Common Metatrader 5 scams
The top MT5 scams are:
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The Rotator Scam
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Automated Trading Robot Scam
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Forex Robot Scam
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MT5 Expert Advisor Scam
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Phishing and Malware
Metatrader 5 has become a widely used platform in the rapidly evolving world of online trading, providing traders with an abundance of options. Wherever there is money to be made, there will be those looking to take advantage of unsuspecting traders, as the saying goes. That’s why Traders Union experts have stepped up to help traders navigate these dangerous waters. In this article, we will investigate Metatrader 5's dark side, exposing some of the platform's most common scams. Experts from Traders Union will provide valuable insights and strategies to help you avoid falling victim to fraudulent schemes.
What is Metatrader 5
MetaTrader 5, often referred to as MT5, serves as a comprehensive trading platform designed for institutional use. Unlike its predecessor, MetaTrader 4, which primarily focuses on Forex trading, MT5 offers a more extensive range of assets, including stocks and commodities. It comes in various versions, including web, online, and mobile, making it accessible to traders across different devices. One of its standout features is the inclusion of built-in trading robots , along with a freelance database for strategy developers, enabling users to automate their trading strategies. Additionally, MT5 offers copy trading and virtual hosting services. The platform boasts a user-friendly interface available in 31 languages, and it is typically accessible through your chosen broker at no additional cost.
Can MT5 be trusted?
Yes, MT5 can be trusted. Traders from all over the world use the reliable trading platform MetaTrader 5. A respectable company in the financial software industry, MetaQuotes, is its creator. The strong security features, open implementation, and regulatory compliance of MT5 make it the recommended option. Although MT5 has earned a lot of trust, it should be combined with trust in your chosen broker.
Read also: Has MT4 and MT5 been banned? in the TU article.
What are the most common MetaTrader 5 scams?
Traders need to be aware of the five common scams that happen on the MetaTrader 5 platform in order to safeguard their funds and make informed decisions. For your convenience, TU experts have highlighted them below.
The rotator scam
In the rotator scam, fraudsters advertise a trading system that supposedly guarantees substantial profits. They often promise minimal risk and high returns, enticing traders to invest their money. However, once traders commit their funds, the scammers rotate to a different scheme, leaving victims with significant losses.
Automated trading robot scam
This scam involves selling automated trading robots or software with the promise of quick and effortless gains. Traders are lured by the idea of making money while they sleep. In reality, many of these robots are ineffective, and some are even designed to siphon funds from trading accounts.
Forex robot scam
Similar to the automated trading robot scam, the Forex robot scam promotes the idea of profitable trading robots that can outperform human traders.
MT5 expert advisor scam
MT5 expert advisors (EAs) are automated trading tools used on the platform. Scammers may offer EAs with unrealistic profit claims, only to deliver ineffective or even harmful software that can lead to financial losses and account compromise.
Phishing and malware
Scammers may use phishing emails and malicious software to target MT5 users. These tactics aim to steal login credentials and personal information, potentially leading to unauthorized access to trading accounts and financial theft.
Best MT5 brokers
Exness – Best for Fast Withdrawals
If you need fast withdrawals on the regular, Exness is a great MT5 broker to opt for. This broker is relatively young compared to other powerhouses on our list, but they’re far from subpar. Exness is already regulated by the FCA and CySEC. A true ECN broker with a large selection of markets, Exness offers a wide range of Forex currency pairs in addition to CFDs in commodities and crypto. Exness might also become a professional Forex trader-exclusive broker, meaning that those with a lot of trading experience and assets can reap the rewards of this broker. Exness offers MT5 for desktop and web, and there is no minimum deposit to start.
RoboForex – Best Overall for MetaTrader
Authorized and regulated by the IFSC, RoboForex has to be one of the best overall MT5 brokers around, for both beginners and seasoned Forex traders. Their execution times are lightning fast – and the platform also offers execution quality proof via Verify My Trade. Eight different asset classes, including Forex ECN and a variety of stock CFDs, are offered by RoboForex. They also have a variety of other trading instruments, such as ETFs, crypto, and commodities. Altogether, the total number of assets that traders can trade clocks in at 12,000. RoboForex also offers five different pricing plans that are quite affordable. However, the offshore regulation may be a bit iffy for some potential clients.
How to protect yourself from trading scams?
The TU experts have highlighted crucial tips for beginners to safeguard their investments when it comes to avoiding trading scams. Beginners should give these steps top priority.
Research and due diligence Before diving into the world of online trading, it's crucial for beginners to conduct thorough research. Understand the basics of trading, the assets you wish to trade, and the market conditions.
Educate yourself Knowledge is your best defense against scams. As a beginner, take the time to educate yourself about trading strategies, risk management, and the specific tools and features of the trading platform you intend to use, such as MetaTrader 5.
Choose a reliable broker The most crucial step for beginners is selecting a trustworthy broker. A reliable broker should be regulated by a recognized financial authority, have a transparent fee structure, provide excellent customer support, and offer a secure trading environment. Reading reviews and seeking recommendations can provide valuable insights into the reputation and reliability of brokers.
FAQs
Are there any scams with MetaTrader 5?
Scams can occur in the context of MetaTrader 5, as they can with any online trading platform. Common scams include fraudulent brokers, the sale of ineffective trading robots, and phishing attempts.
How do MT5 scams work?
MT5 scams can take various forms. These may include deceptive sales pitches promising high profits, false investment opportunities, or schemes involving trading robots that don't perform as claimed. Phishing attempts may use fake emails or websites to steal user information.
Is MetaTrader 5 Legal?
The trading platform MetaTrader 5, created by MetaQuotes, is a reputable and legal platform.
Can I trust MetaTrader?
Yes, you can. MetaTrader is a well-established and trusted trading platform used by millions of traders worldwide. It is renowned for its features, security, and reliability.
Glossary for novice traders
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Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Cryptocurrency
Cryptocurrency is a type of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks, typically based on blockchain technology.
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Expert Advisor
An Expert Advisor (EA) is a piece of software or script used in the MetaTrader trading platform to automate trading strategies. EAs are programmed to execute trading decisions based on predefined criteria, rules, and algorithms, allowing for automated and systematic trading without the need for manual intervention.
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CFD
CFD is a contract between an investor/trader and seller that demonstrates that the trader will need to pay the price difference between the current value of the asset and its value at the time of contract to the seller.
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Team that worked on the article
Winnifred Emmanuel is a freelance financial analyst and writer with years of experience in working with financial websites and businesses. Her expertise spans various areas, including commodities, Forex, stocks, and cryptocurrency. Winnifred tailors her writing to various audiences, including beginners, while also providing useful insights for those who are already familiar with financial markets.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).