The rise of technology has paved the way for many things that used to seem impossible to be possible and have now become normal for us. Since social media entered the scene, our digital experiences are becoming more diverse, modern, and convenient. That includes being able to do almost everything, including managing business transactions, financial trading and more.
Though technology and the internet come with many advantages and conveniences, many people, unfortunately, take advantage of them in negative ways. One is using scam tactics to trick people into spending their money. Since many financial services and activities are now available online, it’s easier for scammers to appeal to their target audience. It is evident specifically in rising and famous financial services like forex trading.
Forex trading has become one of the financial activities that many people around the world love. Because of the rise of the internet, its popularity rose effortlessly. Today, even banks play a significant role in providing services to support the forex market. Indeed, forex trading is slowly becoming the preferred investment activity of many. Because of this, scams in the forex market have become apparent. If you’re unfamiliar with the market, it’s hard to differentiate trading platform scams from legitimate ones.
If you’re considering entering the market or starting trading, here are seven signs to help you identify if the platform you’re using is a scam.
1 – The platform is imitating the name of famous trading platforms
Some of the recommended platforms of many professional forex traders are the cTrader trading platform, MetaTrader 4, and MetaTrader 5 platforms. Aside from these three, veteran traders use many other reliable, efficient, and secure platforms. However, if you’re new to the market, these three are the best options because they’re tried and tested by many.
Many trading platform names are related to trading. However, many scams imitate the brand names of famous platforms or use ones that are similar to those to confuse people. Some might use the name “cTraders” to confuse forex newbies to register to their site. That’s why before you start trading with a platform, ensure it’s not a copycat or “wanna-be” of a famous platform brand.
2 – Their brand marketing is too unrealistic
Even though forex has become a popular trading service, many still view the market negatively. Usually, it’s because of the negative experiences they had with forex trading. One of the reasons people have negative experiences is that they enter the market with false expectations about trading.
Sadly, even legitimate trading platforms market forex unrealistically. However, many scammers also use that marketing strategy to entice people to join them. The thing is, most of the “miracle profits” that other people market are not real. People must understand that the forex market is not a miracle money-growing platform. Understand that the only way to earn a profit in the market is by learning trading skills, monitoring market performance, and creating a strategic plan to trade better.
3 – They require starting fees to open an account with them
Another sign that the trading platform could be a scam is if they mandate “starting fees” to open an account. According to Investopedia, most trading platforms only require a minimum of $250 to $500, depending on the platform’s guidelines. Most legitimate and trustworthy platforms would never ask you to pay a starting fee to open a mini-trading account.
Of course, there are exceptions to this. Some legitimate platforms might ask for fees for platform maintenance to cover other inclusions in opening an account with them. But in most cases, trading platforms rarely require their traders to do so. That’s why you must be careful of this tactic.
4 – They require fees for beginners to use their demo accounts
cTrader and MetaTrader platforms offer demo accounts before trying live trading for their traders. Most trading companies that use cTrader and MetaTrader 4 and 5 software also offer “demo accounts” to new traders to help them navigate the platform before they start spending money.
The best part about demo accounts is that they’re free of charge. If the trading platform you’re using demands fees for traders to use demo accounts, it’s best to ask why before starting. In most cases, it could be a tactic for scammers to also ask for your confidential financial details like a credit card, bank account, and more.
5 – They don’t accept credit cards, wire transfers, or online checks to fund your Forex account
Another sign that the platform you’re using is a scam is they don’t accept credit cards, wire transfers, or online checks like typical platforms do. Usually, there are also trading platform scams that still allow credit cards, wire transfers, and online checks. However, some are very particular with their payment method to secure and limit the sources of the funds they’re receiving.
Some also only accept cash payments to avoid tracking their “scam receiver account.” It’s rare for trading platforms to require a specific payment method because most want their trading services to be accessible and convenient to everyone. If the platform you plan to use doesn’t accept the typical payment methods other platforms use, it could be a sign.
6 – Their currency pairs options are limited
One of the best things about the forex market is the wide range of currency pairs you can trade and choose from. Most, if not all, trading platforms offer many currency options, including various major, minor, and exotic pairs. It could be a sign that the platform you’re considering is a scam if it only offers limited currency pairs to trade.
But similar to the past signs I discussed, there could be exceptions. There are developing and starting trading platforms that may only offer limited currency pairs if they’re still improving and working on their system. However, it’s rare for operating platforms to do so because traders should have a wide range of options for the pairs they can trade in the market.
7 – Their market charts and data are not up-to-date
Lastly, their market charts and data aren’t updated. It’s important to understand that the target market of scammers is beginners and newbies to the forex market. Most of them don’t make the effort to use market charts and data that seem real because they’re targeting newbies.
That’s why before you start or try a trading platform, make sure to learn and educate yourself about the forex market’s data charts so you can tell if the platform you’re using is reliable.
It’s best to start trading with platforms that professional traders recommend.
I know it can be enticing to start trading on a platform that only a few are using. However, if you’re just starting, it’s best to start with platforms that many professional traders recommend. Why? Because you’re less likely to encounter and deal with scams. Also, it will be easier to access and look for tips about those platforms because many have already tried and are using them for trading.
About the author:
Bianca Banda writes informative trading data, tips, and strategies about the forex market. She highly recommends trading with FP Markets–the industry’s most efficient, reliable, and trusted broker by many.