“Become rich by trading on Forex with our superpower forex techniques. It’s simple and accessible to everyone 24 hours a day from your living room”! Thanks to many trading platforms that have developed over the past few years, Mr. Anyone can become a real trader. Well, it smells like a bit of a scam. So, is forex trading a scam, or it depends on the personal experience of those who lost money on Forex due to a lack of precautions. Let’s see what’s the truth and if a forex scam really dominates the market.
How does the Forex market work?
The foreign exchange market is the market in which currencies, such as the euro or the dollar, are exchanged. Therefore, becoming a “trader” on Forex consists of betting or speculating on the euro’s rise against the dollar. If the euro increases against the dollar, you win; if the euro depreciates against the dollar, you lose. Simple isn’t it? This market’s advantage is that it is open 24 hours a day and that significant leverage effects can be used. Effects of what? Leverage allows you to multiply your gains during positive movements (for example, if the euro goes from 1EUR = 1.25 USD to 1 EUR = 1.26 USD, instead of gaining $0.01 if you have a leverage of 10, you will earn $ 0.10. The leverage works upwards and downwards: your gains and losses multiply by a constant equal to the leverage.
The most common types of forex frauds
With the development of fintech software, we are also witnessing the deployment of trading robots. Their primary function is to help more experienced traders to set up their automated trades and to ease their everyday tradings in that way. However, many brokers will approach you to lure you with their magical algorithms and guarantee you immense profits in no time. Beware, since there is no such thing as magic trading software. To make the best of it, you should have at least some basic knowledge of the market and take advantage of it and note the vice versa.
The other widespread type of sneaky forex offers is account management. Some so-called traders operate individually or as a part of the companies offering you forex account management but just to play on your inexperience. They will promise you to implement winning strategies on your currency positions while only implementing the churning technique to abuse your trust. Account management, as such, can be a good thing, especially for newbies, but just in case you choose the right broker. To determine the best one, be sure to check forex brokers reviews. In that way, you will be in a position to find a reliable account manager that will handle your money responsibly.
And finally, we must mention here the forex signal traders you must absolutely avoid if you don’t want to get robbed in a glimpse of an eye. They are very determined when it comes to trying to sell the information that will make you rich overnight.But also they will reach you out without any relevant proof of their trading success other than suspicious screenshots and messages of their “happy clients”. Runaway from them and save you from many troubles.
Behind the apparent simplicity of forex trading hides one of the most complex markets to predict. In the short term, the foreign exchange market follows a random market that means it is impossible to predict the evolution of a currency’s price in less scientific terms. What can you do about this? The best thing to do is to follow trends, news, and even politics and invest in training since it will help you learn how to analyze the forex market the right way and fully leverage it.