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How to avoid forex scams
Written by: PaxForex analytics dept - Tuesday, 11 November 2014 0 comments
Given the strong growth trajectory of the forex market which set it apart as the world’s most liquid and largest financial market of the world it is only natural that a small segment of the retail market is inhabited by scammers who try to capitalize on both the popularity and growth of the forex market and the drive by new forex traders to achieve large profits with small capital in an even smaller amount of time. This is the perfect scenario for scammers to reach out and realize the dreams of new traders by riding the lack of knowledge wave.
There are new forex scams popping up every day, but the basic approach is the same: use the desire to earn money through forex trading among new and uneducated/inexperienced traders in order to market and sell them courses, tools and expert advisers/trading robots for a fee while promising success. Often you will find plenty of account statements to support the success story and the less informed a trader is the easier it will be for scammers to talk them out of cash in return for something of small value in the best case and no value in the worst case.
Let’s take a look at the two biggest scams in the forex industry: seminars/lessons/schools and expert advisers/forex robots. A lot of new traders thing that trading forex can be taught in a classroom environment which boosted the rise of forex schools and even so called universities; just try to run an online search on forex classes and you will find more courses to take and even attend than you have money to pay for. While there may be some good ones out
there as a general rule of thumb consider this: A true forex trader will spend available time trading and enjoying the benefits of it. So who teaches? Scammers and those who have failed to make money trading.
Forex is not taught in a classroom which is why it is not offered by universities and other institutions of higher learning the way lawyers, doctors and engineers are educated for example. In addition all the material you may be presented with at a paid course you can find online for free. Just take a look at the forex trading course offered by Paxforex for free. An even bigger market for scammers is the sale of expert advisors or forex robots. This is a piece of code which will follow a set trading strategy after you install it in your trading platform promising profits on auto pilot. This is a big scam. While these types of products do exist they cost millions of dollars and are heavily guarded at top trading firms. As a retail trader you will never have access to them.
What do you buy? You get a piece of software with a trading strategy which over the long-term will cause you nothing but losses. How can you avoid scams? Education is your first line of defense coupled with common sense. There are no shortcuts in forex trading and before you start earning you need to spend your time learning. An offer which sounds unbelievable and too good to be true often is. Don’t be afraid to ask questions and remember that there is no replacement for learning how to trade yourself. At Paxforex we give you all the tools for free to get you started.