MetaTrader 4 and MetaTrader 5 scams are not as uncommon as one might think – this is because MT4 is the most used online trading software (developed by MetaQuotes in 2005). It allows you to trade forex, stocks, futures, commodities, and cryptocurrencies from a single trading platform.
The software is widely popular for its easy-to-use interface, advanced chart analysis tools, instant execution, and automated trading features. Both beginners and advanced traders consider MT4 a convenient platform for conducting technical analysis and trading simultaneously. On the other side, swindlers are using its global acceptance as a key to perform a new form of fraud called “MetaTrader 4 scams”.
As the market grows, more and more beginners become a target of MetaTrader 4 scams. Besides counterfeit brokers, fraudsters are also employing fake MT4 platforms for victimising novice investors.
The process of such scams looks very genuine. You are registering with a broker, you set a user ID & password and you get a download link of MT4 along with login details. In the background, either the scammers steal the money directly from your account or use the MetaTrader platform to manipulate your trading.
This guide explains different forms of MetaTrader4 scams with examples. Also, it includes a few suggestions describing how to avoid such fraudsters from stealing your hard-earned money.
Is MetaTrader 4 legit?
Authentic and legitimate brokers commonly use MetaTrader 4 as their central trading platform. Experienced professionals recommend brokers that allow MT4 trading to ensure a standard trading experience. MetaQuotes hold the authority to sell the MetaTrader 4 and Metatrader 5 licenses to any business. However, they are not responsible for any future misuse or manipulation of the software once sold.
Scammers take the chance to own an MT4 license and use it as their prime instrument for distracting novice investors. Many traders still believe that a broker owning the MetaTrader 4 license must be legit. The fact is, the credibility of using this platform has nothing to do with the reliability and legitimacy of the broker.
MetaTrader 4 is legit as long as it is associated with a reputable broker. Legitimate organizations providing online trading service ensures the ultimate safety and security of clients’ funds and privacy. If you are using the platform under one such broker recognized by international financial regulatory bodies, your chance of being a victim of MetaTrader 4 scams is minimal.
Fake MT4 Results – an old but bold trick for MetaTrader 4 scams
While browsing or searching for anything related to trading on the internet, you may have often encountered web banners or videos containing ads like “Look! how I made $10,000 from $1,000 in a day!” Such ads contain screenshots or live videos showing a rich history of winning trades. The timing, price, S/L, and T/P shown in such account histories are so perfect that you will hardly suspect it as a fake MT4 result.
This kind of MetaTrader 4 scammers mainly target novice speculators with minimal knowledge in trading. They find it so easy to distract inexperienced investors with ads containing fake MT4 screenshots. Following the link provided on such ads will redirect you to a counterfeit broker waiting to steal your money.
So, how do they produce such genuine looking false results?
They activate both buy and sell orders simultaneously for the same instrument. As the market proceeds, they only close the orders that are in profit and keep the losing trades open. Since the MT4 account history only shows the results of closed orders, you’ll only see the winning trades there.
In the above example, both buy and sell positions were opened simultaneously for the same currency pair. So, the market moves in any direction, either the sell or the buy entry turns profitable.
Now, if you only close the orders that are in profit, the platform will produce a fruitful account history like the following image:
Scammers take screenshots of such profitable trading results from both PC and mobile devices and attach them to their ads to trap the newcomers looking for a reliable online trading broker. They do it by using a demo account and frame the results as if they are the result of real investments.
How do you avoid such MetaTrader 4 scams?
Always ignore the ads with lucrative trading results and click on unverified links. A legit broker never guarantees trading success. The profit or loss you make depends entirely on your own decision-making. Therefore, consider sticking to a reputable broker with a valid license from renowned governing bodies.
MetaTrader 4 scams example
Fraudsters require to build trust with the target before beginning the scamming process. Using a well-known trading platform like MT4 allows such con artists to brand themselves as valid trading service providers. They bring new clients to their “brokerage”, insist they invest for great returns, collect the deposits, and soon vanish for good. They shut one website then reopen another one to continue the cheating process.
Being a little careless while choosing a broker may cause you to fall for different forms of MetaTrader 4 scams. Here are a few examples:
Clone brokers are like replicas of famous brand products. Scammers create exact website copies of renowned brokers, use their names and logos, and show MetaTrader 4 as their primary trading platform. The victim thinks they have registered with a reputable broker. Nevertheless, they have already got diverted to the wrong trading home. The idea is to loot the investor’s fund and disappear forever. Sometimes, you’ll not realise that you have been scammed until you request a fund withdrawal. The victims of clone brokers get puzzled, wondering how a legit broker has stolen their money.
Try communicating with the broker via several methods (e-mail, live chat, social media, and phone) to evade such scams before registering. Constant communication will give you an idea about the professionalism and validity of the organisation. Investors who are extremely vigilant in financial markets are less likely to get tricked by a fake broker.
Boiler room tactics and the bucket shops
A boiler room is where scammers practice aggressive sales techniques to force potential clients to register for an account and make deposits. Unregulated brokers called bucket shops to use boiler room tactics to attract investors with lucrative offers like welcome bonuses, deposit bonuses, high leverage, and live trade signals for fresh sign-ups. This kind of organization looks just like a well-established firm from the outside. They offer personal client areas, multiple trading accounts, and access to MT4 like a professional broker. Victims of such scams only realize the actual scenario once they place a withdrawal request.
The famous biographical film “The Wolf of Wall Street” perfectly portrays how Jordan Belfort used boiler room tactics for running the bucket shops successfully.
Manipulating your trades in MT4
Deceitful brokers feed false data to MetaTrader 4 and manipulate clients’ active trades. They tune the market spreads for triggering stop losses and avoid profit locking. As a result, you start losing money, thinking there must be something wrong with your trading strategy. Since you are blaming your own decision-making for the losses, the broker is not required to explain such unusual trading activities.
If you use demo accounts of several brokers and crosscheck the price changes, you will easily be able to detect unusual price hikes causing Stop Loss hits. These kinds of scammers wait until an account is wholly blown so that they can make a complete transfer of clients’ funds into their accounts and frame the adverse result as a regular trading loss.
Is MetaTrader 5 legit?
MetaTrader 5 is an advanced trading platform developed by MetaQuotes. This software is well-known for its multi-asset trading facility, robot trading/Expert Advisors (EA) compatibility, and copy trading facilities. However, like MetaTrader 4, con artists can also manipulate MetaTrader 5 data and temper your trading activities. So, the legitimacy of MT5 thoroughly depends on the reputation and professionalism of the broker offering the platform.