The internet has become a fertile landscape for various trading scams. These schemes take a variety of forms, from cryptocurrency offerings to foreign exchange trading to contracts for difference, and more. What do crypto, forex, and CFD fraud all have in common? We lay out the common warning signs of a trading scam in this article.
Some scams are easy to spot. Once you’ve learned about the Nigerian Prince scam, you’re likely to be wary of anyone asking for your help to transfer a lot of money, whether or not they claim to be a prince. The problem with scams like forex fraud is that they imitate a legitimate trading option. They’re not as obvious about their scammy nature as an email from fake royalty.
All forms of trading fraud draw on what people know about the world of trading. We know that some people get rich off of it. We know that it can be risky. We know that it takes strategy. Scammers take all of that and they skew it ever so slightly, to make a story that seems plausible. They promise to sell you on a secret of how to trade with little or no risk. They have a strategy that guarantees returns. They promise you all of the good (playing the market to your advantage and making your money work for you) and none of the bad (risk of loss, hours spent studying the market and making trades).
If someone promises you a trading opportunity and uses phrases like “no risk” and “guaranteed returns”, you might have a moment where you think “this is too good to be true.” Listen to that inner voice! Generally, if something seems unbelievable, it’s because you’re not getting the whole truth.
Almost every crypto scam and CFD fraud relies on the fact that most people don’t have familiarity with these markets. Especially when it comes to crypto, scammers rely on bitcoin’s meteoric rise to create the illusion that their cryptocurrency will do the same thing. But even with CFD and forex, scammers can cherry-pick examples of real traders who have made a fortune, and convince you that you can have the same success, but with less effort.
CFD, crypto, and forex scammers all try to sell you the same idea: that you can make lots of money, with little risk and little work. But that’s not how it works. You can’t have a method that 1. makes lots of money and 2. is risk-free and 3. is easy. Most legitimate trading systems only have one of those attributes. Some might have two. But no matter what, all traders have to come up with a strategy that balances gains, risk, and time spent.
You can use an automated trading system that is set to run with minimal input from you, and you can set the risk threshold for the program to be very low. With such a system, you can expect to make some gains, but they’ll be minimal. The system won’t take any big risks, which means no big rewards.
Never trust anyone who tells you that you can make big money with a small monetary investment and no time investment.
If you’ve already fallen victim to crypto, forex, or CFD fraud, contact Claim Justice today. We can get your money back from scammers.