The Art of the Forex Scam (II)
Everyone knows how bad forex scamming has become, especially in the past few years. Today, and over the next few weeks, I’m going to give you a few tips on how you can avoid getting scammed by those who make a living, not from trading, but from marketing a defunct product or service. I’ll also be discussing in more depth concerning the different types of scammers out there.
Today, we’ll be focusing on the repainting indicator scam.
When Metatrader really became mainstream, during the middle of the last decade, it helped spawn a whole new breed of new forex retail traders. There were so many people jumping on the forex bandwagon, thinking it was a slick way of making a lot of money. Internet forums were buzzing with many new methods. Call it a second wave if you like. And Metatrader was the platform which helped fuel that wave. Metatrader 3 was popular, but by 2006, it was pretty much obsolete, and Metatrader 4 was the most popular trading platform. Suprisingly, it still is, to this very day.
But what Metatrader did for the birth of new wannabe traders, it also did for new wannabe scammers. And I’m not talking about EAs. A lot of scammers realized that even though noobs were suckers for an awesome looking backtested EA, advice was being given across the net to “trade manually”.
So what better way to convince new traders to trade manually, yet still make a thousand pips a month? The repainting indicator. Except of course, they didn’t call it that.
For those of you who don’t know what exactly is a repainting indicator – typically, it’s one which, when applied to a currency chart, displays buy and sell arrows. So, when you scroll back in time through the chart, you’ll see where the indicator would have told you to buy, and where to sell. The most fascinating aspect of all of this is, every one of the historic signals turns out to be a winner. Picking tops and bottoms now could never be easier! Forget your robot EA which might go belly up at any time. Now, you the trader is in control. You press the buttons. You click on Buy Eur/Usd, you close that beautiful Cable trade. Manual trading at it’s best.
Unfortunately, unbeknownst to the new trader, those arrows were not the same arrows you would have seen in real time. They “repaint” the past, redraw history. If you weren’t even aware of the concept of repainting, you would quite probably think you could make serious pips. Alas, many fell for this trap, especially over at eBay, where scammers sold “super accurate arrow indicator” to make you into an “overnight super trader”.
But hang on, at just $29.99, this couldn’t be the case, surely?
Well, it surely could be, if you looked at how many the scammers have been selling. And what’s even worse, the noob then fails to leave a negative feedback, through fear of himself receiving negative feedback from the seller, or through embarrassment.
Today thankfully, the repainting scammer has almost gone into extinction, thanks to the hard efforts of forex forums, and those experienced forex traders who expose these scammers.
Look out next week for more posts in the scammer series…