Forex Trading Scams – How to deal with that

Revealing Forex Trading Scams

What is forex?

The world’s largest trading market, The foreign currency exchange market, known as the Forex market (FX), dwarfying the Stock Exchange in size with nearly US $6 trillion traded every day. The Forex market is open 24 hours a day, when trading closes to New York its starts again in Tokyo and Hong Kong. Currencies are ALWAYS trading in pairs, one example of that is US Dollar ($) with the UK Pound(£) or the US dollar($) with the EURO. The market is open with constant price fluctuations this tumultuous market is making Institutions, Furthermore companies, and some individuals a great deal of money.

How is the price determined in the FX Market?

First of all, it is very important to understand that most of the Forex trading happens in the spot FX market, in that currencies are physically exchanged in real time when those transactions are made. Whereas in the futures market the date the trading price is determined and the date the currency is exchanged are different.

How to determine the reliability of a Forex company?

Point to the following features of the Forex market that make it susceptible to Forex trading scams and Forex Frauds:

• Currencies are traded via PC networks between one trader and the next, most likely referred to as over the counter (OTC).
• High leverage – This is basically a loan by the broker to the trader allowing the trader at a margin. A typical margin ratio can be around 50:1 up to 200:1.
  The leverage depends on the amount of currency being traded. The ONLY reason brokers can offer such high leverage is because currency fluctuations in the Forex market are usually about 1% to 3% during any trading. However, even with small fluctuations in the Forex market high leverage attracts inexperienced investors in.
  Investors who many think the Forex market is a get rich quick market.
• There is no regulated centralized exchange. 

Forex Is It a Scam?

Overall the Forex market is a legitimate trading market, A Market where the world’s currencies are traded. It is not a scam in itself. Without the Forex market it would be difficult to trade the currencies needed to buy imports or sell exports to go on holidays, Also could do cross-border business. Nevertheless, with high leverage positions in theory, a client have the potential to make traders a lot of money and of course because of there is no centralized/regulated exchange. Therefore scammers take advantage of the situation and the inexperienced traders that desire to make a profit in the market.

First of all, it’s important to understand that the Forex market is a “zero-sum” market, meaning that for one client who trade’s to make a profit, another trader in the field will need to make a loss, the Forex market does not itself add value to the market. Because of that more currency movements are related directly by large well financed corporate institutions and banks, who are mostly better informed about the market as a whole, the undercapitalized traded is always likely to lose. Institutions and large banks trade in Forex on a daily basis. That is in order to make a significant profit in the Forex market takes a considerable learning curve.

Forex scams – What should you know before entering the market

Here, we provided you couple of Forex scams.
There are many types of scams those days involved in Forex fraud

Signal sellers

The signals scam is a type of scam that can be monitored by a person or a company selling information about trades, The purpose of that is to inform their clients about profitable trades before they happen. This information is based on professional forecasts which are guaranteed to make money for the inexperienced trader. Usually, in those kinds of trade they charge either a daily/weekly/monthly fee for this kind of service, Nevertheless do not offer any information that helps the trader to make a real profit in the Forex market.

Software scams

There are many times of software scams in the trading market, There all involve with different types of robots that suppose to take the right decision in any given moment of the market. Therefore Forex robots scammers lure novices with the promise of making high profits by give a little effort or knowledge. They may use of fake or misleading figures to convince customers to buy their products. Their promises are flawed as no ” Crypto-Bot” or any kind of bot can adapt and thrive in all environments and markets. Software’s generally used by very trained traders only to analyze past performance and to identify trends. Software should be formally and independently tested but caution is required when trusting the reviews themselves as these can easily be paid for. But if their products did exactly what they claimed then they would NOT be selling it but instead using it exclusively themselves.

Manage different types of accounts

This scam is a very common one, These accounts can be a type of Forex scam and there are indeed many examples of managed accounts. These scams often involve a scammer trader taking your money and instead of investing it, they use it to buy themselves anything you would imagine. When the client who is the victim eventually asks for their money back they just disappear leaving the client wallet empty.

Ponzi scams

These are very common frauds for many years. They promise high returns from a small initial investment up front. The inexperienced investors usually do gain some sort of return for their initial investment, that is to motivate them by their perceived success they then recruit more money to invest and also try to convince their friends and family to join the ride. However, the truth is that the “investment opportunity” doesn’t actually exist and their initial return is being funded by money paid by another customer of the company. When the investor numbers start to drop the scammers close the scheme and disappear with the money.