How to Avoid the Scams in Online Forex Trading

By Content-mgr - on September 19, 2016

Online forex trading can be carried out in very safe ways. But as with all things in life, some scammers get involved and sell all kinds of snake oil nonsense.

Online Forex Trading is Honestly Presented Only through Full Risk Disclosure

Snake oil salesmen use all kinds of tricks and techniques, based on false consumer expectations. This is why misleading marketing works, for the most part. Scammers are involved in all kinds of businesses. Anything from the fine art market to real estate. And even car mechanics and doctors can sometimes be dishonest, so as to charge you the maximum amount of money possible. Luckily, in online forex trading, there are many seasoned traders capable of judging. And of impartially rating any forex product or service. Just by getting in online forex forums and getting into discussions with such traders, the truth is revealed in no time. Savvy traders are very hard to fool, that’s why their advice is priceless. Even in the far superior CFD trading forex liquidity pool, which is much better than anything else out there. Traders tend to mistrust the markets. Not that the markets are wrong. The markets are right and honest. But by their very nature, market moves can be deceptive to naive traders. Savvy traders trust reputable CFD brokers like they trust their wallets and bank accounts. But the markets themselves and the information going around, can all lead to the wrong trade. So suspicion on market moves and stories told in the media is always there. It’s the nature of traders to be suspicious. Especially when a market trend looks very convenient to follow. Savvy traders handle trades with extreme caution.

Robots and Automation Cannot Master Online Forex Trading

Robots are the biggest scam in online forex trading today. Because they are being sold under false or poor back-testing data. Moreover the buyers of these forex robots fail to realize that all forex robots fail miserably after a matter of several weeks of trading. And no such trading can really beat the market. And even if a commercially available forex robot is ever this good. The very act of making it commercially available would lead to the profit margins evaporating. Hence the trading edge would be lost very soon. All sales tactics that the vendors of these products use, are based on consumer psychology. And consumers do make unwise decisions all the time. But committed forex traders are not typical consumers. They are by nature becoming more and more street-wise and suspicious as they learn more about trading. Only manual, risk-embracing forex strategies can lead to long term profitability. And the street-wise traders know this very well.

Online Forex Trading
Binary options are regulated and meet all legal requirments (so are casinos and slot machines!). They have however nothing to do with classic commodity and stock options! They are extremely difficult to use profitably, because the trader has to be sharply right on market direction and the timing. Moreover, there seem to be hidden unfair asymmetries in the way that a binary option trade gains and loses in value. They are a very easy trap to fall into, but despite all the regulation, all savvy veteran traders advice staying away from the binary options market! And to use instead DMA, ECN, or CFD forex brokers, where pricing is linear and you as a trader get to win or lose the exact market price move you trade. Especially CFDs offer this linearity very safely, even to small retail traders, and for many years now.  Binary options come with a great deal of misleading marketing, due to their exponential factors in their pricing. That’s why veteran forex traders advise against using them. But you can actually confirm all this in actual online forums, with real, savvy, large size traders.

Avoiding Scams and Gambling-Like Market Products

Apart from forex robots, traders are strongly advised not to buy training courses that lack sufficient ratings. And not to invest in 3rd party forex funds. Traders are much better off trading their own funds, through their own retail size CFD forex accounts. Or through DMA accounts if they are very large size traders. Trusting investment money to 3rd parties is very risky, because there is no way of validating their motives and accuracy of information, certainly never 100%. A forex fund may have faked trading history. Or even real trading history which is no longer relevant, as the strategy may have started to falter. Anything that fails to disclose risks to the full, or makes unrealistic claims, is likely to be a scam. Or even possibly a case of honest but delusional trader having unrealistic faith in themselves. Another big scam, for the most part at least, are binary options. Binary options are not well understoof by traders. And even though they are not a scam by legal definition (neither are casinos and slot machines).There’s a lot of misrepresentation, which ultimately makes them equivalent to a scam.

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