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Dirty Lies about Forex Trading Exposed

Dirty Lies about Forex Trading Exposed

Report reveals all!

How to protect yourself from being scammed


In the Forex trading market, over $5 trillion changes hands every day. The over-the-counter transactions conducted occur on the “spot”, meaning that they are instant. The amount traded daily is too humongous for a financial market of that nature, considering that it lacks a centralized regulatory oversight. As a result, accountability has always been a problem with it.

It is this condition of the Forex market that allows a lot of room for scams. Forex scammers are attracted by the prospect of earning, within a short time, enormously through their well-orchestrated machinations without having to give any real value in return.

The improved enforcement of specific regulations has done more to protect retail Forex Traders from those scammers over the years, though. For example, before opening an account with any Broker, United States-based Traders are now enjoined to ensure that the Broker is duly registered with The National Futures Association (NFA). NFA is the “premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets” (including forex). Still, scams persist. And it is, therefore, the responsibility of Forex Traders to protect themselves.

Considering that, here is a thorough discussion of the wide range of Forex scams and tactics that Forex Traders can use to, indeed, protect themselves.

Which brings me to the first and most important scam issue:

Unregulated Trading Websites

Lacking an international regulatory entity which will monitor and supervise the CFD global market, generated a numerous amount of scam companies which are operating nowadays throughout cyberspace.

Commonly, every country in the western world holds a regulatory entity, that monitors specifically the financial markets trading industry. Their general mission is:

  • Conducting due diligence, provide necessary licenses to eligible forex brokers to conduct forex trading business.
  • Enforce required adherence to necessary capital requirements.
  • Combat fraud.
  • Enforce detailed record-keeping and reporting requirements regarding all transactions and related business activities.

If you can read in between the lines, then you already realise, what a huge breach we’re dealing with here; being a person who is interested in investments / forex trading , simply Googling these words , will (most probably) lead you to one of these scam websites.

How can a (beginner) trader tell the difference between unregulated or regulated trading platforms? I assure you, the websites might look alike, and most probably, the scam website, will use a fake regulation license number (usually at the bottom of the website’s home page), so how can we work around it?

Only by checking it with the regulation entity itself, usually their websites (regulation) are not so easy to inquire , but still, if that’s the first element which will prevent us from losing our money to scammers, I would say it is worthwhile checking. Furthermore, the fact a company is registered and monitored by a regulatory entity is very reassuring they are safe to trade with and will treat their Clients with the proper decency.

Checking your local regulation entity is required! Why? Because, if you are trading with an Australian broker who is regulated by ASIC (Australian regulation) and you live in Finland (for instance) and don’t have Australian citizenship, that could present a problem filing a complaint about that broker. In short, verify that you are trading on a locally regulated platform, with a locally regulated company and that their website is also locally regulated.

To view our preferred Broker, CM Trading’s license on the FSCA’s official website, follow the steps:

  • Go to: https://www.fsca.co.za/Fais/Search_FSP.htm
  • Enter FSP number 38782 or do a partial search of our company name or postal code, and click on the ‘submit’s button
  • Click on the ‘Details’ button
  • Choose the option named ‘Representatives’, leave the space blank, and then click on the ‘Search’ button.
  • At this point, you should see a table where you will have an option by the name of GCMT South Africa (PTY) LTD.

Spread Scam

As a retail Trader, you need a Broker to access the Forex market. When you want to buy, the Broker will serve as an intermediary between you and another Trader who wants to sell. And, when you want to sell, it will connect you with another Trader who wants to buy.

The Broker charges a fee for this role. Usually, this fee is called spread which is the difference between the bid price and the ask price on every transaction routed via the Broker. Normally, Spreads vary with currency pairs and depend on factors such as liquidity and other prevailing market circumstances. 

This is where it gets interesting. Many unscrupulous Brokers, however, manipulate their bid/ask spreads to reap off their clients massively. Before the advent of stronger regulatory requirements, they varied widely among Brokers.

As a result, it was not uncommon to see Brokers levying spreads of up to ten pips or more on each trade taken by their clients. This situation easily made it impracticable for retail Forex Traders to reap any gain from Forex market as almost all their profits were being eaten away by Brokers in the name of spreads.

Charging by retail Forex Brokers is based on the principle that the Brokers pay themselves first. That is, before the Trader can make a gain on any position, the price must swing far beyond the spread. For example, a position opened with a Broker charging ten pips or more as spread will have to accrue more than ten pips first before it can be regarded as profitable for the client. 

The tendency for this scam by Brokers, especially the unregistered ones, still exists. Hence, you should check the spreads on the instruments used in your trading.

As part of our values, we promote transparency. Here are the spreads for ALL assets being used on our preferred Broker’s platform as published on their website;





Signal Scam

One Forex scam that has gained grounds in recent years is the scam of signal peddlers. The highly risky nature of the Forex market, which has made many prospective and existing Traders loose hope on all possibilities of winning in it without some form of external help, is the primary reason for this.

The fact is that most retail Forex Traders lose money.  The odds are stacked against them. The figures are not exact, but it is widely estimated that over 90% of newbie Forex Traders have streaks of losing trades, get financially drained, and subsequently take a bow.

In all fairness, it is important to state that there are legit signal sellers, though. Also, there’s the relevancy or skill issue. For instance, a legitimate signal provider may push good trading signals to a complete beginner trader, however does he/she not really know how to adjust the trade based on the signal info e.g.”Take profit”, “Stop loss”, “Expiry” etc. This trader will most probably blame the signal provider for the losses, even though he/she received good signals. Usually are signal services sold to traders not interested in learning the markets or how to trade, they just want to make money  which leads them to open a trading account and a signal provider account, and they still lack the ability to follow the signals properly or at the right time.

However, there are many fraudulent ones, too. As a result, it will help to be cautious if you will are shopping for one.

Our preferred Broker provides various signal services to our Clients including Flexi- & Trade Central. All these providers are verified companies with established names. Some are free while others require additional payments. The advantage is you can “test” a few signals and experience how it pans out for you. Diversit-e Smart Trade College ONLY partners withe verified, legitimate, regsitered companies to ensure our Clients ONLY get the best!

Algorithmic/Robo-trading Scam

The scam of signal peddlers is a persistent one. Even when discovered, it emerges in another form, fully clothed in a more deceptive look. One of these looks is algorithmic or robo-trading.

Algorithmic/robo-trading is a relatively new concept. Of a truth, it is not intended to be a scam. Instead, it is often founded on the goal to make more profitable Traders through the automation of their Forex trading.

As a result, algorithmic strategies are based on software that analyse the Forex market and make all trading decisions for the Forex Traders that use them. While this system’s level of effectiveness cannot be ascertained as perfect, its overall usefulness cannot be denied, too.

Hence, it is legitimate. However, advocacy for its use has been overblown. Scammers now easily hide under its cloak. Those unscrupulous individuals parade their fictitious systems as the ultimate solution for struggling Forex Traders.

In some situations, the use of trading robots can indeed help to improve trading performances. However, you must first evaluate those robotic systems. Diversit-e Smart Trade College educates and guides their Clients through the whole “copy trade” process. That is, before you adopt any algorithmic trading system, test it with fictitious capital.

Unsegregated Trading Account Scam

Now, retail Forex Traders have more choices than ever. Hence, you should not allow any Broker to coerce you into accepting substandard practices.

Over the past few years, it has become a standard practice for retail Forex Brokers to keep their clients’ funds in segregated accounts. The commingling of Traders’ funds has become almost a forbidden act in the Forex Brokerage world. 

A Broker not keeping segregated accounts for its clients is a red flag. Do not be deceived. Such a Broker will make it hard for you to monitor your trading capital and market performance. Additionally, the management of such a Broker can easily divert their clients’ funds for personal use.

Diversit-e Smart Trade College’s preferred Broker is the largest Forex Broker in South Africa. GCMT SA who own and run the brand CM Trading is a Juristic Representative of Blackstone Futures who are fully regulated by the Financial Services Board (FSB). Our Client’s funds are held in segregated accounts to ensure maximum security and peace of mind.

Withdrawal Scam

Many Traders can escape most of the scams mentioned above. Of all Forex scams, however, withdrawal scam is the most prevalent and arguably the hardest to escape. Fraudulent Brokers accept deposits without any hitch, allow their preys to enter trades on their platforms, but when it comes to withdrawal, they then show their true colours.

Withdrawal scam is the most perpetuated Forex scam. Sadly, it is also the hardest to avoid because victims are trapped by being trustful of the Brokers enough to sign up for accounts with them first. The only way to prevent withdrawal scam, therefore, is to discover fraudulent Brokers from the start.

Withdrawals can only be deposited to the original account used to deposit the trading account from. It is imperative to ensure you have the required FICA documents uploaded. Provided all the required documentation is provided to our preferred Broker’s Account Manager, can Diversit-e Smart Trade College’s Clients request withdrawals online via their trading portal and will the funds reflect in the Client’s account within 48-hours. It is important to note that Diversit-e Smart Trade College does not accept deposits and or trade obo their Clients. The company educates and assist their Clients to open real trading accounts at their preferred Broker through which their Clients execute their trades. The preferred Broker’s Trading Specialists are FSCA registered and regulated. Clients are in complete control of their deposits and withdrawals.


The good news is you do not have to get scammed. Through conscious precautions, you can protect yourself. Some of these are:

Careful Research:

Before you choose a Broker to use, you should first conduct diligent research. If you are resident in the United States, the National Futures Association (NFA) has a dedicated website, the Background Affiliation Status Information Center (BASIC) for running background checks on Brokers. This can help you avoid the crooks.

Brokers’ Regulatory Status

In the course of your research about a Broker, the most vital variable you should look out for is its regulatory status. Is the Broker you want to use regulated? If so, what is the strength of its regulatory agency? For instance, a Forex Broker licensed by the Commodity Futures Trading Commission (CFTC) of the United States can be considered more credible than one registered with an offshore regulatory body such as the Vanuatu Financial Services Commission.

Registration with offshore regulatory agencies has always been a major concern in anti Forex scam efforts. Why? Because it often serves as a shelter for fraudulent Brokers to perpetuate their scams while still being able to present a posture of legitimacy.

Therefore, checking the registration of your prospective Broker with a regulatory agency it is not enough. Additionally, you should also check for the legitimacy of the regulatory agency. Some of the foremost regulatory agencies of the world are:

  • Financial Conduct Authority (FCA) of the UK.
  • Investment Industry Regulatory Organisation of Canada (IIROC)
  • Australian Securities and Investment Commission (ASIC).
  • Cyprus Securities and Exchange Commission (CySEC).


What is the Broker’s history? When was it established? For how long has it been in business? Does it release its financials from time to time? Who are its executives? What is their credibility?

Moreover, where is its headquarters? Does it have a website? These are vital questions that are worth asking about Brokers you research. The best Broker to use, therefore, is the one that has a website with designated address, customer support service, credible management, and an indication of its regulatory status.

Also, awards of excellence won by a Broker for its services is reassuring. However, you should ensure that the Broker’s wins are independently verified to guard against false claims.


In all honesty, the number one reason most Forex Traders fall into scams is the wishful thinking that you can make humongous wealth within a short time with a little amount without adequate knowledge.

That is especially true for exorbitantly charged Forex courses whose authors promote with suspiciously high winning rate. Think about it; if their claims were true, why would they need to sell their courses?

The truth is that usually, those people do not know how to trade. They rather earn by pompously parading and selling their courses and systems.

You can avoid falling for them by not being greedy. Becoming a profitable Forex Trader takes time and patience. You will need to work at it. Entering Forex with a greedy mindset will make you fall for scams. Be warned.


This precautionary move is not unconnected to the last one. A Broker can promise potential Clients’ enormous bonuses when they open accounts with it. The Broker may also claim that it “will ensure its Traders generate at least 90% returns on their trades…”

Sometimes, these “too-good-to-be-true” scam alerts can come from signal providers. For example, some signal sellers do promise up to 96% winning rate on their signals. Aren’t all these claims too good to be true?

And that is it. If any scheme is too good to be true, it is. And it will pay you to stay away from it.


Prior to using any Forex Broker or signal peddler or taking a Forex course, pay attention to what others are saying about them. It will not hurt at all if you learn from others so that you can avoid their mistakes.

Check online for reviews about Brokers, signal sellers, and professional training offered by self-acclaimed market experts. If they had worked for others, they would most likely work for you, too. Try to talk to them directly, do so to obtain their first-hand views.

If they weren’t effective for them, they might not be equally effective for you too, and it would be better to stay away. Most importantly, always verify first the credibility of any Broker or signal seller you want to use or Forex course that you want to take.


NOTICE & DISCLAIMER: Diversit-e Smart Trade College (Pty) Ltd, its Employees, Sales Executives, Resellers Agents, Affiliates (Partners) and/or Contractors are not registered financial services providers and are not licensed to give any financial- and or investment advice. Diversit-e Smart Trade College (Pty) Ltd, its Employees, Sales Executives, Resellers Agents, Affiliates (Partners) and/or Contractors do not manage any monies for investment purposes. Past performance does not guarantee future growth. Consult our preferred Stock Brokers and or a FSCA regulated Broker and or a Financial Advisor before making any investment decisions. Self-trading the capital markets and or stocks involves risk. Never trade with money you cannot afford to lose. Diversit-e Smart Trade College (Pty) Ltd, its Employees, Sales Executives, Resellers Agents, Affiliates (Partners) and/or Contractors cannot accept responsibility for any losses and or damages suffered in any way. All rights herein reserved.