- December 28, 2017
- Posted by: Admin
- Category: News
Forex trading is a profession that involves buying and selling currency pairs. These currency pairs are based on a definite exchange rate. Sometimes the exchange rate is volatile, which can make the currency market unpredictable to investors. In ancient times currency, trading involved the process of exchanging coins, which depended on their worth. After the 1990s, Forex trading opened up a wide platform for everyone.
Every day, 5 trillion USD is traded every day. It is the only market in the world which is open 24 hours. Nowadays, it is the most popular online platform for earning money independently all over the world. As it is a huge market, the traders are often targeted by scammers.
Why is Forex susceptible to scams?
The overall process of trading is not very well balanced. The system is related to the broker’s activity, and the brokers have to register regulatory bodies like the commodity commission and the national association of Futures. The exchange rate for the currencies is very volatile. This is a reason for scamming. Many professionals from other sectors also make a consistent profit from this financial industry.
Newbies in Hong Kong enter the market with a view to earning money, but proper education and management are needed before doing that. The information is the same for all the trades. Some of them can manage to apply it in their activities. So the profit and loss are also dependent on your skills. If you invest in futures at Saxo, you can easily enhance your knowledge by using their free resources. Just with the help of a premium and well-regulated broker, you can boost your confidence level.
Different types of Scams
Manipulation of a point spread
This is one of the main scams that are found in the Forex industry. It is mainly computer manipulation of the ask-bid spreads. This often gives a positive result for the brokers. If investors want to make more money, they can increase the spread. Try to keep the sell and bid price between 9 and 10 pips, and then a good result will come.
It is actually made for the newcomers. It often refers to expert advisors or robot trading. These processes can continue the whole system without any help from humans. The other benefit is easy to use, and a short investment can be allowed. Independent testing and some formal data both are important in this system. But the use of historical data can also make a difference to your overall results. One thing should be remembered that scalping can cause a problem with this issue. So, try to avoid scalping; otherwise, it will decrease profit. Some investors do not trust it because knowledge of the algorithm is not used in this system.
This offers a particular system that can identify suitable times to buy or sell the currency pair to make the maximum amount of profit. Many financial companies, asset managers, or retail traders can all be signal sellers. In general, they offer different types of convincing testimonials, long-term experience, and successful trading abilities. These offerings often attract novice traders. Signal sellers try to give tips for exchanging the monthly or weekly fee. Both manual and automatic systems are included in this scamming process. Signal sellers also offer tips when you have already signed up with a suitable broker. They receive a commission from the brokers. Of course, there is a way to find out if it is a fake signal seller. They will disappear after taking your money.
Not all scammers are unsuccessful brokers. Sometimes they are unable to understand the market condition or do not have a suitable trading strategy so they fail. That does not mean they are scammers. Yes, you can tell that sometimes they cause more harm than other scammers. Try to find out these types of problems, so that you will be able to identify scams in the Forex industry.