Beware the new forex scam: win-only trading statements

‘Pull wool over eyes’ trick

When someone shows you a winning forex statement with the motive to make you part with your money, how do you know that it is really a winner and not a loser? I share some simple tricks that fraudsters use as well as some tips to avoid them. If you like them, please share with your friends.


Trick #1 – Focus on profits

This is the screen capture of a demo forex trading account which we are using for educational purpose. The typical plot that fraudsters follow is to make their potential victims focus on trading profits only. The message? ‘You can make a lot of money’. This trick targets individual greed.

What individuals will be exposed to is the profit number at the bottom right corner. By focusing on profit, fraudsters take attention away from other important information like:

  1. Is the ‘fund manager’ qualified to solicit funds for investment under MAS CMS framework for licensing players in the finance/investment business?
  2. Does the individual or team selling you this performance have a track record?
  3. Does the ‘company’ have a legal setup and adequate paid-up capital?
  4. What story does all the other information in the statement like ‘balance’ and ‘equity’ tell?

But these belong to another story. What we want to do in this post is to look at statements only. This was yesterday’s P/L.


Yesterday’s statement

The only message they want to sell is this: Make Money!


I had > $14K profit yesterday


Trick #2 – Focus even harder on profits

If you (potential victim) do not fall for the trick, they will push harder with another profit statement. Like today’s.

FX demo trading performance

Today’s statement


Today I have >$21k. Make more money!


Trick #3 – Wouldn’t fall for it? Let me show some losses

‘What about losses you say?’

Now those of you who read this posting yesterday (log-in required) should know that there are unrealised P/L but there are also realised P/L on another statement. This is a screen capture of a realised P/L on the same demo account that shows realised losses.


Demo trading account | Realised P/L

If you take unrealised profits less realised losses, profits can suddenly become smaller.

This demo account was started on 20 January 2015. At this moment, floating P/L is $14.7K and realised P/L is -$5.6k. Gains over 9 days – $9.1K.

Looks good? Yes but it is still wrong. This is a diversion because it was yesterday’s statement – not today’s.


Trick #4 – Diversion back to focus on profit

‘Look we have outstanding results. Although yesterday we made $14.7k, our profit today has grown to > $21k. This is another $7000 growth in one day.’


Please don’t fall for this.


Trick #5 – Play with your perception by moving numbers around

It is a diversion because there is today’s realised P/L you need to look at as well.

This is statement below is today’s realised P/L.

FX demo trading performance: realised losses

Today’s realised P/L

Realised losses also grew to > $13k. This means that the nearly $7k jump in unrealised profits today came from closing all the losing trades and shifting their losses to the realised P/L.


How to avoid falling for those tricks? Some tips for you

  1. Steel yourself and don’t fall for profit-numbers-only trick that many scams employ i.e. don’t let them activate your greed. Ask to see losses as well.
  2. Understand how profits and losses are reported such as the difference between unrealised and realised numbers and how they show up in different statements.
  3. Ask to see as many statements to get a sense of performance at an instance as well as trend over a period of time.
  4. A genuine and aboveboard player in the finance/investment business will tell you about profits and brief you on the risks involved as well. Be very wary if someone tells you that ‘losses are not important and you shouldn’t wonder about losses’.

If you like this story, you might like another one ‘Forex Scam: Fraudulent setup claiming to be regulated broker‘.

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One thought on “Beware the new forex scam: win-only trading statements”

  1. Dennis Yap says:

    well noted

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