Is there such a thing as MetaTrader 5 scam? Believe it or not, many have questioned MT5's safety when the problem comes from the brokers that provide it.

MetaTrader 5 is a highly popular platform for forex trading. It is trusted and widely used by many forex traders due to the level of security the platform offers. However, there have been reports of scams while using this trading platform. Let us start by briefly explaining what MetaTrader 5 is all about.

MetaTrader 5 Scam

MetaTrader 5 is a software developed by MetaQuotes five years after the release of MetaTrader 4. It was developed to offer new features and improvements to the existing features on MetaTrader 4. MetaTrader 5 also offers more sophisticated graphics and analysis tools that are much better than the ones on MetaTrader 4.

This now begs the question, "Is MetaTrader 5 a scam?"

MetaTrader 5 is not a scam. MetaTrader 5 is just software that links to various trading platforms and enables trading via personal computers and smartphones. It basically serves as a bridge between brokerages and traders so that traders can receive quotes and place orders.

The MetaTrader 5 scam is not connected to the platform itself as there is nothing fraudulent about the MT5. If a trader should lose money on the MT5 platform apart from the usual price fluctuations, then it is likely that they're dealing with fraudulent brokers. These fraudulent brokers are the ones running a MetaTrader 5 scam and we will now be looking at some of the methods used.


1. Exaggerated EA Earnings

EA which stands for Expert Advisor is one of the features seen on the MT5. It is an automated program that combines the judgment, logic, and algorithms of an investor into the computer. It then uses this compilation to place orders automatically once certain conditions are met. When compared to placing trades manually, EAs can ensure that orders are placed faster and more accurately. At the same time, it ensures the orders respond quickly to changes in prices and trends in the market.

Some fraudulent brokerages then capitalize on the benefits of MT5 automated trading by making up extremely low-risk and profitable scams to entice traders. Once traders get attracted to said automated trading, they become exposed to liquidation/burst positions, retractions, or even end up losing all their trading funds.


2. Development of MT5 Platforms that are Pirated

Due to the open API interface of MT5, it has been possible for fraudulent platforms to develop their pirated versions. Sometimes, the pirated version can be so good that they do not differ too much from the original. Since the developers of the pirated versions are usually in complete control, the specific quotes and spreads tend to be different from the real data. However, the variation will not be too contrasting to draw attention but it will be sufficient enough to erode a lot of traders' profit over time.

These pirated versions also pose problems of regular disconnections and fluctuating transactions, where it becomes impossible for the transactions to be successful and traders have trouble in opening or closing positions accurately. All those difficulties usually end up in significant losses for traders.


3. Running Promotions under the Name of MT5

Some fraudulent brokers run promotions for MT5 by posing as customer service agents. They encourage people to open an account with MT5 while recommending their brokerage services for trading. However, MT5 does not run a promotion service for general customers but rather for registered brokers with legal operations. So, getting contacted by anyone claiming to be MT5 customer service is a red flag that traders should watch out for.


How to Fight MT5 Scams?

As a trader, you have to be vigilant about the broker you decide to deal with as this will help protect you from exposure to MT5 scams. One major thing to check for is the regulatory agency in charge of that broker.

Among various regulatory bodies that exist for forex trading, there are top financial regulatory agencies like the Financial Conduct Authority (FCA) in the United Kingdom, the Australian Securities and Investments Commission (ASIC), the Cyprus Securities and Exchange Commission (CySEC) which is responsible for the European Union, the Swiss Financial Market Supervision Authority (FINMA), etc The financial regulatory licenses of any potential broker should be verified to be sure that any of the aforementioned agencies truly licenses the broker.