Instagram forex traders have been operating un regulated for years. Many well known reality TV stars and influencers have endorsed various traders over the years.
What are forex traders?
A trader is a person that sells stocks, trades or commodities within a financial market. For traders to operate they are required to have the relevent qualifications. Usually a degree in accounting, economics or banking would be sufficient. Instagram traders ‘social traders’ trade online with the help of others. However forex traders are slightly different. Copy trading or advising someone how to trade is illegal, according to trading officials.
The FCA says.
‘Social media sites are increasingly littered with bogus Forex traders, with the hashtag #forextrader attached to more than 4million posts on Instagram and a total of £27million lost to such schemes in the UK in 2018/2019.’
Instagram Forex traders and influencers
This new generation of financial traders lure people in by posting flash cars and wads of money all over social media.
Furthermore it’s not only the lure of luxury online traders use. They rely heavily on celebrities and influencers endorsing their services. The use of influencers makes social trading more credible, when associated with a known brand or person. As these traders are asking people to invest large sums of money, credibility is essential.
Beneath the shiny surface these forex schemes are nothing but new age pyramid schemes. The traders main source of income is money made from recruiting.
FX traders on instagram are essentially MLM marketers.
When Instagram FX trading goes wrong
In a post to his 1.3M followers Geordie shores Sam Gowland endorsed ‘trade like Ross’ website. Trade like Ross seems to have dissolved since the post from January 2018. In screen shots from the post Sam shows his enthusiasm for forex trading.
However disgruntled customers have taken to trust pilot to warn people of this alleged trading scam. One reviewer wrote
” Used rosses signals for 2 months. Terrible is an understatement. Lost £400 in 1 week when you question him he gets angry and blocks you he also wants you to use gardening platform through a link he sends you which he then makes more money through there. Don’t believe me go ahead and try him out. Good luck. Ull need it”
The financial conduct authority said in a statement:
‘ UK consumers are being increasingly targeted by unauthorised forex trading and brokerage firms offering the chance to trade in foreign exchange, contracts for difference, binary options and cryptoassets.
They promise very high returns and guaranteed profits, either through a managed account where the firm makes trades on the investor’s behalf or by trading using the firm’s trading platform.’
They went onto say:
‘ You should check the FCA register of authorised firms before dealing with any firm.
If they’re not authorised by us, it’s probably a scam. You can also check the warnings list of firms to avoid.’
If it seems to good to be true, in this case it is.