3 signs of a forex trading scam

Posted at 08/31/2014 3:24 PM

MANILA, Philippines – Forex trading investors are being warned against scams that lure in investors only to rip them off of their hard-earned money.

Financial adviser Salve Duplito said here are three signs that investors are getting into a forex trading scam:

  • High fees for seminars and high commission fees.
  • Brokers are promising guaranteed returns.
  • The company is registered in tax havens like New Zealand and Indonesia.

Forex trading investors are also warned against automated forex trading systems sold on the internet.

Justin Jung, chief executive officer of MetisEtrade, recommends that investors should instead create their own system or at least test the systems on a simulation account first.

“A lot of this automated trading systems are programs that calculate price volatility and velocity, and the decision to enter or exit based on the market price movement. In the hedge fund industry, that is called the black box system, because we do not disclose what the system is about to anyone,” he said on ANC’s “On The Money.”

In MetisEtrade, this black box system is developed by three experts in different parts of the world.

Jung said once this black box system is open to the public, opportunity disappears.

Jung also noted that most of these forex trading tools promise a secret formula but are being sold to everyone, which begs the question: If these people really know the secret formula, why are they selling it for $4,000 instead of keeping the trillions to themselves?

He said that legit forex trading operations are also being hurt by scammers who claim they can teach people how to earn millions in forex trading.

“I told my employees, if you come here thinking that I’m going to teach you the trading secret that can make you a millionaire, you’re wrong. I cannot give you that. I don’t think Manny Pacquiao can make someone to be a world champion. They can teach them the way to train and the discipline. But they cannot make them a champion. Same way, no market expert can make other people the expert in trading. They can only give guidelines, more than 90 percent should be done by yourself,” he said.