Red flags and due diligence

Some warning signs are so reliable they are effectively diagnostic. Learn them and a great deal of the danger evaporates.

Red flags that should end the conversation

• Guaranteed returns. No one can guarantee a return in a market that can move against them. The word "guaranteed" is, by itself, a reason to walk away.
• The smooth, ever-rising equity curve. A real strategy has losing periods. A curve that only goes up — especially one driven by a martingale (doubling the size after every loss) — looks beautiful right up until the one streak that wipes the entire account to zero. Martingale curves are gorgeous until they are catastrophic.
• Pressure and urgency. "Only 3 spots left", countdown timers, today-only pricing — manipulation, not analysis.
• Opaque or no verification. Screenshots instead of broker-verified statements; refusal to show drawdown; a hidden methodology.
• No mention of risk or loss, ever. Honest educators talk about losing. Sellers of dreams do not.
• Unregulated promoter recommending specific buys. See the next chapter — in Brazil this can itself be illegal.

Practical due diligence

1. Demand a long, verified, cost-inclusive record with drawdown and a large sample.
2. Test on a demo account first, in real time, for a meaningful period — never with money you cannot lose.
3. Check regulation and identity — who are they, where, and are they authorised to do what they are doing?
4. Search for complaints — withdrawal problems are the loudest alarm.
5. Risk only what you can afford to lose, and keep any single provider to a small slice of your capital.

The unifying rule: if it sounds too good to be true, it is. Scepticism is not cynicism here — it is the single most valuable risk-management tool you own.