Six (6) Pitfalls That Will Make You Fall to Scams and Seven (7) Ways of Avoiding Them

The Forex market is volatile and carries substantial risks. It is not the place to put any money that you cannot afford to lose, such as retirement funds, as you can lose most or all it very quickly. The CFTC has witnessed a sharp rise in Forex trading scams in recent years and wants to advise you on how to identify potential fraud. - http://www.cftc.gov/ConsumerProtection/FraudAwarenessPrevention/CFTCFraudAdvisories/fraudadv_forex

Scammers and scam victims are like the animal planet scenario - (Predator and Preys). The preys are most times new born, defenseless, attractive, naive, weak, gullible, and adventurous, while the predators are fast, well armed, crafty, aged, and nocturnal in nature. The predators preferred mode of attack is ambush and lure traps. 

Some animals are sensitive to the presence of predators, and their likely attack setups. The herds or flocks guide their young for a specified period of time until they are old and strong enough to sustain themselves in the wild.

The Forex Market is one of the most dangerous Financial Wild Reserve Park amongst other Financial Investments. The predators here are constantly developing intelligent schemes to rip off unsuspecting clients daily. The methods being used today by scammers are dynamic and much more alluring when compared to schemes used in previous years.

See: Scam cases filed in ForexPeaceArmy Trader's Court

Extensive research on scam patterns revealed some common tricks scammers deploy to catch their victims, and also pitfalls most victims of scam are prone to.

The Six (6) Pitfalls that can make you fall to Scam:  

1'st Pitfall
Lack of in-depth knowledge of Forex Trading in regards
      to:
       a. How it operates 

       b. Mechanisms behind Forex Systems (EAs, Indicators,
           & other tools)

       c. Risks and rewards involved.

2nd Pitfall

Not conducting thorough investigation of a Forex product before buying it is a dangerous pitfall. It is strongly recommended that you effectively investigate the actual claims or functions of a Forex product before committing your money. There are websites like www.forexpeacearmy.com which conducts Forex product testing, and user review ratings. You can also try out our FX-Probe (Investigator) Services.

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3rd Pitfall

Accepting offers from unverified emails, unsolicited emails, and spam mails is a sure way of falling victim to scam deals.

4th Pitfall

Impatience, greed and excessive desire to get rich quick without hard work. 

5th Pitfall

Asking the wrong questions about a product from the vendor can make you fall for cheap scam deals. Also getting wrong or deceitful answers from the vendor despite asking the right questions can make you fall to scam deals.

See: The 10 right questions to ask your Broker

6th Pitfall 

Purchasing Forex products through unsafe or less reliable financial medium on the internet. Not all “30 day refund policy or 100% guarantee” are trustworthy especially when the vendor utilizes payment options, which do not offer customer security or refund policies. Unverified or poor security payment options are scammers choice for trapping their victims.  

     See: http://www.forexverified.com/refundpolicies.html

These are the common pitfalls that can make you fall to scam deals. The most vulnerable pitfalls are most times not caused by the scammers but by yourself because the final decision or choice is taken by you.

In the game of football it is often said that the best form of defense is attack. In Forex the best form of defense against scammers is avoiding them. 

There are numerous ways to defend yourself from Forex Scams but not all the methods are efficient enough. Find out the Seven (7) efficient methods of avoiding scam deals based on my research on scammers cleverly concealed tricks and traps.

 

Click here to find out more....

SEVEN (7) WAYS TO AVOID GETTING SCAMMED

1. Constantly update your knowledge about Forex. Devote time to research, and study of the financial market. The more facts and tips you acquire about Forex the lesser you can be deceived.  



2. Always inquire about a product from popular, and reputable Forex forums before purchasing it. See samples of inquires below:
   
   
   • Has anyone used this product before and how long? 
   
   
   • What was your experience on the performance of the product in a demo or live account?  
   
   
   • What do you know about the developers or vendors?
   
   
   • Apparently answers to these inquiries are most times stated on the FAQ page of the vendor or developer’s website. However different user reviews outside the vendor’s website are more genuine. I strongly advise you visit at least three user review forums and compare your findings. I recommend www.forexpeacearmy.com as one of the best place to get unbiased reviews about a product. You could also try our FX-Probe (Investigator) Services.
   
   
3. Carryout a personal test of the product with reliable strategy testing tools. Virtually all Forex products
   
   come with back tested results displayed on the vendor’s website or are included in the product’s package. It is recommended that you conduct your own test with optimized settings and turn on the visual mode in the strategy tester to see how the Expert Advisor works visually. To get the best analysis from your test, you’ll need at least 90% quality tick data, and very good strategy testing tools. I recommend using StrategyQuant’s Tick Downloader and EA Analyzer. StrateQuant's EA Analyzer produces more analysis than the conventional strategy tester on MT4 platform. You can get them here for free when you signup. 


4. You need to be patient in Forex. Don’t be in a hurry to become like Warren Buffet in one year. 


5. Do not respond to unsolicited emails from unverified vendors making an offer to buy a product. Most of such emails can be detected by their poor tenses and strange URLs. Do not click on the links in the email but rather type in the address on a new window in case you want to verify or investigate the source. I strongly advise you try out our Fx-Probe (Investigator) Services, which would help to decipher such strange offers. 


6. If you sense something unusual about an offer, then don’t be the first to buy it instead request a demo license. Good products would always remain in the market, so you’ll have enough time to follow it, and see other user reviews before buying it.


7. Be very careful with free trial offers. Most of them have hidden traps, concealed fees, and cunny motives at the end of the trial period.

Let these seven tips be your guide, and you will be free from scams. An old parable says "prevention is better than cure..."

Are you experiencing issues like these....

My broker has refused to honour my withdrawal request for many months despite several emails and calls.......

My account has seriously deteriorated barely three weeks since i opened a managed account. The managed account operator is not giving me any tangible reasons.......

If you think you've been scammed or you want an investigation about your ordeal, file a complaint here: http://www.forexpeacearmy.com/traders_court/

or request our free FX-Probe (Investigator) Service

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About Onyebuchim C. Obike I am an IT specialist in Software Programming, Networking & Telecommunication. My quest for an alternative source of income led me into Forex since 2005. My encounter in Forex over the years made me to develop a site where traders can get reliable and effective Forex Resources & Tools, that would make them successful traders. I prefer combining Technical & Fundamental techniques in trading. Follow me on facebook: www.facebook.com/fxtradecity

10 Secrets of Detecting Scam Deals

The unregulated and highly profitable Forex Market is extremely attractive, not only for us as traders, but also for those who are best defined by the word "SCAM". According to CFTC records, the average individual foreign exchange trading victim loses about $15,000 - http://www.forexpeacearmy.com/

A certain awry deal many years ago led me to the ForexPeaceArmy for assistance. They were very helpful in resolving the issue i had with a Forex Vendor. The ForexPeaceArmy are dedicated folks helping Forex Traders to resolve and recover their funds from scam deals. They have successfully handled lots of scam cases.

There is a high rise of Forex Scam deals as evident in the warnings stated by the CFTC, and other Forex Regulatory Agencies. Most of these deals go unnoticed with huge losses, which are most times unrecoverable.

This article reveals the 10 Secrets of Detecting Scam Deals and other related tips from CFTC's Fraud Advisories.

1. Take note of get rich quick slogans especially with EAs & Trading Strategies. For example “This bot generates over 1000% returns in few months with zero drawdown…..”. This is a killer scam because there’s yet to be any EA to my knowledge without a single drawdown. Drawdowns are inevitable in Forex. Therefore an ideal system should have lesser drawdown to profit ratio on the long run. 


2. Watch out for similar or look alike brand names, and functionality dubbing a popular EA or Forex Product on the market. Some EAs are faked by impersonating the real EA’s functions. They often come with very looks on their package with cheaper prices to attract buyers.


3. Poorly designed website with no locatable address or phone number. This can be very easy to detect especially for some websites that upload picture files of the results of backtested EA's which looks choppy and blurry in appearance. You’ll find little technical information of the product but lots of positive graphs and bogus figures inserted in thumbnail sized pictures. Be careful when you come across offers emanating from places like this.


4. Awkward positive reviews on the website of the vendor’s Forex Product. Watch out for unusual similar statement patterns, and location of the users posting reviews.
 
5. No proof of segregated accounts for fund managers scheme or PAMM. Although a verified proof is still not enough to assure you of the integrity of the operator, hence it is safer to investigate the personality of the operator. (see our FX-Probe (Investigator) services) 


6. Look out for unclear refund policy statement. If the refund policy is stated in the advert of the product on
   
   the vendor’s webpage, but not stated in the agreement document or any legal binding document then you are likely walking into a dangerous deal. Also watch out for Refund Policies not tied to internationally recognized financial payment options. 


7. When the vendor cannot give right answer to questions like the ones below then be careful.
   • Can I get a refund if your conditions or performance are not met?
   • I have heard issues from customers and user reviews about poor performance or product failure sometime ago. Is this true? Has it been handled? If yes how was it handled? 
     
   • Can I get an investor access to your live account, and watch it trade live for some months?
   • Why is your regulatory certificate still pending?
   • Can you please clarify if there is a relation with your company name, or registered name, or partner's name, or subsidiary's to a closed down or an existing case with a Regulatory Agency? 
     
    
8. Unsolicited or spam emails flooding from a particluar vendor requesting you to buy his product. The emails are most times poorly written with encrypted and shortened URLs. Most times the cost of the product is drastically reduced as a bait to lure you to consider buying it.


9. Watch out for statements emanating especially from emails saying “we are the authorized sellers or representative of the winner of the MQL4 or MQL5 Championship Competition EA, and we are offering few copies of this EA at a discount price of……”. Usually at the end of most MQL competitions, there is a surge of fake offers to sell the 1^st position EA or something close to it. Most offers are dubious. Always verify directly from the host's website.


10. When the vendor absolutely or continuously breach the conditions of service or the product performs absolutely terrible against the claims on the adverts or performance results on the website in a normal trading condition. This is red alert of a probable scam deal.

Applying these secrets would not only help you detect, and avoid scam deals, but would also help to drive scammers out of the Forex Market. A faster way of getting this done is sharing information like this to other traders.

Other related tips: CFTC's Fraud Advisory Guide -   

                              Beware of Currency Trading Fraud

                              Fraud Awareness and Prevention      

In the third chapter of Forex Scams, we would reveal our 6/7 code - Six (6) pitfalls that will make you fall to Scams/Seven (7) ways of avoiding them.

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Forex Trading Basics

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The foreign exchange, or forex, market is relatively young, having begun in the early 1970s after the United States dropped the gold standard and national currencies started to fluctuate widely.

For about 30 years prior to that, most nations had agreed to keep their currency values stable in relation to the U.S. dollar, making a forex market unnecessary.

With that no longer the case, banks quickly realized that a profit could be made in “buying” currency when it was devalued and “selling” it after it strengthened, just like any other commodity.

Today, the forex market handles about $1.9 trillion in transactions every day, and it runs 24 hours a day, five days a week. (With nations around the world involved, it’s always daytime somewhere.)

The most traded currencies are the U.S. dollar, the euro, Japanese yen, British pound, Swiss franc and Australian dollar.

The forex market is overwhelmingly dominated by international banks, government banks, investment banks, corporations, and hedge funds. In fact, individual traders account for only about 2 percent of the market.

Nonetheless, a lot of people do try their hand at it, with varying degrees of success.

In the forex market, transactions are always handled in pairs: You buy one currency and sell another one.

The idea is to make a trade when you believe the currency you’re buying is going to go up in value compared to the one you’re selling.

Then, if it turns out your prediction was correct, you do another trade in the reverse direction -- selling the currency you originally bought and buying the one you sold -- in order to reap the profits.

For example, let’s say the market reports this: GBP/EUR 1.2200.

That means the cost of buying one British pound is 1.22 euros.

If you believed that course was going to change, and the euro was going to become more valuable than the pound, you might sell 100,000 pounds, buy 100,000 euros, and wait.

Then let’s say a few weeks later, the exchange rate fluctuates to this: EUR/GBP 1.3100.

Sure enough, the euro is now worth 1.31 pounds, a profit of 0.11 per unit.

The forex market is vast and daunting and mostly inhabited by giant organizations.

But it can be navigated by individuals who have studied the finer points and who want to take a risk on something potential profitable.

And since the whole world uses money, the trading of that money is always going to be a major force in the financial world.

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Is It Suitable For You To Trade Forex?

Being a forex trader: Is it for you?

Being a forex trader is not for the faint of heart.

The foreign exchange market is a fast-paced world that operates 24 hours a day, 5 and a half days a week.

For some traders, fortunes are made and lost very quickly.

Yet for someone with the right know-how and enough motivation and drive, forex trading can be rewarding both personally and financially.

How many people make their living as forex traders?

It’s hard to say for sure, but we know the number is smaller than the number of stock traders.

Most forex traders are actually international banks and other huge corporations; private citizens comprise only about 2 percent of the entire forex market.

Nonetheless, they are out there, and the number is growing.

As the Internet and other technological advancements make it more accessible, the forex market becomes more manageable and more average citizens become traders.

To begin with, most of these “day traders” keep their regular jobs and do forex as a side project.

It’s notoriously difficult to make a living as a forex trader at the start, and most new investors find they must allow for the learning curve before they’re really ready to do it full-time.

Once a new trader gets the hang of it, buying and selling currencies with some degree of confidence and turning a profit, he may find that he can quit his day job and focus on trading full-time.

There is certainly enough activity to fill a forex trader’s day, with news that could affect currency rates coming in almost constantly.

A smart trader watches this information continually, almost obsessively, always on the watch for a sign that the time is right to buy or sell.

With home computers and high-speed Internet service available nearly everywhere, being a trader from home has become feasible.

Some traders eventually become brokers, but the excitement -- and the potential profit -- lies in working for yourself.

With a stock market, a bad day could mean disaster.

But with the forex market, a bad day for one nation’s economy hardly matters, since there are still a dozen more strong, viable currencies to be traded. In that way, some consider being a forex trader slightly more stable than being a stock broker.

Either way, there is always risk when money and speculation are involved, but with dedication and resourcefulness, you can make a handsome living as a forex trader.

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Take Part In Forex Contests!

If you want to know how good your trading is, you can always take part in Forex contest help by various websites.

Recently, i took part in a forex contest organized by FX Pro.

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It only take a few minutes to register and every contest will have different time lenght.

Some would last 2 weeks while some goes on for a month.

For example, the one that I am in now goes on for the whole month of May 2013.

So, where can you find these contests?

You can find them in MyFxBook.com

Sign up with an account and you will be able to link MyFxBook to your trading account to see how your trading is fairing up.


At the time of this post, my position is at 304 out of 4234 competitors.

My account is up by 57.65%.
It is a long way behind the top guy who has registered a 7982.6% gain in just over week.

These high flyers are mostly trading Gold and Silver.

I checked them out of course :)

So why enter Forex Contents?

There is a prize money!

For this one, the winner will get $3000 funded into a FX Pro account.
So, to get the money, you need to register as a FX Pro user. Of course, you can trade with the money or withdraw it out after 1 day.

Pretty good huh... You can practice and win money at the same time.

The 2nd place will get a $2000 account and 3rd will win a $1000 account.

So, if you come across any forex contest out there, you can simply join the contest to see how well you perform againts traders from all over the world.

So, wish me luck.

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Your Forex Trading Strategy Is Everything

A good forex trading strategy can mean the difference between failure and success.

No sane person would jump into the forex market blindly.

You might as well set your money on fire if that’s what you’re going to do.

Sensible investors study the market carefully first, learn the ins and outs of currency trading -- and even then, before they launch into it, they devise a smart forex trading strategy.

The market is constantly changing and is not always predictable, true.

But you still need a strategy, one that allows for unknowns and surprises.

Your strategy should begin with how much money you can afford to lose.

That may sound like a negative outlook -- after all, the goal is to MAKE money, not lose it -- but common sense tells you that the forex market is a gamble.

There are precautions you can take that will make you less likely to lose your initial investment, but there’s no way to guarantee it.

Your strategy must allow for the possibility that you’ll take a bath, and for that reason you should never invest more than you can afford to lose.

Another good tip for your trading strategy is to avoid putting all your investments in one currency.

What’s the old saying about eggs and baskets? Yeah, don’t put ‘em all in one.

Spreading them out makes it much, much less likely that you’ll be wiped out, the way you would if you relied on one currency and it bottomed out.

As you prepare your trading strategy, make yourself aware of what the market is doing right now.

Is it trending upward, or downward? What’s the general mood among traders? They all have a strategy, too, and are eager to know what others are thinking.

Consider also what your timeline is.

How long do you want to stay in the market before taking your profits and getting out?

Your strategy must also involve learning the timing of the business.

Timing is everything: Too late or too early and your potential profit evaporates. As you learn to gauge the market and make trades at just the right time, your profits will increase.

A good strategy will factor in this learning curve and allow for a few mistakes at first.

Above all, to prepared to accept surprises when it comes to forex trading.

Strategy can only get you so far. The rest is ingenuity and a little bit of luck.

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Start your Forex journey with JustFxTrading

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Forex Scams

What is a scam? – 

“Scam is a fraudulent business scheme” or “to deprive off by deceit” – (TheSage’s English Dictionary and Thesaurus)

Scam is synonymous with fraud. It is deception, make belief, trickery, pretense, cheating, e.t.c.

A lot of people have fallen one time or the other to scam deals knowingly and unknowingly. Some got out with partial loss, while others lost everything without a single recovery. Scam victims usually suffer unbearable psychological pains due to the level of trust built with the scammer and the loss incurred. 

Unfortunately any venture with high potential for money making is always alluring to scammers and Forex is one of those ventures. 

Scamming in Forex had been in existence right from when Forex began, only that it has taken a new dynamic dimension in this current era. Forex Scam is the act of fraudulently taking money from a client or customer with the intention of providing a rewarding service for the client or customer, which is not true. In some cases the services promised by the vendor could be rewarding or true but at the long run, a glitch occurs due to either poor design or failure in the service or product, and the vendor promises to make up for the loss and later on disappears after months of negotiations without any refunds. 

Examples of Forex scams include ponzi schemes, which is more prevalent in Forex Managed Account Schemes like PAMM, Pooled Asset Manager Scheme, and Pyramid Schemes. 

WRONG PERCEPTION OF FOREX SCAM

Let’s get this right, not all scam complaints are actually scams. A case scenario might look similar when it’s being matched with real scam cases. But when you look deeply into such complaints, you’ll find wrong perceptions and false alarms. 

A lot of inexperienced Forex Traders are quick to scream “I’ve been scammed” due to their level of knowledge in Forex. If you fail to follow the instructions of a product, and experience losses then that’s not a scam. For example when a signal service provider says “use default settings for accounts lower than $1000, and do not adjust the Money Management Settings otherwise you will get undesired results. However you’ll make little pips but on the long run your account will grow steadily”. Then if an inexperienced trader gets impatient or greedy, and ignores the warning by tweaking the settings in order to attain short term quick gain in his account, such a trader would unfortunately experiences an undesired loss to his/her account. 

Then let's assume the trader gets infuriated and sends series of complaints to the vendor about poor performances of the product and later request for a refund. When the vendor refuses based on the trader’s negligence, then a scam alarm is raised. Unfortunately this does not qualify for a scam case.

See: Samples of scam cases handled by ForexPeaceArmy

Every forex product has its threshold or required standards because they cannot be 100% perfect at all times. And usually most vendors state this caution or disclaimer notice on their website in order to protect users from unprecedented loss from market uncertainties. So it is the duty of a customer to keep to the product’s limits. When you go against it and face the undesirable consequences then asking for refunds would not work, and establishing a scam case would be extremely difficult.

When a trader uses a Forex product not designed for news trading or for a particular trading session or configures the settings against the design of the Forex Product and gets losses then the trader cannot claim he/she has been scammed. 

I’ve been scammed where can I get help?

See: File a scam complaint and get help; or
        Use our FXProbe (investigator) Services for guide on 
        handling a scam case.

To be continued....

In our next chapter of Forex Scams, we would reveal the Ten (10) Secrets of Detecting Scam Deals

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Protect yourself!!! 
Knowing the true performance facts of that Forex Robot or Strategy could save you from getting scammed. This tool would help you dig deeper and reveal facts you never knew.

Get this FREE tool when you Signup with us.

When you trade with real money, you need as much information about your strategy as possible.
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About Onyebuchim C. Obike I am an IT specialist in Software Programming, Networking & Telecommunication. My quest for an alternative source of income led me into Forex since 2005. My encounter in Forex over the years made me to develop a site where traders can get reliable and effective Forex Resources & Tools, that would make them successful traders. I prefer combining Technical & Fundamental techniques in trading. Follow me on facebook: www.facebook.com/fxtradecity

Forex Demo: Always Trade Demo Account Before Trading Live Acount

Before airplane pilots actually fly on their own, they usually practice in simulators that re-create what flying will be like without any actual risk.

Since currency trading is as dangerous financially as flying is physically, it makes sense that there would be a forex demo available, too.

A forex demo is a smart way for a new investor to start.

Reading books and taking online courses can teach you the basics, but the best way to learn anything is to get some hands-on experience.

However, with forex, hands-on experience could mean losing your shirt.

So a demo gives you real-world training with no actual money being involved.

Usually, the demonstration comes courtesy of a brokerage or other financial Web site that has an interest in currying your favor.

The plan is that once you’ve tested your skills in the demo, you’ll get into the real thing and take advantage of the paid services the demo provider has to offer -- forex signals, managed accounts, automated trading, etc.

The demo is like a free sample, offered in the hopes that you’ll enjoy it so much that you buy something, too.

For that reason, be should be highly suspicious of any

Web site that wants to charge for a demo.

Considering there are literally dozens of sites that offer free demonstrations, there is absolutely no reason that you should pay for it.

When you sign up for a forex demo, you’re given a username and password and shown how to use the demo system.

Sometimes it involves downloading a piece of software unique to the company; other times it’s simply done over the Internet.
(Some demos require Macromedia Flash, which most browsers have installed, but which you’ll need the latest version of.)

You determine how much imaginary money you want to start with, and off you go!

Once you’re signed in to the forex demo, you do all the things you would do if it were a real-world situation: reading the charts, following the trends, visiting online forums to get other traders’ opinions, and making trades.

The trades are recorded in the forex demo only and don’t go anywhere into the actual market since there’s no real money involved.

When the market changes, the program determines how much you’d have gained or lost based on the decisions you made.

You’re able to say, “Whew! Good thing this was only for practice!” or “Too bad this wasn’t real!” And once you’ve gained some expertise using the forex demo, you can move on to the real thing and start making some money for real.

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Happy Trading!!!