Over the past few years, Forex also known as foreign exchange trading has become incredibly popular. One could say it more popular than the stock market and Forex traders from all walk of life and levels of trading are discovering emails each day promoting get-rich-quick trading robots. The field of Forex can feel like a maze at first, and it is easy to get lost in all the information and misinformation. To help you, here is a quick guide on Forex trading scams.
What is Forex?
Just as its name implies, foreign exchange market, also known as, Forex is the act of trading different currency pairs from around the world. Forex trading system's record about USD $4.0 trillion in transactions each and every day in 2012! In Forex, you trade currency pairs and the goal is to make a profit when currency values increase or decrease with a currency pair. Forex is a lot like gambling with many promoting it as a vehicle to financial freedom. One would think that there is a 50/50 chance your trade will bring you a profit and yet more than 95% of traders lose money.
There are many trading academies offering free beginner trading classes and then trying to get the participants to sign up to expensive courses with claims such as "learn from the professionals to trade like a professional", "learning simple effective systems for trading," " unlimited money-making opportunities," " learn to make $1,000 in a day without risking a dime", etc. If these were true, everyone would not need to go to work. They could stay home making money trading. You know it is a scam when it sounds too good to be true. If the trading instructor is really good, then he should be on his private beach somewhere instead of collecting your hard-earned money for tuition fees.
Once you are through the trading courses, you will need to open up a Forex account to start trading. By going through the forums, there are many posts that claim such xyz broker is the best. Unbeknown to the readers, that particular broker has hired an army of writers to post and promote that they are the best broker. Soon after you start trading with real money, you realize that Forex trading is 1000 times harder compared to how it was originally promoted.
Disgruntled, despaired, and desperation begin to set in. Traders then begin purchasing the latest and greatest trading robots that claim to turn $250 into $5,000. Again, if it sounds too good to be true, then it is probably a scam. With only a one-time payment of $100, traders do not want to miss out the chance to become a millionaire. What traders don't realize that these robots take excessive risk to obtain those gains; hence, the result is not sustainable and not repeatable. If these robots can produce sustainable and repeatable results, the developer would become a billionaire instead of sell the software for less than $100.
Winsor Hoang is the founder and CEO of CTS Forex, a Vancouver-based automated, statistical, risk-managed FX trading system.
Using his statistical and automated system design experience at Nortel Networks, RIM and Sierra Wireless, he began developing automated systematic solutions and, in 2010, after seven years of development, testing and trading his own money, introduced CTS Forex to the market.
Winsor has nearly two decades and more than twenty thousand hours of trading experience. His automated FX trading system continues to produce consistent returns, regardless of market flux. Hoang is a registered professional engineer, and holds a Bachelor of Engineer from the University of Victoria. For more information visit www.ctsforex.com.
Winsor's new book, The Bull, the Bear and the Baboon, is available for purchase at Amazon.com, Barnesandnoble.com, as well as other online booksellers.