Trading scams:How you can spot and avoid it in 2021

trading scams

Consumers in the UK are more and more the targets of unregulated forex trading firms offering opportunities in trade in foreign exchange, binary options, crypto assets, CFDs, and other commodities. Promising astronomically high returns and guaranteed profits, these scammers try to lure you into risking your money into an investment that shall never profit. In addition, trading scams promise passive income on the side and an insane amount of financial freedom. 

Legit forex traders 

The focus of new investors ought to be legit forex brokers and, by extension, legit forex traders. There are a number of guidelines that let you know how best to ensure the brokers you are following are legitimate. First, there’s the FCA Warning List. The caveat in this case is that not all online brokerages are FCA regulated. Those scammers trying to come across as FCA approved but failing nevertheless are listed in the FCA Warning List. The FX market may be apparently without regulation in its decentralization. Scammers like to think if the trading is instant with no apparent immediate oversight from an overarching body, no apparent tangible accountability – they are still deluding themselves into trading scams. 

Scammers and their successive generations can always be brought to book. There are regulatory mechanisms across the world. The FCA secures the UK end. Easy riches promised in the span of a few months are the sort of ruse an enlightened client in the Online Age would be really daft to fall for. Yet, unfortunately, some do keep on falling – hook, line, and sinker. Which is what encourages cautionary tales such as this piece.

PS: Top Legit Forex brokers

Forex signals trading scams 

The signal seller is a widespread, commonplace enough trading scams plaguing our country now and then. When retail firms, managed account companies, pooled asset managers, and individual traders offer dubious systems , claiming the capacity to point out the most appropriate times to buy/sell an FX pair based on announcements declaring wealth. These signal sellers hold up their experience and abilities, in addition to glowing testimonials. For the privilege of trade recommendations, the dewy-eyed trader has only to hand over a not inconsiderable amount to the signal seller. 

The simplest modus operandi thus aimed at the simpleminded simply involves the signal seller collecting money from all the wide-eyed investors – and vanishing. Others keep investors perpetually on a leash – releasing a good signal only occasionally. The rest of the time, investors’ money keeps disappearing into a maw where there’s no accountability. 

Though there’s no reason why some signal sellers cannot be honest. However, there are so many that are suspect that it pays to be sceptical.

Forex trading pyramid scheme, or legit forex trading? 

Sinking their nefarious devices into the forever-going forex gaze powered by multi-level marketing schemes, the novice trader is pulled into investments he can never see become profitable. 

The way pyramid aches are introduced to us and their basic premise is all innocuous enough. But starting from simple promises and quoting legit-sounding current investment gurus, the schemes frequently move swiftly to coaxing, cajoling all too persuasively. The professed aim of the scheme is allowed to vanish – in this case, trading forex. On the other hand, there’s growing emphasis on participants increasingly being asked to join a multi-level marketing scheme.

You are simply drawn in by the lure of lucre – in this case, the earning of affiliate commission under a pyramid structure. Rather than develop insight into trading forex, you are pushed into recruiting new members. They, too, will invest in this ‘pyramid scheme’ just the way you do. But the actual nature of the scheme will never be clearly stated. 

Forex trading and brokerages taking to trading scams 

Not infrequently, some clients report that, in the first few fine months, their new broker was helping them to fruitful trades, successively. There appears in this time to be a conscious effort to lull the intended victims into a false sense of complacency. Satisfied by the first successions of successful trades, the new client traders of the newly-discovered brokerage believe all operations are transparent and efficient. They have , so far, little reason to raise a ruckus.

Then, the clients are asked to deposit more funds at some opportune instant planned by the dubious brokerage. Naturally, the unwary client traders are more than happy to oblige – thinking of more juicy returns in the offing. However, they have the shock of their lives when there’s a sudden hush, followed by total silence from the other end. Repeated calls for responsiveness are met with a stony silence. The ostensibly UK located, FCA regulated brokerage has disappeared. There’s not a blip on the radar.  

Give clone firms a wide berth 

A good many dubious brokerages and bogus trading firms will use the name, The firm registration number, and the address of the FCA regulated firm to lure into trading scams. This is all to steal legitimacy. The clone firm then makes certain changes, such as phone numbers, stating that these details are being updated since older details are outdated. In addition, clone firms may successfully pose as overseas firms, making tracking them down that much more difficult. 

It is entirely possible to copy the essentials of a well-known firm’s website, making changes in it, trying to pass it on as the real McCoy. 

Ways to protect yourself from trading scams 

Firstly, you should consult the FCA register to see if the new brokerage you are trucking with is indeed the real deal. Furthermore, there’s the FCA Warning List detailing the names and particulars of dubious entities. Finally, in case the firm sends indistinct replies to your queries, you can still check up their credentials with the FCA’s Consumer Helpline on 0800 111 6768. 

In case a firm has offered you an investment , desist from clicking any link on their emails or website. Rather, ask for their Firm Reference Number, or FRN, and contact details. Then, you should call them back on the registered switchboard number. 

Another tell-tale sign of a trading scams is a hurried rush from the firm, trying to push you into an investment without allowing for sufficient time to think things through. Such unwonted urgency , especially in the case of an investment, signifies an illicit agenda on the firm’s part. 


The country is, by and large, very self-aware. If someone’s not that fast on the uptake, there’s naught to fear! There are many official and voluntary agencies looking out for your interest. MoneyHelper and Action Fraud are just two instances. Then there’s the PIMFA in case you need financial advice. Legit forex traders need not follow pyramid schemes since Forex is too important a field to be lost to juvenile multi-level marketing schemes. Not to disparage legit pyramid schemes – but Forex schemes are best without the trappings of multi-level trading scams. 

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