Forex Trading: How to Detect Scammers
By: Terry Allen
Unfortunately, Forex provides a feeding frenzy for the scammer. This is because Forex has a colossal daily turnover of about three trillion dollars which makes many FX novices think that they can readily obtain a slice of the action. In addition, they are further seduced by powerful publicity that convinces them that they will be rich in no time at all.
However, reality quickly crushes their unrealistic expectations once most Forex beginners commence trading. Their resultant despair and frustrations then make them search desperately for any and all quick-fix solutions. As a consequence, an enormous Forex market is generated by this worldwide phenomenon that is a godsend to FX scammers.
A good way to understand the extent of this problem is to imagine the distribution of Forex traders as a very large pyramid with the 5% of successful traders at the top. If you are a novice, then you will form part of the gigantic base of this structure. Forex scammers usually reside between the top 5% and the bottom 10%. As such, the majority of these individuals are just failed Forex traders.
Basically, they have tried to construct their own FX strategies, but were unsuccessful in solving the many complexities inherent in Forex. They may have even achieved some degree of accomplishment by trading profitably albeit for short periods only. They almost certainly would have failed to cope with the problem of optimization, which is created by Forex constantly changing its trading patterns over time. As many Forex scammers produce Forex robots by coding their flawed trading strategies, it is little wonder that most FX bots do not work. How can you protect yourself from the Forex scammer? Here are some ideas that may help you detect their dross:-
1. You can obtain many clues from their advertising literature. For instance, are there any real specifications stated that can actually be verified? If you find yourself reading just a long driveling sales letter supported by a string of autoresponder letters with ludicrous headings, then you are almost certainly dealing with a FX scam.
2. Does their literature state unrealistic performance factors? If you read statements claiming ‘our product can make you 100% return in a matter of days’ or ’we can help you achieve 100% trading success’, then beware. In reality, such specifications are almost impossible to achieve.
3. The Forex scammer will try to attract your attention by using sensationalized advertisements. For instance, they will make great use of words that generate powerful marketing impacts and will deploy them at all possible opportunities. Such a word is ‘secret’. Watch out for titles such as ‘The Five secrets that Expert Traders are not telling you’ and ‘The Shocking Secrets of Forex’. The only secret that FX scammers possess is how they can produce such prolific amounts of gibbering rubbish.
You must always seek sound Forex education in order to provide yourself with realistic Forex objectives and a powerful trading mindset so that you can prevent yourself becoming the Forex scammer's next victim.