The in-platform trade feed fabrication scam occurs when a broker manipulates or falsifies the trade feed visible to traders within their trading platform. In this scam, the broker shows false or misleading trade data, such as fake prices, fabricated trade volumes, or fake executed trades. This is done to deceive traders into thinking that a particular trade or market movement is happening in real-time, when, in fact, it is a fabricated feed designed to mislead. Traders may act on these falsified signals, making decisions that ultimately benefit the broker rather than the trader, especially if they lead to forced losses.

This isn’t just a system glitch—it’s a deliberate manipulation of the trade feed to exploit traders and withhold profits.

How the Scam Works

1. Broker Fabricates Trade Feed Data
A broker using this scam will alter or fabricate the trade feed seen by traders on their platform. This can include:

• False price movements that do not reflect real market conditions
• Fake trade executions showing trades that were never actually placed, often to create the illusion of market momentum
• Manipulated bid/ask prices that differ from actual market prices to mislead traders into making poor decisions
• Fake volumes that suggest significant market activity, even when there is none

This manipulated trade feed creates a false perception of the market, leading the trader to believe that they are making informed decisions based on accurate data.

2. Trader Acts on the Misleading Feed
Seeing the falsified market movements or fake trade executions, the trader believes that the market is moving in a particular direction and makes trading decisions accordingly. This could include:

• Entering trades at misleading prices
• Following fake trends or price reversals, believing them to be legitimate
• Making quick trading decisions based on the fabricated volume or activity in the market

Since the trader is acting on false data, they are misled into making decisions that are detrimental to their portfolio.

3. Broker Profits from the Misleading Data
As the trader makes decisions based on the fabricated trade feed, the broker is able to:

• Take the opposite side of the trade, profiting from the trader’s losses
• Manipulate the trade execution by executing trades at worse prices or widening the spreads, ensuring that the trader loses out
• Prevent the trader from making profitable trades, as the fabricated market data is designed to mislead them into poor decisions

The broker is then able to capitalize on the trader’s losses, benefiting financially from the deception.

4. Trader Realizes the Deception Too Late
Over time, the trader may begin to notice inconsistencies in their trades and realize that the prices or movements they are seeing are not in line with real market conditions. However, by this point, the trader has already experienced substantial losses and may feel unable to recover their funds.

At this point, the broker may also prevent the trader from withdrawing funds, citing various reasons such as security reviews or system errors, further trapping the trader in the scam.

Real Case: Fabricated Trade Feed Leads to Unwarranted Losses

A trader using a broker’s platform notices that the market for EUR/USD appears to be moving rapidly in one direction, with large price spikes showing on their platform. The trader sees what appears to be massive volumes and is convinced that a major market shift is occurring.

Acting on this fabricated feed, the trader enters a buy position, expecting the price to continue rising. However, the broker’s platform continues to show a reversal in price, and the trader ends up with a loss on the position.

When checking prices on other platforms, the trader realises that the price movement shown on their broker’s feed was not happening in real-time and that the price they entered at was not reflective of the actual market. The trader now faces severe losses and is unable to withdraw funds because the broker continues to delay the process with vague explanations.

Why This Scam Is So Dangerous

The in-platform trade feed fabrication scam is highly dangerous because:

• It misleads traders into making poor decisions based on falsified data, leading to significant financial losses
• It creates a false perception of market movements, making it impossible for traders to rely on their analysis or strategies
• It exploits traders’ trust in the platform, especially if the trader believes they are trading on real, live market data
• It erodes the trader’s confidence in the market, as they may feel that they cannot win or make profitable trades due to the broker’s manipulation
• It makes it difficult for the trader to recover their losses, as the broker may continue to manipulate the feed or prevent withdrawals to retain the trader’s funds

This scam not only harms individual traders but also undermines the integrity of the trading environment, making it harder for traders to succeed.

How to Detect the Scam

1. Inconsistent Price Movements and Price Gaps
If you notice unusual price movements, gaps, or spikes in the market that do not align with actual market conditions, this could be a sign of a fabricated trade feed. Look for:

• Price changes that are out of sync with other platforms or financial news sources
• Fake volume spikes or price movements that don’t match actual market activity
• Erratic or sudden reversals that occur only on your broker’s platform but not on other, independent price feeds

2. Delayed or Inaccurate Order Execution
If you experience significant slippage or order delays after entering a trade, particularly when the market appears to be moving in your favour, it may indicate that the broker is manipulating trade execution based on fabricated data.

3. Unusual Spread and Execution Conditions
Check whether the broker has unusually wide spreads or poor execution when prices are volatile or moving in your favour. Reputable brokers should execute trades promptly and accurately without creating excessive spreads during fast-moving markets.

4. Customer Reviews and Complaints About Trade Execution
Search for reviews or complaints from other traders regarding issues with false price feeds, delayed order execution, or inaccurate market data. If multiple traders report similar experiences, it’s a strong indication that the broker may be engaging in feed fabrication.

How to Protect Yourself

1. Choose Regulated Brokers with Transparent Practices
Always opt for brokers that are regulated by respected authorities, such as the FCA, ASIC, or CySEC. Regulated brokers are required to provide fair trade execution and transparent market feeds. They are also held accountable for any false representation of trade data.

2. Compare Prices Across Multiple Platforms
Check the price feeds on multiple trading platforms to ensure that the prices shown on your broker’s platform are aligned with the market. This will help you detect any discrepancies in the data.

3. Use Reliable Platforms and Third-Party Tools
Consider using third-party tools or platforms to verify price movements, such as TradingView, Investing.com, or other charting tools. These platforms often provide accurate real-time price feeds that can be used to cross-check your broker’s feed.

4. Avoid Brokers with Unclear Trade Execution Policies
Read through the broker’s terms and conditions to make sure they are clear and transparent about their trade execution and market data policies. Avoid brokers that have vague execution practices or that do not disclose how they handle price feeds and trade execution.

5. Withdraw Funds Regularly
To avoid losing significant amounts due to manipulation, make sure to withdraw your profits regularly and keep your account balance smaller to limit exposure to potential scams.

Regulatory Expectations

Under MiFID II, FCA, ASIC, and CySEC regulations, brokers must:

• Provide fair and transparent market execution, ensuring that price data is accurate and reflective of real-time market conditions
• Ensure that trade feeds are not fabricated or altered in any way to benefit the broker or disadvantage the trader
• Allow traders to access accurate and live price feeds, and not manipulate data in a way that benefits the broker
• Clearly disclose all conditions related to trade execution and slippage, and ensure that traders are not misled by fake market movements

Failure to comply with these regulations can lead to fines, sanctions, or license revocation for the broker.

Conclusion: If Your Trades Are Based on False Data, It’s Time to Act

The in-platform trade feed fabrication scam is a manipulative practice where brokers falsify trade data to mislead traders into making poor decisions. By altering price feeds, introducing fake price movements, and delaying profitable trades, brokers create a deceptive environment where traders cannot make informed decisions.

To protect yourself, choose a regulated broker, always compare prices across multiple platforms, and monitor your trades for any signs of manipulation. If you suspect manipulation, escalate the issue to a regulatory body for further investigation.

To learn more about safe trading practices and how to avoid scams, enrol in our Trading Courses. We’ll teach you how to navigate trading platforms and ensure that you’re trading in a fair, transparent environment.