Avoid fraudulent brokers and remain vigilant with POLYGON DECIPHER

HOW TO SPOT FRAUDULENT FOREX BROKERS

Polygon Decipher News
9 min readApr 12, 2023

The term Forex (FX) is a combination of the words foreign [currency] and exchange. Foreign exchange is the process of converting one currency into another for a variety of purposes, typically for business, trade, or travel. Forex trading, where buyers purchase and trade various currency pairs, is thus a legal activity. Since the foreign exchange market is decentralized, there isn’t a single physical spot where investors can go to purchase or trade their preferred currencies. Decentralization also refers to the fact that authorities or regulators from various areas regulate or oversee the market rather than a single organization or agency. Money is the product exchanged between players in Forex trading. Because of this, money are exchanged in groups. You sell one money when you purchase another, and the opposite is true.

For instance, when you purchase the euro and simultaneously sell the US dollar when you go long on EURUSD, you are hoping that the euro will improve against the US dollar. Although forex has been around for a while as a financial option, it has only recently become broadly accessible to retail traders. There is no requirement to own the asset when trading Forex, which is primarily done by retail buyers. Investors can when they speculate on the shifts in price of financial assets. Leverage is a big draw for buying CFDs. To manage a much bigger stake in the market, dealers only need to deposit a small amount of leverage with their broker. This essentially means that gains from profitable transactions are increased. But this is where leverage can be dangerous because it increases loses on losing transactions. Forex is, therefore, basically a high risk, high reward game.

So why do Forex frauds exist?

Over $6 trillion is exchanged worldwide every day on the forex market, which is by far the biggest financial market in the world. With such a staggering number and the power of leverage, there is always a great chance of making money on the Forex market, though there are also many dangers involved. There are essentially no entrance hurdles for retail traders because technology has democratized the Forex market. Because anyone can start trading immediately, despite the fact that forex trading takes a great deal of knowledge, ability, and experience, vulnerable people are drawn to the chance without fully appreciating the inherent risk. Because Forex is such a huge treasure, unscrupulous businesses try to entice unwary clients by promising them the chance to make a lot of money constantly. They present Forex dealing and the potential for profit as fast and simple processes. Forex schemes will continue to persist as long as there is a profitable forex market. Therefore, it is wise for buyers to be able to recognize and stay away from Forex frauds in all of their forms.

With the advent of fraudulent forex brokers, the need to get yourself equipped with crypto-recovery services such as POLYGON DECIPHER becomes paramount. Especially in this time of technological advancement.

TYPES OF FOREX SCAMS

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There are different types of forex frauds, some of which are more obvious than others. Both traders and other non-broker sites may provide them. The reality that so many services and features accessible today are actually legitimate presents one of the greatest challenges in spotting scams. However, dishonest con artists take advantage of what are typically authentic offers by using trojan horse-style techniques. Here are a few of the typical legal services that con artists frequently abuse:

Forex Mutual Funds (PAMM) Scams

The Percentage Allocation Management Module (PAMM), a legal product that is a great method for investors to participate in a managed fund, is inspired by the conventional hedge fund concept. However, before making an investment, it is crucial to conduct thorough due research. I’ve listed some important elements and warning signs below:

Competent Fund Managers

Establish the credentials and expertise of the investment managers. In reality, many fraudulent funds’ fund administrators are not the qualified experts they represent themselves to be.

Overvalued Returns

Scammers frequently make exorbitant historical returns claims and display figures that greatly surpass market standards to entice investors. Make sure to verify these promises and avoid making investments impulsively.

Outrageous Management Fees

Fees are quite common, but before buying, read the “fine print” to understand what they are, how to withdraw money from the fund if you choose to, and any potential fines for doing so too soon.

Scam with EA/Trading Robots

Trading robots and EA (Expert Advisor) components are frequently offered as value-added services by reputable firms and are capable automatic trading tools. Investors need to be aware that trading platforms only handle human trading strategies. Although there are advantages to automation, making limitless earnings is not one of them. Unfortunately, there are con artists who provide services that are not what they promise to be. Important things to take into account when assessing automatic trading options include:

Limitless Profit Promises

Scammers will make claims like “guaranteed profits” or “churn out endless profits from the markets round the clock.” This is simply untrue, and not even the best solutions with the best reputations can guarantee precision that is 100% accurate or even near to it.

Exceptional trading tools and a small number of “recommended” providers

This is a common con where buyers are given free software or are sold it in exchange for a payment with a broker who has been “recommended.” The objective of the con artist is to entice gullible investors with unfulfilled promises in order to earn a fee from recommending new clients to a broker.

Analytical forex fraud methods and prevention by POLYGON DECIPHER

Trading Signals Forex Scams

Trading signals give dealers trade recommendations or ideas that will enable them to profit from market chances. Signals can be produced directly or mechanically by people, organizations, or both. To produce trading indications, they can use either technical analysis, economic analysis, or both. There are many reliable signal services, but there are also fraud deals and important red flags to watch out for:

Inflated Accuracy

Claims like “90%+ accuracy” should immediately raise red flags. This degree of accuracy is beyond the capabilities of even the finest traders and technology. You can actually compare their prior signals to past market statistics with a little research.

Free Signals with ‘recommended’ brokers

When you join up and make a payment with the broker they suggest, introducing brokers and associates who are paid a fee by recommending new customers to a broker will frequently claim to be able to give you Free Signals.

Now aside from the above mentioned hoaxes, cryptocurrency recovery experts at POLYGON DECIPHER, after analytical research, discovered pure scams carried out by fake forex brokers. If you have unfortunately, been a victim of these scams, reach out to POLYGON DECIPHER for immediate assistance. These identified forex scams include:

“Holy Grail” Forex Scams

Scammers are aware that finding and seizing the best trading chances on the market is the most challenging aspect of the complete trading activity. When naive investors find the “holy grail” trading strategy that will drain profits from the market 24 hours a day, seven days a week, they think they will be on the road to unlimited wealth. Any advertisement for trading software or a business that promises to have the “holy grail” trading system that will protect you from market loses is a scam and ought to be avoided at all costs.

Guaranteed Returns Scams

Even though this is probably the least covert scheme, it still attracts victims. Investors are urged to sign up for a service or business that trades the forex market in this scheme in exchange for the promise of regular, set earnings. Given how quick and lively the forex market is, this is a complete fraud. Forex dealing involves both gains and loses, neither of which can be predicted. It is essentially impossible to produce earnings on the market that are assured. There is no plan that is foolproof and won’t result in some losing transactions, and anyone who guarantees earnings from the Forex market is just trying to rob you of your money.

FOREX BROKER SCAM TECHNIQUES

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The scary thing about Forex scams is that they can also be perpetrated by some Forex brokers. Here are some of the most popular scams around:

Price Manipulation

The scheme that con artists use the most is this one. Some firms intentionally manipulate their trading tools to the detriment of users. Negative slippage, where entrance and exit orders are filled at rates unfavorable to the transaction, is one possible manifestation of this. For instance, a purchase order is completed at a much higher price, which reduces, if at all possible, the potential earnings from the transaction. Additionally, there is “stop hunting,” in which the dealer tries to eliminate the investor-applied stop loss before moving on to broadcast the accurate values. In essence, price manipulation will cause buyers to place negative transactions.

Extraordinary high leverage

In CFD dealing, leverage is a fantastic invention. But power always has two sides to it. Profits from profitable trades can be substantial, but loses from losing deals can also be substantial. Some traders guarantee clients exceptionally high leverage ratios of up to 2000:1 in an effort to entice them with claims of large earnings, but market risks can cause a single losing transaction to wipe out the majority of a trader’s margin.

Bank Accounts of Unsegregated Clients

Scam traders frequently manage a single bank account for both the funds of their customers and their own operating funds. This implies that they will be more inclined to look for methods to fund activities with client money when funds on their accounts are running low. This is a very poor business practice, and if the broker is unable to pay their debts, your money will be linked to theirs and might even be taken by their debtors.

Fake promotions and bonuses

Bonuses and promos are frequently provided by dealers, even trustworthy ones. Brokers who are registered and licensed must make sure that any bonuses and promos they offer adhere to legal requirements and don’t “lock” the dealer. However, some dishonest agents entice investors with misleading promos that have onerous or completely unreachable terms and conditions. This implies that their investors will almost never be able to withdraw any gains before they lose their trading money. It’s undoubtedly true if something sounds too wonderful to be true.

Personal Data Scam

You will be needed to provide some of your private and confidential information when joining up with a brokerage company, as well as potentially payment information like credit card numbers. To ensure that your data is kept private and is never shared with or sold to a third party, a legitimate and authorized broker is needed to implement the necessary security measures. Scam brokers might not take the required security measures or, worse yet, they might transfer your information to a third party. These third parties might start approaching you with offers you haven’t chosen to receive or sending you unwanted emails. Innocent buyers may sustain losses as a result of identity fraud and the sale of personal information.

Avoiding Broker Scams

In comparison to other schemes, broker frauds are more cunning and damaging. A business that ought to be your dealing associate might turn out to be your worst enemy. It is crucial to be able to spot them and stay away from them entirely. ASIC, FSCA, FSA, FFAJ, and other respectable organizations’ supervision is the first stage in spotting a reliable broker. Brokers who are subject to regulation are required to manage separated bank accounts for customer funds that are distinct from their working capital accounts. Additionally, their platforms are randomly checked to make sure they are always providing customers with transparent dealing services.

Critically Analyzed Hedging Policy

Regulators also make sure that dealers don’t make unsupported promises or employ questionable marketing strategies. Investors also have some redress against a third-party organization whose sole responsibility it is to safeguard investors in the event of a dispute. Investors should study reviews from reputable websites online in addition to the law, where they can learn about other traders’ actual experiences. Numerous review websites also carefully examine grievances as well as security and safety concerns, such as KYC procedures and website protection requirements. At all costs, stay away from dealers who can’t show you their qualifications. You want your account to be managed by someone you can trust. To determine whether a forex broker is in good legal status on the foreign exchange market, do your research and look into any relevant regulatory organizations.

To prevent falling for a foreign exchange dealing scam, it is advised to work with a regulated broker who has a solid name, an impeccable track record, and favorable feedback from previous and current clients. Although it can be difficult to resist the allure of fast profits, it is best to err on the side of prudence and conduct a more comprehensive due diligence.

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Polygon Decipher News
Polygon Decipher News

Written by Polygon Decipher News

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