There is a bad impression of what is the currency market in general, due to different types of forex scam schemes made by individuals who have nothing or little to do with the Forex market.
“Forex Scam” You’ll probably never hear anything like it :-).
The Market Forex Scam
Aggressive advertising that tries to persuade the new traders.
In this picture, we see a cut of very aggressive publicity.
They try to touch the greedy subconscious of the human being. To supply you with the need for obtaining great benefits in a short period. This kind of companies is practically competition for casinos and the lottery.
The creativity that we can see in the elaboration of these scams is impressive.
But Forex scam? no, IT IS NOT.
People scam other people with the excuse of investing in the Forex market.
Anything that implies a payment from you in exchange for obtaining a good or service, using which you do not receive the acclaimed benefit, constitutes a scam or a forex scam, based on our subject. And if that person or company relapses into his/its action, he becomes a scammer.
There are many ways or faces of a forex scam through the Forex market. Let’s see the most common and especially how to avoid falling into the trap of these sellers of illusions by not getting the desired benefit in exchange for our money.
- High-Performance programs
Remember, the most important thing is to know how to identify them.
A robot constitutes an undisputed Forex Scam unless you’re willing to buy a new one every month.
Forex Scam is the fact of selling the idea that an automated system can make you a trader. The answer is NO. “It makes you a robot assistant.”
The Forex Scam also lies in making you believe that having a robot is just attaching it to your MT4, and forget about everything else and withdrawing your earnings every month, forever.
Automated systems valued at $100 or 500 dollars can do very little. If they were profitable, they wouldn’t be on sale for that kind of money. The programmer would have to get into the trouble of offering it to some financial firm or some investor.
There are likely to be some profitable out there, but the changing dynamics of the Forex market ensures that the effectiveness of these such robots disappears and must be adjusted by their programmers.
Unlike the algorithms or “Expert Advisors (EA)” developed for MetaTrader. The automated systems of speculation (High-Frequency Trading) which are the real beasts used by large financial houses to handle the “depth of markets.” And to withstand the most significant percentage of transactions in the Foreign Exchange Market. They need very high Internet speeds and to be located at short distances from the Electronic Network Centers (to compete with other HFT) and an acceleration system of Hardware which is extremely expensive.
Without ignoring the data prices, engineers, mathematicians, professional speculators and a high capital to withstand the bad trades and “constant adjustments.”
This type of algorithms moves 90% of the volume of the market, and nowadays all positions of aggressive funds are made with HFTs.
All the Brokers which charges NO commissions are scammers paying the forex scam game. In the article, I will describe this kind of Brokers inside type NDD and type NDD-STP.
Apart from inflating “the spread” considerably, these Brokers do not allow must of the time instant executions (“re-quote” or “requote”), completely distorting by doing this, the stock market reality. The Forex scam NO IT IS NOT, the synthetic Brokers do.
When you get to trade through one of these companies you are not participating in the real Forex market, you’re just taking part in a little game against your Broker.
Something very similar to playing a video game.
Transactions are fictitious, and you are not connected to the real market. So, your data and your charts are synthetic, fake or in the best scenario manipulated.
When opening an account with an ECN Broker and watch the maximum and minimum price on any given day and compare them with a synthetic Broker. Usually, the maximums of an NDD or NDD-STP are lower, and the minimums are higher, distorting and influencing your decisions to place orders of risk (Stop Lost).
Thinking about this forex scam thing?
Regarding trades, there are many other ways to deceive customers. But the most important thing is not to find yourself trapped in a Broker that is 100% a Forex scammer. These Brokers after gathering a large amount of deposited volume, they just disappear.
It’s straightforward to spot a phantom Broker.
They have not registered in any government agency, and their business history is quite short. Nor do they have affiliations with other financial institutions.
The pyramid schemes in Forex have been widespread in the past. The pyramid scheme has been used in multiple variants, and the Forex theme has not been the exception.
Using the Forex market to create pyramidal companies has been a very creative move. Forex, being a subject little known to most people, had all the qualities to be 100% credible because it was a real investment mechanism.
The main feature of a pyramid scheme is the high performance offered to its customers, the bait. It’s usually too good to be true. Promises of solid returns above 20% per month are suspicious. If true, any bank would be more than happy to hire you to handle some idle funds.
- Other features of a pyramid Forex Scam are:
- A great sense of urgency for you to start investing
- Promises that earnings will be constant
- They claim that investments will be free of risk
- Lack of information material on strategies and the company
- They avoid talking to your lawyer or accountant
- The owners never show their faces, only the captors
- Have no legitimate references from banks or other institutions
- They do not have legal documentation that they can provide to their clients
- Use the phone or the Internet to capture their clients
- Nobody knows them. Short business history, or perhaps none
- They do not allow you to contact another employee of the company
- Promise very high monthly returns
All of this is done in a very subtle way using different tactics of oratory to divert his attention and not arouse suspicion, always presenting valid and argued excuses to answer any critical question on the part of the client.
The Forex market itself scams NOBODY. The Pyramids do. The case of Forex finance is one of the most famous.
High-Performance Programs are quite common in Forex. They are relatively similar to the pyramid scheme as far as the facade is exposed to their customers.
The operation may vary somewhat, in the sense that these programs try to keep the customer as long as possible. You usually deposit money into an account to be withdrawn within 90 days, 12 months, or whatever the scammer’s request is.
When the day of retirement arrives, the company begins to send you excusing notifications for not being able to return your money “at that time.” These excuses tend to repeat themselves until you give up, or until you take the matter from a legal perspective. But it’s usually too late.
Forex scams NOBODY. High-Performance Programs do.
Forex Tutorials. The Disguised forex scam.
Many people do not consider Forex tutorials as a scam, due to the low cost they are offered.
But it’s the easiest way to scam people. Many courses or tutorials promise you that you will earn a lot of money by speculating the Forex market once you learn the new foolproof method to think.
The tutorials have many presentation modalities. Can be on DVD, ebook format, face-to-face (seminars), or even online (webinars). The fact of thinking that a tutorial will give you the knowledge to become an expert in any subject is unheard of. Intensive training, needed to develop permanent skills.
Many seminars, been face-to-face or online (webinars), are in many cases a waste of time and usually serve as propaganda for exhibitors.
Some forex scam analogies!
You wouldn’t be able to become a race car racer attending a 2-or 3-day seminar. It does not matter if the workshop was given by Michael Schumacher himself in person.
Now, if Michael invites you to be his assistant in “the Wells” for 25 F1 races, your story would be very different.
In short, books and seminars do not make teachers. Practice does.
It would be like selling a tutorial to become a surgeon. Imagine these ads on the Internet (I do not doubt that one day it happen):
- “Participate in this 2-day seminar and become a successful surgeon.”
- “Learn all the techniques and strategies for open-heart surgery in 7 steps.”
- “10 modules that will teach you how to become the best doctor in the world, guaranteed.”
- “Download this ebook for $97 and start to perform a bypass immediately.”
- “Foolproof method to become a surgeon.” “Start a heart transplant today.”
I don’t think you are in need of more examples. 🙂
Instant success doesn’t exist, only in the lottery. In speculation, as in any other career or business, you will need time, capital and effort.
Don’t fall into the forex scam predators’ trap and take good care of your capital.
You can’t become a professional speculator/trader, even if you read this and another 200 tutorials, hundreds of times. Do not stay confused by the advertising efforts of the suppliers of such tutorials. The tutorial is just theory; then it’s up to you to put all the quality knowledge into practice.
Forex scam NO IT IS NOT.
You could dupe yourself by wanting to cover the sun with a finger. We both know that no one can become an expert in any matter overnight. The career of a professional speculator begins with quality education, followed by a lot of daily practice under proper supervision.
If you like this forex scam article, I will appreciate your comments.