns claims and displaying data that supposedly exceeds market standards to entice investors. Make sure to verify these claims and avoid making investments impulsively.
Read the Fine Print to Avoid Excessive Fees
Investing in a forex fund can be a great avenue to explore for passive income, if you do it right. But there are plenty of scams that have hidden fees that eat away at your account. Even some legitimate brokers can have hidden fees that could cost you money. Before investing, read the fine print to understand what the management fees are, how to withdraw your money from the fund if you desire to, and any potential penalties for doing so too soon. Make sure you're investing in a reputable institution that won't play on your ignorance or greed!
Trading Signals Forex Scams
Trading signals are a great way to get a feel of the market’s direction. Some are generated manually or automatically and use fundamental and technical analysis. Many trading signal providers are legitimate and provide an honest service, but there are some red flags such as claiming that they have unrealistic success rates. Even the best of the best have losing trades and losing streaks.
How To Spot The Red Flags Of A Forex Scammer?
Forex trading can be a very lucrative and profitable venture when done right, and when you have knowledge and experience. But if you don’t know what red flags to look out for you can easily make mistakes or be swindled out of your capital.
Spotting the Forex Scam Red Flags
So you see a post on social media, or a Google ad, or you received an unsolicited email that promotes big gains through online trading. It’s fancy, flashy and professionally made. And you click on the link, and it leads you to an equally fancy, flashy, professionally made website. You think to yourself, “hmm, it looks legit”.
I mean who in their right mind would go through the trouble of creating such an elaborately fancy and professional website just to scam people, right? Well, it’s safe to say that scammers are not exactly in their right mind, at least ethically speaking. And many will go to the ends of the earth and try all sorts of methods to scam people out of their life savings (hello, Tinder Swindler!).
Back to Forex, how do you know if this Forex website is really legit? What red flags do you need to look out for?
How to Spot a Forex Scammer
When checking out the legitimacy of the broker look out for these things:
- The ‘About Us’ section on the website might be profiling the company leadership members. A scammer might use fake images and profiles to build trust.
- Validate the names of the leadership through a Google and Linkedin search and make sure these people are actually working for this company.
- Check out the contact info and addresses of the broker to see if they are valid.
- Is there a telephone number and live chat available on the website? Start talking with them to get a feel of their ethics and company values.
- Verify if the broker is regulated not just by looking for fancy regulatory badges on the website, but by going to the source: your local financial regulator (FCA, CySEC, FSCA).
- Look for reviews of this broker on websites that uncover fraudulent Forex brokers. Keep in mind that startup brokers may not have as many reviews online yet but that doesn't make them illegitimate.
*Spotting a Scammer Disclaimer
- Most brokers don’t have pictures and bios of their management team for security purposes, so don’t let that be a deterrent.
- Some scammers might take actual profiles of forex employers and copy paste them into their fake website to fool you into thinking they’re legit, so having profile pictures and bios on a website does not equal legitimacy.
- Also, Google the phone number to see to whom it belongs. You might be surprised at what shows up in your search.
- When it comes to customer driven reviews, be aware of reviews from angry former traders who want to blame their broker rather than take responsibility for their own lack of strategy and preparation.
Building Your Circle of Trust
Now that you know what to avoid, it's time to build your circle of trust in order to safely trade forex.
- Do your homework and find a legitimate broker that offers 24/7 service, helps you withdraw your earnings, offers valuable and free education resources, and has a good rating and reviews.
- Use tools that are trustworthy that don't make unrealistic claims. A legitimate signals provider will not make such claims.
- Don't send your money to anyone on Instagram. Use legitimate trading platforms and websites that you've vetted and that have a good reputation.
- If you're a beginner, start with a demo account and know that demo accounts will not request money from you.
- Read up on various Forex strategies, rely on educational material that is trustworthy and don't be afraid to ask questions through live chats or phone calls.
How Can You Test If a Broker is Trustworthy?
If you want to give a broker a try and see if they're worthy of your trust, start off with a small amount on your account. Do a bit of trading with them for a month or two and then try requesting to withdraw your earnings and see what happens.
Forex Scams FAQs:
Still want to know more? We’ve collected a few common questions about forex scams and compiled a list of answers to help you know what’s what, so you’re even more equipped to face off those shady forex operators.
How do I know if I am talking to a scammer?
Well, you could try my method. I was approached on Instagram by a would-be trader asking me if I was interested to learn how I could make a fortune trading the forex markets with his help. He asked me what I do for a living and I told him I work for a trading company. One, two, three seconds. Radio silence. He blocked me immediately before I could report him and have his account banned.
What kind of forex scams are on Instagram?
One of the most common Instagram forex scams is when scammers open an account with a legitimate FX/CFD broker and they offer to trade on your behalf to help you make profits, since they allegedly have the knowledge and experience that you don’t have yet. Then they proceed to send you screenshots that have been photoshopped to demonstrate the gains they have achieved on your behalf.
Who is the most trusted Forex broker?
Have a look at the list of broker reviews and see which one is the right fit for you.
We hope that by reading this article you will be better equipped to spot various types of Forex scams. Doing your due diligence before adding money to a trading account will potentially save you from drama down the road.
Trade safely and remember to start slowly, practice on a risk-free demo account and use the right tools to help you make better decisions.
