ForEx Resources

Best Forex Trading Signal Section

• Home
• Videos
• Podcasts
• Sitemap

Custom Search

Best Forex Trading Signal Article

This is a selection made from among articles on Best Forex Trading Signal. For a permanent link to this article, or to bookmark it for future reading, click here.

Forex Scams: How to Spot Them a Mile Away

In recent years, investors have witnessed increased number of investment opportunities and offerings. While the complexity and success of these investment products vary, technological innovation has made the Forex market one of the fastest growth areas. Many of the leading Forex brokers reported up to 500% rise in the number of new retail customers. However, the growth of the Forex market has been accompanied by a sharp rise in foreign currency trading scams.
Many of these Forex scams are promoted on the radio, television, newspapers and the Internet. Investors who fall victim to these schemes, often lose all of their money.
As an illustration, let’s examine the facts of a recent case involving Forex fraud and its consequences. W learned of a foreign currency trading opportunity through an infomercial on the radio. K, the owner of a Forex asset management firm, spoke during the infomercial, promising viewers significant profits with minimum risk. After seeing the infomercial, W contacted K, and later attended a seminar presented by K and his firm. The seminar was so convincing that W wrote a check to K for $100,000.
Several months later, W received statements (which were false) from K’s firm reflecting significant returns on his initial $100,000 investment. Thereafter, W attended another seminar and decided to invest more money. W took a loan and invested another $800,000 in K’s Forex trading operation. Short while after W’s second investment, the Securities and Exchange Commission filed a complaint against K and his firm for engaging in a scheme to defraud investors. K’s firm’s assets were frozen, including the $900,000 invested by W. A receiver was appointed to distribute the remaining assets of K’s firm to defrauded investors. The assets were distributed on pro-rata basis with no legal preference given to any of the victims. Since K’s firm’s assets were not enough to satisfy all of the defrauded investor’s claims, W received only about $22,000 of the $900,000 he invested.
Since a whole book can be written on the various tactics and methods used by Forex scam artists, in this article, I will focus on the major warning signs that one needs to identify to avoid falling victim to Forex swindlers.

1. Promises of Little or No Risk
If you encounter a Forex firm that claims to have developed a foreign currency trading strategy that carries very little or no risk, stay away. The reason Forex trading can be very profitable is because it also carries a very high risk of loss. The Forex market is very volatile, and, without good money management, an investor can lose most if not all her capital within few days. Thus, individuals and firms who make claims that are far from market realities, as is riskless Forex trading, are really after your money.

2.Guarantees of Large Profits
Beware of firms that guarantee large profits in Forex trading. These so called “guarantees” are mere ploys to entice investors and make them believe that their money is safe and that they will definitely make large profits. Such claims are simply untrue, because even the best professional traders cannot guarantee that they will make a profit any given day. The Forex market, as most financial markets, is very unpredictable. Hence, be suspicious of such claims and those who make them.

3.Employment Ads For Forex Traders
Many Forex trading firms use employment ads to attract individuals with capital to trade using their systems. The employment ads, which often appear in newspapers and on the Internet, state that a foreign currency trading firm is looking for individuals to teach them how to trade the foreign currency market using firm capital. Those who reply to the ad are convinced by the firm that they will make a fortune trading currencies if they participate in the firm’s training program. During the training process, which often occurs on a demo system, the novice traders are encouraged and told that their demo trading records show that have made significant profits, that they are ready to make real money and would very successful. Despite the firm’s assessment of the novice trader as a brilliant newcomer, no firm capital is provided to the trader, instead the excited novice is told to use her own capital to trade using the firm’s platform. In addition to various fees imposed on traders using the firm’s platform, the Forex firm makes money as an introducing broker. Each time the novice trader trades through the firm’s system, a good part of the spread charged by the broker is shared and goes into the firm’s coffers. After few months, the novice trader loses all of her capital and leaves. The Forex firm, having made money during the novice trader’s short stint, moves on to new traders eager to become rich trading foreign currencies.

4.Is the Forex Firm a CFTC or NFA Member
Before you sign a check and give your capital to a Forex company, make sure you investigate the entity. Check to see whether the Forex firm, with which you want to do business, is registered with the United States Commodity Futures Trading Commission or the National Futures Association. Many scam artists falsely claim that their firms are registered with the CFTC or the NFA to gain a perspective investor’s trust. Do not trust anyone, research the firm and the background of the individuals involved before parting with your hard earned money.

The Internet has paved the way for many new opportunities for retail investors. The Forex market is both exciting and fast paced. Investor’s who are careful and diligent are likely to avoid the perils of this market, and will profit from the growth and opportunities of foreign currency trading.

About the Author

John Bekian is the founder of www.electronicforextrading.com, an informative resource for novice and professional Forex traders.

Leave A Comment!

Close Your Name Email Address Add Your URL Your Comments Enter Captcha Code Shown To Left

Show All CommentsHide Most Comments | Post Your CommentsHide Comment Form

Additional Sponsors

Other Best Forex Trading Signal Related Articles

Forex Why Psychiatrists Make Better Traders Than Expert Economists
A Look At Online Forex Brokers
Forex Trading And The Obsession To Win
Forex Trading Software
Getting A Forex Trading Education

Do you want to contribute to our site: Submit your articles - HERE

Best Forex Trading Signal News

Forex Trading Signals Forecast GBPUSD Gains.

Summary: Our Forex Buy/Sell Trading Signals have been aggressively buying the British Pound against the US dollar, with three different trading signals forecasting Our Forex Buy/Sell Trading Signals have been aggressively buying the British Pound against the US dollar, with three different trading

Publication: Mena Report

AKFOREX Announces the Release of Their Automated Forex Trading Signals.

May 04, 2009 (PRWeb.com via COMTEX) -- AKFOREX offers Automated Forex Trading Signals AKFOREX releases a web-based version of its automated online forex trading platform. The web-based version of the currency trading platform provides individual forex traders access to hundreds of forex trading

Publication: PRWeb

Forex Trading Signals Forecast US Dollar/Japanese Yen Declines.

Summary: Our Forex Trading Signals forecast that the Japanese Yen will continue to appreciate against the US dollar, as our Eoe1/4EoBreakoutEoe1/4Ci forex trading strategy has Our Forex Trading Signals forecast that the Japanese Yen will continue to appreciate against the US dollar, as our

Publication: Mena Report

Trading Signals System Takes the Guesswork out of Forex Trading.

Forex trading just became a little easier thanks to Forex Signals from www.SmartForexSignal.com. This automated trading signal system sends you up to the minute trading recommendations from professional traders. You lower your risk of losing money in the Forex market when you use these Forex

Publication: PRWeb Newswire

FXCM Offers Free Forex Education and Free Forex Trading Signals for the CNBC.com Million Dollar Portfolio Challenge.

NEW YORK, June 9 /PRNewswire/ -- FXCM (httpwww.fxcm.com the official currency-trading sponsor of the CNBC.com Million Dollar Portfolio Challenge, announced today that it is providing all contestants of the virtual trading competition with free forex education and trading signals to optimize their

Publication: PR Newswire