How much do you know about the foreign exchange market? Chances are, not much. Most of us only think about the value of other countries’ currency when we’re planning a vacation or making a purchase from a foreign ecommerce site. Forex scam artists take advantage of this understandable ignorance in order to sell you an unrealistic view of what foreign exchange trading really looks like.
What is Forex Trading?
Forex trading involves trading on the value of various world currencies. By taking advantage of the fluctuating value of these currencies and how they change in relationship to each other, traders are able to make profits.
There are two main ways to trade forex. The first is to develop your own strategy and manually set up trades. In order to do this, you must have an understanding of how the market works. Traders rely on fundamental analysis, technical analysis, or a combination of the two. Fundamental analysis considers the intrinsic value of a currency and what factors are currently impacting it: economy, natural disasters, military actions, trade relations with other countries, etc. Technical analysis focuses instead on market behavior, interpreting charts and knowing trading patterns. Whichever technique traders choose to use, it involves a fair amount of time studying the concepts and paying attention to the market. When setting their own strategy, traders consider their risk tolerance and their goals, to decide how aggressive to be in their trading.
The other main method is to use an automated bot. These bots are programmed to make trades based on market behavior. Any given program will have its own built-in risk tolerance. A trader can choose to use a bot which takes big risks, allowing for significant gains or losses. Or they can choose a more conservative bot, which will take less risks, reducing the possibility for both gains and losses.
What you may notice is that whichever method you choose, there’s one factor that always comes into play: risk. That is because like any other form of trading, forex carries the inherent risk that you can suffer a loss when the market goes against you.
Forex Scam Artists Lie About Risk
When trying to sell you on a forex scam, the broker or recruiter will lie to you about risk. They’ll either claim that there is no risk, or that the risk is minimal. They’ll claim that their strategy, or their bot, is based on some secret method of gaming the system to ensure that you always come out ahead. They will often offer guaranteed returns, telling you how much you’ll make based on how much you commit to their scheme.
These scammers are counting on you to not know how the market works. They might point you to some cherry-picked examples of people who made a fortune on the forex market, ignoring those who either lost money or made modest gains. They will try to pressure you to act now, and to deposit more money than you can afford into your trading account.
Help is Available for Scam Victims
If you were tricked by a forex broker, online scam help is available. Claim Justice has extensive experience getting money back, whether from bank transfer scams or forex fraud. Contact us today to learn how we can help you recover what you lost to a forex scam.