Forex Signals

Foreign exchange (Forex) trading has become increasingly popular in the 21st century, attracting numerous participants keen on making a profit from fluctuating currency rates. One aspect of forex trading that has garnered much attention is the use of forex signals. These are essentially trade ideas based on market trends. Many traders, especially beginners, use forex signals to help make decisions about buying and selling currencies. Regretably, this field has also become a fertile ground for scams. In this article, we will look closer at forex scams. By knowing more, we can become better at spotting scams at an early stage.

forex signal trading

What Are Forex Signals?

A forex signal contains information that recommends a trader to make a specific trade on a currency pair. It might suggest whether to buy, sell, or hold and will often include details such as the entry price, stop loss levels, and take-profit targets.

Forex signals can either be generated manually or automatically. Manual signals come from experienced traders or analysts, while automated signals are generated using algorithms and trading robots.

Forex signals can also either be used manually or for automated trading. If you chose the manual approach, you must carry out the trade manually on the trading platform. If you go for automated trading, you give the software permission to use trading signals to open and close positions automatically in your portfolio and trades will be taking place even when you are not in front of the screen.

Forex signals can be sent out in various ways, e.g. as text messages to your phone, to Whatsapp, or be sent directly to a trading platform. Make sure you pick a method that suits your preferences.

Scams in Forex Signals

While forex signals can be helpful tools for traders, it’s imperative to be vigilant as not all signal providers are legitimate. Forex signal scams typically promise high returns with minimal risk, often exaggerating the level of expertise behind the service, downplay risks and uplay the expected profits. Scammers may use ambiguous terms and complex jargon to confuse their victims, and some employ high-pressure sales tactics.

It should aslo be noted that some forex signal providers are not scammers; they are just very low quality. They do not set out to defraud their customers, but using their forex signals are very likely to clean out your bankroll anyway. That is why it is always important to test-run trading signals in a free demo account before putting any real money on the line.

Identifying Forex Signals Scams

Here are some red flags that can help you identify potential Forex signal scams:

1. Unrealistic Returns: If a signal provider promises exorbitantly high returns with minimal risks, it’s probably a scam. Forex trading is inherently risky, and no legitimate service can guarantee consistent high returns.

2. Lack of Transparency: Genuine Forex signals providers should provide information about their trading strategies, risk management, and past performance. If a vendor refuses to share this information or details seem vague, it’s best to steer clear.

3. No Trial Period or Refund Policy: Reputable signal providers usually offer a trial period or a refund policy to allow users to test the service. If this is missing, it might be a scam.

4. Subscription Fees: While there is nothing wrong with a service charge, be wary if the fees are unusually high or if the provider insists on long-term subscriptions.

5. No Verified Track Record: Legitimate signal providers should have a verified track record that can be checked through a third-party auditing system. If they don’t, they might be hiding something.

Of course, with many of these points, it is fairly easy for a scammer to simply lie, making themselves seem more serious than they are. They can make up a bunch of information about their trading strategies, risk management, and past performance and put it on their site, knowing that these things are difficult to dig into for the average trader. They can promise you a trial period and have a seemingly great return policy – but when you try to get your money back, they can simply ignore you, and there is not much you can do about it if they are based in a failing state on the other side of the world.

How to Protect Ourselves

1. Do Your Research: Before choosing a forex signal provider, do a comprehensive background check. Seek out reviews, check their trading history, and verify their longevity in the market. Be wary of fake review sites.

  1. Choose Registered Providers: Opt for signal providers who are registered with reputable regulatory bodies. This offers an extra layer of protection.
  2. Start Small: Do not fork over a big amount of money to a signal provider that you are not familiar with. You should be able to try them out without sending them $$$$$.
  1. Use a Demo Account: Test the signals using a free demo account with play-money before risking any real money. This can help you understand the reliability and accuracy of the signals, and also spot weak points and strong points. This is a very important step, since you can test the signals on a trading platform where the signal provider has no control.
  2. Be smart about transfers. Use a transfer method that makes it easy for you to block access if you wish to cut ties with the signal provider. Some credit card companies can even reverse a transfer if you report a suspected fraud to them and provide them with credible information. Be careful not to violate any terms and conditions of the selected payment method.


Forex signals can be a valuable tool in currency trading, but as with any financial service, traders must be vigilant and do their due diligence to avoid scams. Always remember, if it seems too good to be true, it probably is. There are no shortcuts to success in forex trading, and any service claiming downplaying the risks involved and the efforts required is likely a scam.