MetaTrader 5 Scams: How To Avoid Them | Hantec Markets (2024)

• September 26, 2023
• Steve Miley

For as long as the internet has been around, there have been scammers trying to make money through fraudulent behaviour. This is no different in the world of trading, especially in the forex market. MetaTrader 5, or simply MT5, is one of the most popular trading platforms amongst forex brokers. It provides various benefits for traders and can help them with their strategy and to make a profit. However, the nature of this software means it can be manipulated by online scammers. As traders, we must know how to recognise these scams and how to avoid them.

Table of Contents:

What is MetaTrader 5?

Any trader who has interacted with the foreign exchange market will have heard of MetaTrader 5 and its predecessor, MetaTrader 4. These are arguably the most popular forex platforms to this day, despite being founded in 2005. A huge selling point is their reputation for providing a reliable and secure environment for users to trade. However, as with any open marketplace, there is potential for fraudulent activity to occur. This article will look into the concerns you may have with MT5 and how best to go about trading in today’s environment.

Is MetaTrader 5 a Scam?

To begin with, it should be clarified that MT5 itself is in no way a scam. As explained above, MT5 itself is simply a software application that allows traders to connect to trading platforms and facilitate transactions via computers. These platforms effectively work as intermediaries that allow traders to engage in activity with brokers directly. Any trading activity on MT5 is only between the trader and their chosen financial partner, with the platform simply receiving quotes and executing orders during the trading process.

Potential Scams and How to Avoid

While MT5 itself is not a scam, it’s essential to recognize that for a secure experience, one must know about any potential scams and fraudulent behaviour they may encounter when using the platform. In the rest of the article, these scams are explored and the ways to avoid them.

Fake Reviews

As when entering any new market, beginner traders often rely on reviews and feedback when making their decisions. This can range from when and where to trade, what broker to trade with, looking into the complexities of leverage and risk management, or simply setting up an account. While this is a good tactic for beginners to learn the forex environment, they will likely encounter the issue of fake reviews and testimonials leading them astray.

One of the most common tactics scammers use to deceive users is fake reviews. These reviews make it difficult for traders to find real opportunities compared to the scams. The most common form of fake review is a large amount of overly positive reviews for an obscure or unregulated broker. Deceptive firms will not stop there, often creating negative reviews to maintain a level of credibility for themselves or posting them about a competitor to lower their sales. Other red flags are generic five-star reviews or those with no context to trading, like saying the broker ‘changed their life.’

To avoid these fake reviews and find the best opportunities as a trader, you must apply critical thinking and take all reviews with a grain of salt. You should try to verify the source of the reviews, see if there is any evidence supporting their claims, and look out for red flags. Ultimately, traders themselves must judge the legitimacy of opportunities, and if something appears too good to be true, a prudent approach is to pause and reflect.

Fake Testimonials

The issues with fake testimonials and how to avoid them are similar to that of fake reviews.

Testimonials will often show snapshots of seemingly extraordinary trading achievements, where the ‘user’ will claim to have made huge profits on relatively small investments in a short amount of time. They will often tie this claim to a particular broker who uses a new and exciting method of trading. This can be intriguing for traders, especially beginners, but is often just a ploy to take your money.

As with fake reviews, it is important to be able to spot the red flags of these fake testimonials and be able to avoid being baited by them in favour of genuine opportunities. It is the trader’s responsibility to be cautious and question the authenticity of the deals they come across. In general, if someone is overly positive about a broker and cannot back up their trades with screenshots showing wins and losses, their review can simply be dismissed. You must also be careful about accepting falsified data and trusting a firm, this will be touched upon next.

False/Fixed Trades and Profits

Another scheme that forex scammers often employ is the use of fixed or false results. Similar to the other scams, where fictional trading results are concocted in an attempt to entice individuals with the illusion of guaranteed large profits, these fraudulent schemes often prey on unsuspecting victims, promising quick riches that never materialise. It should be stated that in trading, profits are never guaranteed, even for the best traders. Nobody can truly foresee the unpredictable shifts of the market, meaning the notion of fixed returns on investment is false. Those starting their forex journey who want to evade common MT5 scams should steer clear of fixed profits and take a more nuanced approach is the path to financial prudence.

Some brokers offer a free MT5 trading demo for beginners, with the goal of showing the platform’s functionality. Caution is still needed when navigating these demos as some brokers leverage these demos as bait. Once funds have been deposited, normally around $250, they create an account with that amount, allowing traders to test their platform and services during the “demo period.” Traders should be made aware of the fact that brokers profit from these deposits through commissions or spreads on trades made during this period, showing the need for scepticism, even with demos.

Rotator Scam

Now we come across some scams that may be less obvious to the average individual but are equally as important to recognise for traders. One such ploy is the “rotator scam,” where website owners offer so-called “free” rotator services. Users can submit their websites to be featured and rotated alongside others. However, the website owners will then reveal their ulterior motives when they attempt to persuade you to make a payment for the inclusion of your website in their rotator.

The owners will often make promises like substantial traffic increases for your website while on their rotator. They may also threaten to remove your website from the rotator if you fail to make the payments that they demand. The only true objective of these websites is to make money for their owner, and there will be no benefits of increased traffic as promised. In economic terms, it’s a wiser choice to manage and promote your website independently.

Forex Robot and Trading Advisor Scam

The final type of MT5 scams we will talk about are various robot and fake trading advisor scams. These come in multiple different forms, with their own set of tactics and promises, but are all linked to one another. We will touch on the automated trading robot scam, the Forex robot scam, and the MT5 expert advisor scam. These scams involve individuals investing their money in trading robots and counterfeit expert advisors, with promises of effortless wealth and riskless withdrawals. However, as already covered, these returns do not exist, and the reality is these schemes only exist to defraud traders of their hard-earned cash.

The automated trading robot scam closely mirrors the rotator scam, but instead, the perpetrators coax individuals into investing their money in an automated trading robot. As with all scams, large returns are promised, with little to no risk and easy withdrawals. In reality, their trading robots are nothing more than smoke and mirrors. Investing in these fraudulent robots invariably leads to financial losses.

Like the automated robots, forex robots instead target individuals interested in forex trading, encouraging the use of counterfeit expert advisors. Expert advisors are software designed for trading forex and other financial markets. Again, they advertise these robots as money printing machines with low risk, where the reality is far from this.

Finally, there is the MT5 expert advisor scam, and much like its counterparts, it revolves around the exploitation of fake expert advisors. These fraudulent software tools are advertised just as the other scams have been, with low risk and high reward, but again are only there to steal your money.

When navigating the forex landscape, it is vital that traders are vigilant when distinguishing genuine opportunities from deceptive ploys. This is the first and sometimes the only line of defence against financial exploitation when online trading. Now you should be able to recognise the most common MT5 scams and avoid falling into their traps.

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