Scams and Bad Practices in Trading: How to Identify Them and Protect Yourself
The world of trading is exciting and offers real opportunities to generate income. However, it is also full of scams, deceptions and bad practices that can cause any trader, regardless of their level of experience, to lose money. I have seen many of these traps first-hand and today I want to share the most common ones, as well as some key tips to avoid falling into them.
1. Promises of Exorbitant Returns
One of the clearest warning signs is when someone promises you guaranteed profits or unrealistic returns in a short time. Phrases like:
"Double your investment in a week"
"Get 20% daily risk-free"
"Infallible system with 99% success rate"
This is all just smoke and mirrors. In trading, profitability is possible, but always with risk management, experience and discipline. No one can guarantee results because markets are volatile and unpredictable.
2. Telegram or WhatsApp Groups without Real Support
Many scammers invite you to exclusive groups where you will supposedly receive trading signals or "secret" strategies. However, these groups have one thing in common:
You can't contact anyone directly.
Only one administrator speaks.
When you ask something important, you are ignored or deleted.
If there is no transparency and you cannot verify the identity of the person running the group, it is probably a scam.
3. "Traders" who Pass Funding Accounts
Another common scam is selling services to bypass funding accounts. Supposedly, these people have a guaranteed method to make you pass any funding test.
But, let's think logically:
If they really had a 100% effective strategy, they would be millionaires operating their own accounts and not selling funding services.
They often use illegal or fraudulent methods, such as bots that manipulate test data. If the company detects this, they close your account and you lose your registration money.
At worst, they just take your money and disappear.
4. Referral Schemes and Suspicious Platforms
There are platforms that invite you to register under a referral link promising you "great benefits". However:
Many of these platforms are unregulated.
They only want to make money from your deposits and commissions.
When you try to withdraw funds, they either give you obstacles or simply disappear.
A classic example of this were platforms like Bitconnect and other Ponzi schemes that offered fixed returns and ended up disappearing with millions of dollars of investors' money.
5. Binary Options: Scam or Reality?
90% of binary options are pure speculation without any solid foundation. It is not a regulated market and many platforms manipulate prices to suit themselves. In this "market", you are not trading against other traders, but against the platform itself, which has full control over the data and can modify prices in its favor.
While there are traders who achieve profitability in binary options, the vast majority end up losing because it is a system designed for the house to win.
6. Free Bonuses and "Easy Money"
Another common scam is when they offer you free bonuses for depositing. They promise:
"Deposit $100 and we'll give you $100 more."
"We give you a 200% bonus for trading."
What they don't tell you is that those bonds:
They have hidden conditions that prevent you from withdrawing your winnings.
They force you to trade in large volumes, causing you to lose your money in commissions and spreads.
In trading, no one gives away money, and if something sounds too good to be true, it probably is a scam.
7. Courses and Mentors: Is Teaching Bad?
Here I want to clarify something important: teaching trading is not a scam. Many people say:
"If someone is profitable, why do they give courses?"
But this logic is flawed. The best traders teach because they have experience and valuable knowledge. You wouldn't want to learn from someone with no experience, but from a person who has traded and gone through all the stages of trading.
The important thing is to know how to differentiate between a good mentor and a scammer:
A good mentor has a demonstrable track record.
It teaches you risk management and realistic strategy.
It does not promise magical results or unrealistic guarantees.
If someone is selling courses with titles like “Become a Millionaire in 3 Months,” that’s a red flag.
How to Protect Yourself from Trading Scams
If you want to trade safely, follow these basic principles:
✅ Do your research before trusting someone. Check their track record, social media, and reputation in the community.
✅ Don't believe in promises of easy money. Trading requires work and discipline.
✅ Be wary of unregulated platforms. Only trade with brokers that are recognised and supervised by regulatory bodies.
✅ Read the terms and conditions of bonuses and promotions. They often contain abusive clauses.
✅ Never send money to strangers. Do not invest in "funds" or systems that promise to manage your capital.
Conclusion
Trading is a world full of opportunities, but also pitfalls. I have seen many people lose money by trusting false promises, and that is why it is crucial to educate yourself, do your research and trade with caution and common sense.
If something sounds too good to be true, it probably is. The path to trading profitability is neither quick nor easy, but with discipline, education, and risk management, it is possible.
I hope this information helps you avoid scams and make better decisions on your path as a trader. Good luck in the markets!
