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Intro to Forex Trading Scams

Steven Hatzakis

Written by Steven Hatzakis
Edited by John Bringans
Fact-checked by Joey Shadeck

March 05, 2024

With the arrival of advanced technology and the ubiquity of social media in our lives, forex scams have become increasingly difficult to detect – even for experienced investors and active traders.

Scammers target a wide range of desirable asset classes, such as forex, CFDs, crypto, and stocks. The forex market is an appealing target due to its sheer size and the staggering amount of money being traded. According to the Bank of International Settlements (BIS), turnover in the global over-the-counter forex markets reached $7.5 trillion per day in April 2022.

Forex trading scams have the potential to cause significant financial and emotional harm, and there is often little that can be done once you’ve been victimized by a scam. Early detection is your best defense.

The good news: I have extensive experience with the forex market and forex scams; I’ve been covering the forex industry for over twenty years. I’ve written this series of educational guides to help traders proactively recognize the early warning signs of forex scams and, hopefully, avoid scams altogether.

What are forex trading scams?

Forex trading scams can take many forms, but they all share the same basic purpose: to steal money from unsuspecting forex traders. Forex scams can involve selling products that don’t perform as advertised, impersonating notable forex traders or investors to collect personal information, setting up sham websites that imitate big-name brokers to steal deposits, and a long list of other unethical and (in many cases) illegal methods of robbing traders and investors.

Top three signs you might be dealing with a forex scam

Forex trading scams might masquerade as a broker, an educator selling a trading course, a money manager offering their services, a developer selling software, or even an event organizer. The wide variety of the types of forex scams can be overwhelming, but there is a handful of common signs that can indicate you are dealing with a scam.

Here are my Top 3 warning signs to look out for when identifying scams in the forex market:

1. Unbalanced claims

Scammers will try to promise you the moon. They’ll claim that they can guarantee trading success and assure large profits – all while downplaying any associated risk. This might be the ultimate indication that you are dealing with a scam: Trustworthy brokers do not make unbalanced claims, and will never make profit guarantees.

2. Requests for money

Scammers will often ask you to send them money (or in some cases, cryptocurrencies like bitcoin). These requests are often fueled by an artificial sense of urgency created by high-pressure sales tactics. Reliable, highly regulated brokers will never pressure you into making a deposit until you are ready to do so.

3. Lifestyle pictures or testimonials from “successful” traders

These portrayals often glorify a fantastical “trader’s lifestyle” complete with fancy cars, private jets, yachts, and other stereotypical displays of wealth. Genuine brokers share content focusing on technical and fundamental analysis, market research, and trader education – not on the flashy lifestyles of “successful” traders. Check out my guide to the best free forex trading courses to find free, legitimate forex educational resources.


Sophisticated forex scammers will do their best to avoid committing these warning signs. If you are doubting the legitimacy of your forex broker, take the extra step to verify their regulatory status.

Types of common forex scams

The best way to protect yourself from forex scams is to detect them early, and then steer clear. If you can recognize the signs of the most common forex scams, then you’ll have a better chance of avoiding them altogether.

In my 20+ years of covering the forex industry, I’ve witnessed a wide range of forex scams and spoken with countless victims. Below, you can find my list of the most common types of forex scams – keep your eyes open for these:

1. Unregulated (or lightly regulated) forex brokers.

These “brokers” are usually regulated offshore in disreputable jurisdictions that often just require a business license and some kind of fee. If your broker lacks legitimate regulation, there is always a chance that it engages in questionable (or outright fraudulent) practices.

Unregulated brokers do not have to report to a governing body, and you often have no recourse for recovering funds if you’ve been targeted by a scam. I would never recommend dealing with an unlicensed (or lightly regulated) forex broker.

In some cases, brokers will simply lie about where they are headquartered, registered, or licensed. For instance, the FCA recently announced that Unicorn FX was operating in the U.K. without proper authorisation. Notice the misspelled words and the unbalanced claims of "higher returns" in the image below:

Unauthorised potential scam broker Unicornfxlive.

The Financial and Consumers Services Commission (FCSC) of New Brunswick in Canada also recently posted a warning about a New York-based firm that was targeting Canadian forex traders without the required regulatory license.

FSCS posted warning of Fidelity Citadel clone potential scam.

emoji_peoplePro tip:

In my 20+ years covering the forex industry, I’ve found that the most important thing you can do to protect yourself from forex scams is to make sure your forex broker is properly licensed by regulators in reputable jurisdictions.

2. Binary options.

Widely considered akin to gambling, binary options are essentially an “all-or-nothing” bet on the outcome of an event (such as a timed price movement of an asset). A 2019 survey conducted by the Australian Securities & Investments Commission (ASIC) found that 80% of binary options traders lost their money. A Tier-1 regulatory jurisdiction in the Trust Score rating system, ASIC has since banned binary options until 2031. Here is a great example from the CFTC of a binary options broker scam.

announcementMore on binary options

Check out my guide to binary options to learn more about why I think binary options is more like gambling than investing, and why you should avoid this risky investment type.

3. Clone firms.

Scammers will sometimes disguise themselves by impersonating real brands (or in some cases, real people). Known as clone firms, these “companies” use spoofed emails, fake websites, and illegitimate phone calls to hoodwink victims into believing they are conducting business with a reputable brand. Legitimate, licensed firms should be easy to contact and have a verifiable, legitimate headquarters address.

4. Social media scams and imposters.

Social media has made it easier than ever to lure unsuspecting traders into financial scams. Forex scams can now lift photos and personal information from the social media accounts of high-profile traders, investors, and businesses, and use them to create imposter accounts on Twitter, Instagram, TikTok, YouTube, Facebook, and all major social media platforms.

I’ve been impersonated countless times across multiple social media platforms. Scammers have used (and continue to use) my name and likeness to get people to send them money or participate in forex scams. Some of these fake accounts even have thousands of followers. In the gallery below, you'll see some examples of scammers pretending to be me, and also falsely claiming to be affiliated with's sister site,

mailPro tip:

If you have been contacted by an investor’s social media account and you doubt its authenticity, ask them to email you from an official email account at a verifiable company or institution.

5. Scam signal providers.

Usually appearing in forums across the internet, scam trading signals typically make unbalanced claims regarding your potential profits and try to get you to pay a subscription (usually charging per day, week, or month) for access to the signals. That said, not all signal providers are scams – read our guide to the best forex signal providers to check out highly rated, legitimate forex brokers that offer trading signals.

6. Scam fund managers.

A scam fund manager, financial advisor, or commodity trading advisor (CTA) may do a large number of trades (or a few massive ones) with the sole purpose of creating more commissions for themselves – this is a process known as churning. Churning can lead to large losses for you, while your money manager makes off with a hefty commission.


Scammers will always put their interests ahead of your own in their attempt to separate you from your money, either by outright theft or a slow churn of your account over time.

7. Scam copy trading providers.

Scam copy trading providers will simply generate too many signals with the purpose of churning your account and earning commissions at your expense. Genuine social copy trading providers should have a viable trading plan – check out our social copy trading guide to see my picks for the best, most trusted forex brokers for social copy trading.

How do I know if a trader or broker is legit?

Legitimate forex brokers will hold licenses from reputable regulatory jurisdictions. The best, most trustworthy forex brokers often hold multiple licenses across jurisdictions around the world. Most top-tier regulators provide a fairly simple online process for verifying a firm’s regulatory status. In my video below, I walk you through the process of verifying a broker’s license with the Australian Securities & Investment Commission (ASIC), a highly regarded regulator.

If you’ve been contacted by a trader that is offering to sell you a trading system, trading signals, or any other paid service, this should raise a big warning flag. If you want to verify that they are who they say they are, visit their official website (or their company’s site) and ask them to email you from a matching domain. My general recommendation is to avoid dealing with these characters altogether.

What are the most trustworthy brokers?

The most trustworthy forex brokers hold multiple licenses from top-tier regulatory agencies in reputable jurisdictions all over the world. To help everyday forex traders determine whether they can trust their forex broker, we created the Trust Score rating system. Driven by independently collected data, a broker’s Trust Score rating is determined by a number of factors, such as the quality and quantity of held licenses, years of operation, number of banking licenses, corporate structure, and other data-driven variables.

I’ve reviewed dozens of the best forex brokers in the industry; here are my picks for the most trustworthy brokers in 2024:

Company Trust Score Year Founded Publicly Traded (Listed) Bank Tier-1 Licenses Tier-2 Licenses Tier-3 Licenses Regulated in one or more EU or EEA countries (MiFID).
IG logoIG 99 1974 Yes Yes 8 2 0 Yes info
Interactive Brokers logoInteractive Brokers 99 1977 Yes No 9 1 0 Yes info
Saxo logoSaxo 99 1992 No Yes 7 1 0 Yes info 99 1999 Yes No 7 1 0 Yes info
Swissquote logoSwissquote 99 1996 Yes Yes 5 1 0 Yes info

Do any regulators have a forex broker blacklist?

Yes, nearly every modern financial markets regulator has issued warnings to the public about unlicensed forex brokers. That said, the kinds of available lists may vary by jurisdiction. For example, France’s regulatory body, the Autorité des marchés financiers (AMF), has put out repeated warnings to investors about potential scam forex brokers as well as a blacklist of forex companies.

Belgium’s Financial Services and Markets Authority (FSMA) has also put out a similar list of unlicensed brokers. The Commodity Futures Trading Commission (CFTC) in the United States has put out warnings about unlicensed forex brokers, and has a directory known as the RED list. RED stands for “Registration Deficient” and indicates companies that aren’t properly regulated. Across the pond, the U.K.’s Financial Conduct Authority (FCA) has a warning list of unauthorized firms.

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About the Editorial Team

Steven Hatzakis
Steven Hatzakis

Steven Hatzakis is the Global Director of Research for Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. A forex industry expert and an active fintech and crypto researcher, Steven advises blockchain companies at the board level and holds a Series III license in the U.S. as a Commodity Trading Advisor (CTA).

John Bringans
John Bringans

John Bringans is the Senior Editor of An experienced media professional, John has close to a decade of editorial experience with a background that includes key leadership roles at global newsroom outlets. He holds a Bachelor’s Degree in English Literature from San Francisco State University, and conducts research on forex and the financial services industry while assisting in the production of content.

Joey Shadeck
Joey Shadeck

Joey Shadeck is the Content Strategist and Research Analyst for He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.