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The Many Ways a Victim Can Fall for A CFD Scam

The online world moves at a revolutionizing pace that is only getting faster. Millions of people from all over the world now trade on a variety of online trading platforms. You’ve undoubtedly seen a few online classified advertisements. Online trading helps users make money from their own homes’ convenience. The best aspect about this hobby is that you can make money rapidly if you have good trading skills. Needless to mention that you won’t have to spend a lot of money to get results.

forex trading graph

CFD trading is the most popular way to trade on the internet because it allows you to exchange a large range of assets without having to own them, and it allows you to leverage your trades. The biggest issue with internet trading, however, is that there are currently so many CFD trading options. I’ll go through the basics of trading scams and how to avoid being a victim. If you’ve previously been a victim of one of these con games, I’ve got a solution for you.

Australia and CySec in Cyprus are popular location for many of the CFD firms to be registered.

Trading Survey by "MPRA"

If you are someone who’s interested in Trading CFDs, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!

Table of Contents

CFD Trading Scams - What Are They?

CFD is the simplest and most well-known trading format available today. It enables citizens of any country to participate in multiple financial markets at the same time. The traditional technique of trading had the limitation of only being able to deal in one market at a time. When you open an account with an online CFD broker, on the other hand, you can trade in a variety of financial markets. CFDs (contracts for difference) are derivative trading vehicles that allow you to trade the value of assets without having to trade the assets themselves. It enables a trader to exchange the value of a financial instrument between the contract’s opening and closing dates without having to hold the financial asset.

forex on sunset

CFDs are popular among day traders because they allow them to trade assets that are more expensive to buy and sell using leverage. CFDs can be extremely dangerous due to a lack of industry control, a possible lack of liquidity, and the obligation to maintain adequate margin due to leveraged losses. Contracts for difference (CFD) scams have been on the rise. The frauds appear to be expanding in frequency as the number of victims grows, thanks to a persuasive staff that cold phones and pressures targets.As a result, the authorities must pay attention to the situation; the FCA has acted by restricting brokers operating a scam business out of Cyprus. You may inquire as to how by removing Cyprus-based brokers from the FCA’s registry in the United Kingdom.

Unchecked social media marketing is also a big factor in CFD frauds, according to the conducted analysis. It persists despite Twitter, Meta (previously known as Facebook), and Google’s restriction on unlicensed brokers’ CFDs marketing. As a result, these advertisements continue to circulate freely across all channels.In a short amount of time, almost anyone can open an account and begin trading CFDs. When you want to withdraw money, AML checks are performed. CFDs can therefore be traded by anyone. However, just because anyone can trade CFDs does not imply they should.

bitcoin and chart on back


Since the European version of the Financial Conduct Authority (FCA) mandated that all FCA-regulated brokers publish the percentage of customers who end up losing money trading CFDs with them on their websites and marketing materials, it’s become clearer than ever that high-risk investment products are not for everyone. However, the more quickly you try to make money, the sooner you’ll realize you can’t.So, while the product is high-risk, it is also self-directed and execution-only. Even if it’s implicit advice, the FCA guidelines indicate you can’t tell clients what to invest in. Clients, in other words, make their own financial decisions. They are the ones who have pulled the trigger if they lose money.

What Are The Many Risks Involved in CFD Trading?

1. Risk of Account Closing

Your account balance may move rapidly due to market instability and abrupt price swings, which may take place outside normal business hours if you trade abroad in marketplaces.

calculator with bank book

If your bank balance falls below the close-out amount and you do not have enough money in your account balance to cover these situations, your contracts may be immediately canceled by the platform (as shown on the platform).To guarantee that the funds in your account always satisfy the overall margin requirement, keep an eye on your account and deposit more funds or close positions (or portions of positions) as needed.

2. Market Fluctuations & Gapping

Financial markets may suffer rapid volatility, which will be reflected in our instruments’ values. Gapping is a danger that arises as a result of market volatility. Gapping occurs when the prices of our instruments quickly move from one level to another without going through the intermediate level.

financial chart on hand

It’s possible that you won’t be able to place a market order all of the time or that the platform won’t be able to execute an order between the two price levels. Stop-loss orders may be filled at unfavorable prices, either higher or lower than expected, depending on the outcome of the trade. You can decrease market risk and impact by utilizing an order boundary or a stop loss.

3. Client Money Risk

100 dollar bill

In jurisdictions where CFDs are legal, client money protection measures exist to shield investors from potentially harmful activity by CFD providers. 1 To prevent providers from hedging their own investments, the law requires that money paid to the CFD provider be kept separate from the provider’s own funds.

The law does not, however, prohibit the pooling of a client’s funds into one or more accounts. After a contract is agreed upon, the supplier withdraws an initial margin and has the authority to seek additional margins from the pooled account. The CFD provider has the authority to withdraw funds from the pooled account if the other clients in the pooled account fail to make margin calls, affecting returns.


We have encountered victims who were mentally and emotionally drained when they were scammed out of their money. We can help you with your legal and technical concerns. We can help you get your money back.

4. Holding Costs

chart on phone and laptop

You may pay holding expenses depending on the positions you keep and how long you hold them if you hold positions on certain assets overnight after 5 p.m. New York time, these holding expenses are charged to your account on a daily basis. In some circumstances, especially if you hold positions for a long time, the total of these holding expenses may outweigh any profits or dramatically raise losses. It’s critical to have enough money in your account to meet your holding charges.

When compared to other types of investments, CFD trading carries a significant amount of risk to your funds, and prices can move quickly against you. As a result, CFD trading may not be suitable for everyone, and you should be aware of the risks and obtain independent professional advice if necessary before deciding whether to begin trading. Here’s a quick rundown of our CFD costs.

5. Market Risk

busy on computer

CFDs are derivative assets that allow a trader to bet on the movement of underlying assets like stocks. If an investor believes the underlying asset will rise, they will take a long position. Investors, on the other hand, will go short if they feel the asset’s value will decline. You hope that the value of the underlying asset will rise in a way that benefits you the greatest.

If you’ve been a victim of investment scam you can contact us for support

Even the most experienced investors can be proven incorrect. Rapid adjustments might be triggered by unexpected information, market conditions, or government policy changes. Due to the nature of CFDs, even little changes can have a significant impact on returns. If the underlying asset’s value falls below a certain threshold, the supplier may terminate the contract.

Most Common Ways of CFD Scams

1. Fake Bots

The use of a pitch about some online software that they have invented to assist you in generating money is one of the ways these online scammers will hook you. They discuss this incredible software, which appears to be a trading bot, that can trade on your behalf and ensure that all of your trades are profitable. They usually begin with the assumption that a software developer was instructed by business clients to create a software solution that simplified trading. This programmer usually ends up designing an algorithm that permits its fictitious trading platform to succeed in over 98 percent of its trading predictions.

As a result, when consumers learn about a trading bot that can make them money with a guarantee, they rush at the opportunity. No such thing is possible in reality. The world of online trading is genuine and not rigged. You can’t just foresee transactions like that. You can’t foresee the outcomes of internet trades with 100 percent certainty, just like you can’t predict the weather forecast. When you join up for one of these trading bots, you will be redirected to a legitimate trading platform, where you will be required to deposit fees in order to trade.

2. Commission on Top of Spread

computer with view outside

Spreads on top of commissions are one of the first and worst ways you might lose money to online CFD trading scams. So, in order to understand what is truly going on in the digital trading realm, you must first grasp the two principles. When you talk about spreads, you’re referring to the discrepancies between the buy and sell prices of assets when you purchase them from a broker. You wouldn’t be able to sell asset A back to the broker for the same amount if you bought it for $1 from the broker. When you sell it back, you might get $0.9 from the broker. That’s the distinction that allows brokers to profit from your trades.

When a broker adds commissions to spreads, you can be sure you’ll end up paying more for each trade than you should. Only extract money from you in the form of a spread from the broker. It can make as much money as it wants by loosening or tightening the spreads. When commissions are included, however, all of the profit you make on your trades is lost to spreads and commissions. You eventually discover that you can never make money with the broker because you are overpaying for your deals.

3. Signup Bonuses

crypto coin

Naturally, if you want to trade, you must first open a trading account with an online broker. You will need to fund your online trading account before you can open it. That’s when you realize you can earn some substantial bonuses. There are certain brokers who will give you a 100 percent bonus on your first deposit. That means the broker can give you a 100 percent bonus on your first deposit.

So, if your first deposit is $50, the broker will add another $100 to your account, giving you a total of $150.These are effective luring strategies for traders who are still fresh to the business. The top brokers will not compel you to join them solely because of their bonuses. They can brag about a million other things that are far more valuable than a registration bonus.

4. Requotes

credit card payment

When you register with an online broker, you want to avoid this at all costs. When you sign up with the finest online brokers, you’ll see that they inform you there are no requotes on their trading platform. This demonstrates that requotes are undesirable and should be avoided when dealing with an online broker.

In a trade, you are unable to enter a deal because the broker with whom you have signed up does not allow it. Because you entered a price that the broker does not like, you are not permitted to enter the trade.

Fake brokers and scammers can use this to prevent you from participating in a number of beneficial and profitable trades. They throw a requote at you as soon as they see you’re going to make money on your trades. Learn more on how to protect yourself by visiting our website!

Say Goodbye To CFD Scams

In conclusion, stop-loss orders can assist limit the apparent dangers when trading CFDs. Some CFD providers offer a guaranteed stop-loss order, which is a predetermined price that, when met, instantly ends the contract. Even with a low beginning charge and the possibility for substantial profits, CFD trading can result in illiquid assets and significant losses.

When considering one of these types of investments, it’s critical to consider the risks involved with leveraged products. The losses that occur are frequently bigger than anticipated. There are so many CFD trading scams out there that even if you avoid ten others, you could be duped by one.

However, if you have been defrauded, you must investigate your alternatives. Claim Justice can help you with that. We are a fantastic internet business that can assist you with your money if you have already been scammed. We can educate you on everything you need to know about online CFD trading scams and how to prevent them. We also have a team of pros on hand to assist traders in reclaiming their funds.

do you need help?

A lot of those who contact us have questions and concerns about their personal and business data being compromised. We aim to arm you with the legal and technical know-how in the fight against scams. Also, we will be able to refer you to top scam recovery agencies.

Please fill up the form. Rest assured that our support team will get in touch with you

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