According to the report of April 2019, every day almost $6.6 trillion is traders in the spot Forex market including futures and currency options. Forex trading is not a smooth profession as the market is much unregulated which makes this market very risky, there are some other risks like lots of scams going around this market which will lure you to follow them and as a result, you hurt yourself without understanding anything. Many CFD traders are always trying to lure you to follow their scam so that they can rob you fairly and you cannot do anything against them. Once there were very popular scams but by the help of the Commodity Futures Trading Commission (CFTC) and the Self –regulatory National Future Association (NFA) which is formed in 1982 helped to remove this scams but still, there are few left and everyday new scams are being introduced which cannot be removed so easily. In this article, we are going to talk about a few popular CFD trading scams which still exist so that you can be alert and can stay away from them.
The point spread scam
This was a popular scam in back in days and this does not exist now. It was based on computer manipulation which used to manipulate the bid and ask spread. Spreads usually reflect the commitment of the transaction but this amount is not the same for all currency pairs. But back in days, this scam was that these spreads were widely different between different brokers but for the same currency pairs. Now no matter which broker you are using then you will see the same amount of spread for the same currency pair in every broker and if you any brokers show different then you must not use that broker for trading. This scam helps the scammers to earn a few pips from your trades no matter you are having a loss of profit.
Being naïve trader in CFD market, you should be looking for the best broker like Saxo. It will give you the confidence to take trades in a precise way to earn more money.
The signal seller scam
It is the most common scam nowadays. Signal selling is not forbidden work but there are lots of firms that offer to give you potential signals daily, weekly, or months with a small fee. This firm hires lots of experienced traders and lures you by showing their lifestyle and account balance. But few firms show these things and collect money from you for giving you an offer. Many of them just flew away with your money by giving you a few trades and disappear no matter you make money from those trades or not. Some will give you a signal now and then without any consistency and slowly it becomes a wider problem. A signal seller can be much experienced and they might provide you good signal but you can’t get the same price as he mentions to open a position and the time you open your trading platform to open that position in the market, the market can change its way and you might end up losing your money.
There are lots of companies that develop robotic software which can help you to trade according to your trading strategy. So no matter you are sleeping or hanging out with your friends and you don’t need to bother about the market and opening position because these robots will do that for you. There are coded with few conditions and some trading strategies so if the market full fill those they and close position. But if you prefer this then it is nothing but gambling and there will be time if the codes and parameters are invalid then these robots will open and close positions randomly which will result in you losing your trading balance.
There is lots of tested auto Forex trading system but we suggest you never use any of them no matter how good it looks.
Traders often fall for this type of scams because of a lack of confidence in their analysis. So make a strategy and try to trade with your trading account until you are confident enough on your strategy and analysis.