How to Identify Fake MetaTrader Scams

Many traders focus on the broker aspect when avoiding scams. They don't realize that such frauds could also happen on the MetaTrader platform.

MetaTrader is the most popular trading platform in the world in which the majority of traders use it to trade forex and other CFD assets. Developed by MetaQuotes, the platform offers versatile features with beginner-friendly interface and reliable performance for analysis and execution.

However, there are fake MetaTrader cases almost every year that are quite concerning. Those who fell to this scheme lose all of their trading funds in an instant. Losing funds is just one risk, but your personal data can also be sold out there.

To avoid being scammed, it is important for you to identify the real MetaTrader and recognize the fake one. Some of the main aspects require you to:

1. Check the platform updates
2. Check the connection to the real financial market
3. Check the credibility of the broker

Most traders do not know the difference between fake and real MetaTrader because they appear identical. It should be noted that recognizing the real MetaTrader is more than just using the copyrighted version. As such, here are some ways to identify fake MetaTrader scams:

No Updates

In order to improve the stability and reliability of the trading platform, MetaQuotes frequently launch regular updates. They can cover user experience improvements, bug fixings, and function enhancements. None of these updates will be found in fake MetaTrader.

Since the fake MetaTrader is not an original product, it would not get the same updates as the real one. Important updates that often influence the platform's performance would not be implemented, so there would be glitches and problems once the fake MetaTrader officially becomes outdated. Such a situation could lead the fake platform to easily lose connection with the server, have problems in executing trades, and is prone to hacking risks. In the end, all of these will harm you as a trader.

Not Connected to the Real Market

Any trading platform, including MetaTrader, must connect you to the interbank market. It is where prices are formed and where the transactions of market participants take place, which results in a price feed and allows you to place orders.

At first glance, you will only see MetaTrader as a platform that can be operated on desktop and mobile. However, behind it, there is a fairly complex network. MetaTrader is connected in such a way to other parts, such as the data center, watchdog, administrator, manager (broker), report server, gateway to liquidity providers, data feeds, and back-office API. However, this complex architecture only exists in real MetaTrader.

Fake MetaTrader cannot be directly connected to the ECN bridge, so brokers cannot access the interbank forex market. This means that scammers who use fake MetaTrader are market makers who "create their own market" and only profit if their traders lose.

Unregulated

Regulated brokers are required to uphold standards that forbid them from violating MetaTrader copyright laws. Hence, it is highly unlikely for any regulated brokers to offer fake MetaTrader to their clients. Unregulated companies, on the other hand, are free to provide any platform they want regardless of their reliability status.

Unavailable on the Server List

One of the easiest ways to spot a fake MetaTrader is by searching the servers on the official website. From there, you will know whether the server exists or not.

If the server cannot be found through the first method, you can also double-check by asking the MetaTrader website contact. Brokers who use genuine MetaTrader will have their names listed in the developer company because the software can only be obtained through a special paid subscription. On the other hand, fake MetaTraders would not be registered on the official server list.

The Real Case of Fake MetaTrader Scam

On January 15, 2016, there was a report of a fake MetaTrader case in the ForexPeaceArmy forum that was quite shocking. Winson Soh, a trader from Hong Kong, claimed to have been scammed out of thousands of dollars by Leo Cheung. The fraud scheme started with Cheung offering a Managed Account located at fxgmr. Soh was not suspicious because the site looked official, and the trading history shown was convincing.

At first, trading went smoothly. Soh even managed to double his profits. Cheung then persuaded Soh to invite his friends their investment was very profitable.

However, all of his and his friends' accounts suddenly went bankrupt. This happened after the appointed trader suddenly managed to open buy and sell positions on the same pair in lot sizes far larger than the agreed-upon size.

Sometime later, Soh realized that the software installed by Cheung was actually a fake MetaTrader. The fxgmr server could not be found from any MT4 program because it made its own MetaTrader Program Installer.

Soh's experience is not the only case regarding fake MetaTrader scams. One could easily spot why he fell to such a scheme: failing to check the legitimacy of fxgmr as the platform provider. In fact, he only took a look at the website and seemed satisfied when it appeared to look official. He didn't bother checking on what is actually fxgmr, its regulatory status, and the MetaTrader updates.

Therefore, you could really apply the tips above to help you avoid getting trapped like Winson Soh. You could eliminate many dubious names just by paying attention to a broker's credibility and the way it provides the MetaTrader platform.

Now that you have learned everything about fake MetaTrader scams and how to prevent it, you may also need to be watchful of frauds related to MetaTrader 5 (MT5).