What are signal seller scams?
Many traders rely on seller signals. They indicate what the financial markets are doing and are the best tool the market has for making accurate forecasts about future trading performance. It is now possible for traders to purchase information products that contain purportedly useful indicators of which way to trade. This is something scammers take advantage of. Some scammers create a series of falsified signals, which look authoritative, but in fact take a trader down the wrong path in a way that is lucrative only for the broker. So how can you avoid Forex signal scams?
The basics of signal seller scams
As a result of the strong market demand for signals, forex investors need to ensure that they are not falling victim to a type of fraud known as a ‘signal selling scams’. This type of fraud is made possible thanks to the increased distribution of misinformation and technological advancement. This article will explore the risks from a forex signal seller scam and share some top tips on how to reduce the likelihood that this will occur.
A wide demographic of trader can fall victim to this particular brand of forex scam and it is unwise for any trader to assume that they are immune. Those who have been in the foreign exchange world for a long time will have a greater understanding of what information is legitimate and what is not. The most vulnerable, however, are those who don’t have much forex experience. Traders who have just started out at the very bottom of the forex-trading ladder may be open to taking more risks, leaving themselves exposed.
There’s no one set way for a signal selling scammer and a potential victim to come into contact, but there are certainly some popular routes. A fraudulent organisation selling signal information will likely set up a website, which it may list and advertise online as a seemingly legitimate source for forex tips. Alternatively, it may find its customers through a social media platform such as Instagram, and even showcase the lifestyle that a trader can acquire by using the signal service.
Once a scammer has located a potential victim, often, the next step is for them to persuade the customer to sign up to the service and pay a significant monthly or weekly fee for its use. Through technical or fundamental analysis, a seasoned trader will likely be able to tell the quality of signals generated by the organisation. However, a new trader might not. As a result, the new trader is likely to be more vulnerable to the organisation’s lure.
One common hallmark of a signal selling scam is the creation of conditions in which the trader assumes that a system’s past successes are an indication of its worth. Scam artists in this field use this to prey on vulnerable traders and produce statistics that show the supposed ongoing successes of a system. However, there’s no guarantee that these successes will remain in force for the long term — if there’s no disclaimer to this effect published on the organisation’s page, there’s a good chance that this is a red flag and that the provider ought not to be trusted.
How can you avoid this scam?
Signal information products are certainly not essential. There are plenty of self-teaching tutorials available. The critical aspect here is whether or not a trader is willing to invest the time to build up their knowledge and awareness.
It is also worth reading reviews of your preferred provider. If a signal provider has been around for a long time, it will likely have some positive reviews of its services on the web. These shouldn’t be too difficult to track down with a simple Google search.
Signal selling happens to be a legitimate enterprise, and this is one of the main reasons why many investors get caught out. There are organisations out there that are genuine, which provide useful and legitimate information. Indeed, this can create a confusing situation. Unlike many other forms of forex scams, forex signal seller scams are a little more difficult to spot because there are worthwhile, non-fraudulent providers in the mix.
As a trader, the best thing to do when it comes to preventing signal selling scams is to ensure that you approach it with the right attitude.
A sure-fire way for a trader to reduce the risk of a signal seller scam is to question and scrutinise every trading opportunity and work out whose interest it truly benefits. In the specific case of avoiding a signal seller scam, choosing to use price charts to perform personal signal analysis rather than relying on an external provider is a good alternative. It is also worthwhile to research potential signal providers to ensure they are genuine and at the higher end of the market. Looking at provider websites is one method of ascertaining legitimacy — another is to read and assess online provider reviews.
In the end, it is down to the individual trader to work out just how valuable the signal selling service is to them. Signal selling services and the results they propose are by no means guaranteed or reliable — there’s no such thing as a crystal ball. Provided a trader has built up the prior knowledge and has conducted as much research as possible, the choice of provider is theirs to make.