Currency trading scams have been around as long as trading but there has been an upsurge in them in recent years, with the rise of internet currency trading which has opened up currency markets to anyone and these new, naïve and greedy traders, are easy prey for currency trading scams. Here we will look at the most common and how to spot them.

If you want to trade currencies, you want to make money and the the first scam we will look at is the most popular with novice traders – Forex robots and automated currency trading software

The Fantasy World of Forex Robot Scams

Wouldn't it be nice to pay a hundred dollars or so and get an income for life? No more worrying about the bills simply plug your robot in and make thousands of percent per annum, you will experience little or no drawdown and live the good life – Sounds to good to be true? Of course it is! Let's look at some common claims made by robot vendors which are obvious lies.

The System can Predict Forex Prices in Advance with 75% - 100% Accuracy!

This is a simple lie – no one can predict the future with accuracy and the percentage of winning trades claimed, would make the super traders in Currency trading like George Soros, Jimmy Rogers ETC look like amateurs.

You can Make a Regular Monthly Income

No you can't, sure you win long term but some robots tell you can make x pips day and you can ever do that. Even the best currency traders will have weeks or months when they lose, its just the nature of trading currency markets.

You can Make 100% Plus Gains with Less than 1% Drawdown

If you trade for big gains you will have drawdown, even the best traders in the world do. If you have a currency trading system which makes a 100% gain, the draw down before a new peak in equity is hit is likely to be, between 25 – 50% and the drawdown period will last between a few weeks and few months

The Reality – Spotting the Scam

The claims above are all made and a track record of profits is presented to justify the figures - but look closely at any of the Forex robot scam track records and you will see they haven't actually got any proof they made any money! Typically, the robots present track records which are not real trading and the most common are listed below.

The Track Record is a Simulation Going Backwards

The vast majority of Forex robot scams make up track records in hindsight They simply, bend the system to fit the price history and any trading system can make money if you do this – it's so easy a child can do it.

The Vendor Presents their Results

The problem with this is obvious – you have to take the word of the vendor but you already know he has made comments about currency trading which are impossible, due to the nature of trading.

Avoid the Scam no Matter How Tempting

To tempt traders to just try the system ( even though they are sceptical about the figures) the vendor will offer a free money back guarantee so you have nothing to lose because they give you your money back if not satisfied but try and get the money back and in most instances you will struggle and either not get it, have handling fees deducted or have small print shown to you that invalidates the guarantee.

In Forex trading you can make money but don't let greed get the better of your common sense. If you could really make money so easily as the Forex robot scams tell you 95% of traders wouldn't lose money and everyone would be trading for a living.

Final Words

You can get some good solid Forex trading systems and the key to finding them is to look for a real time track record which has been substantiated by audited statements by an accountant or live tracking by a reputable Forex rating agency.

If you have read and understood this article, you can avoid Forex robot scams and find a trading system which can help make your currency trading strategy profitable over the long term..