April 2024

Forex Scams


The global financial crisis has led people to resort to other means of getting money quickly such as online trading. Online trading is one of the fastest ways that a person can make money quickly without much hustle and it is also the fastest way that a person can lose money online.

Some of these forex scams look too good to be true, I mean from advertisements online to email pop ups and other forms of advertisements they strive to appeal to a person who is really in need of money and most people invest millions and millions of their hard earned money to scams.

You need to learn that even though some of these schemes look enjoyable and too good to be true, there is no guarantee that your dollars will be turned into billions.  These scams are everywhere in the world today, and most of them take advantage due to the fact that most people are not familiar with the currencies as they are familiar with the stocks. It is easier for these companies to misled people that they can make money by just a click of a button.

There is something that most people that are conned through schemes do not know about forex trading. It is beyond doubt that the forex market trades millions and billions in currencies each and every day which makes it the most traded market. For one to be able to trade on the forex market he or she should do when the market is inefficient hence making it easy to trade but as long as the market is efficient then it is very hard to trade. As long as there is deep liquidity, the market will always be very efficient. Most people do not know about this market inefficiency and how to exploit hence enter into all sorts of schemes then end up losing money.

What are the common types of Forex Scams?

The following are some of the common types of forex scams that you need to avoid:-

  1. The Automated trading systems/programs

These systems or programs are sometimes known as the trading robots. An automated trading system is a system which allows the traders to come up with specific rules for trading and once it is programmed, it is executed by the computer. When you have an online trader that is good in programming he is likely to come up with an automated system and also come up with a set of trading rules. This is an example of a system that is most likely to be successful. The problem that is out in the market is the fact that many of these traders are out to make money hence they sell unprofitable systems online and some of them look very realistic at first sight.

Many of these systems end up suffering from over-optimization. What normally happens is the fact that you have traders who create systems that look very good on paper but once launched live they fail or shut down. This is what leads to over-optimization, having a system an unreliable live trading system. This means that when some of these traders were developing such a system, their focus was on making a system that fits historical data. When you view this historical data, it gives you an impression that the company has been profitable in the past hence trustworthy but this is not the case. An over-optimization will always create a system that looks good on paper. Many people end up losing money because think that the history of the past will be repeated into the present and future.

  1. Signal services

The signal service is just similar to the automated system but in this instance, it’s the service that is sold out to you. They sell you a service that you will enable you or inform you when to enter a trade and when to leave a trade. The service has the same weakness as the automated system such that when the system fails then the signal service is also bound to fail.

You will also lose a lot of money in the long run since some of these systems are made to have a recurring monthly fee hence they have the ability to mint money from you each and every month. It would be wise to avoid such schemes.

  1. Managed accounts

This is a system where you hire a professional to manage your trading accounts for you since you are making a lot of money and may not have time to manage your own accounts. In as much as it looks good to outsource a professional to offer such a service for you, not all who are in the internet are there to offer you such a service. Most of them are there to con you and rob you of all your money.

It would be best to avoid these people who claim to manage your account on your behalf because most of them will con you and you will end up losing money that you had intended for good use. The only exception you can have for these managers is when you ask them to verify their papers from reputable institutions or else without that you still fall into the trap of forex scams.

With such information at hand and educating yourself more and more each and every day then it is very easy to know what forex trading but one of the most fundamental issues that most people underscore is researching and educating yourself on such issues. Avoid at all costs issues that will lead you to lose your money, even though it is said that there are forex brokers that are regulated it is also good to note that some of these brokers have in the past violated the forex regulations rules and are still allowed to continue until now.

Even though they look very promising and believable, be informed that forex scams are everywhere and the possibility of you losing money is very high.

If you feel you have been scammed by a forex company then contact Phoenix Advisors Group for help


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