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How To Avoid Some Common Forex Scams

By Gregg Hall

There is an old saying that states, "A Fool and his Money are Easily Parted". With the proper strategy and resources from which to educate yourself, there is no reason to be foolish. With all of the opportunities to make money from home there are plenty of people who can't wait to get right in and get started. The problem is, there are also plenty of scam artists out there who are all too willing to rip you off if you give them half a chance. In the Forex industry, experienced traders don't fall for the scams, but people who are new to the industry are ripe targets. Therefore, you need to know what to look out for. There is an old saying that states, "A Fool and his Money are Easily Parted". With the proper strategy and resources from which to educate yourself, there is no reason to be foolish. With all of the opportunities to make money from home there are plenty of people who can't wait to get right in and get started. The problem is, there are also plenty of scam artists out there who are all too willing to rip you off if you give them half a chance. In the Forex industry, experienced traders don't fall for the scams, but people who are new to the industry are ripe targets. Therefore, you need to know what to look out for.

The government agency that regulates Forex trading, as well as other futures and commodities markets, cautions newcomers to watch out for the scammers that try to paint unrealistic pictures of huge profit potential in Forex and other trading markets. Recently they have also put out numerous fraud alerts for consumers specifically about scams involving the foreign currency exchange market. Here are a few of the tips from the CFTC to give you some insight on how to avoid scams.

First off, you always need to be wary of people who promise huge returns at low or no risk. If you see ads that say things like, "Make $2500 in minutes" that is a pretty good sign that they are not a reputable company. A reputable company will always temper the allure of large profits with warnings that you can also lose just as big or bigger. The Forex market is not a cash cow; there are risks just as there is with any investment opportunity. People who are unaware of the risks involved usually quit trading when they begin losing money.

You were equipped at birth with the ability to question and reason. Use it and be suspicious of everything until you verify that a company is reputable. Use the CFTC and investigate the company or broker you are thinking of doing business with by checking their fraud alert pages. Another good thing to do is see if the company is registered with the CFTC or if they belong to the National Futures Association. By using these resources you can easily find out if there have ever been disciplinary actions taken against the company you are investigating. You can also verify addresses and phone numbers. With the ease of access on the Internet, it has become increasingly easy to run fraud scams with false credentials and fake names.

Just think about how easy it is to have an online presence now. A Domain name is less than ten bucks and you can get web hosting for less than $10 a month. That is a pretty cheap investment for the opportunity to reach millions of people and part them and their money. Be sure to take the time to investigate and verify the people you are considering with the agencies I mentioned above before you give them any private information or credit card numbers. Forex trading can be a wonderful experience and business. Just make sure you work with a reputable company and do your homework.

Gregg Hall is an author living in Navarre Beach, Florida. Find more about this as well as online Forex trading at www.FXTradingStrategies.com

Additional Info On Forex Today

foreign exchange rate

I guess if you are a daytrader, 30 minute and 15 minute candle charts and line charts in combination with MACD and MA could be more useful than hourly charts or even daily charts. Especially watch out for the down-sign and up-sign with long tails in candle charts and confirmation of the change of short-term trend in line charts breaking accumulation area in these charts. If you are a nimble trader, even a candle-sign is enough to start moving in with stops above or below the long tail end. For dollar/yen trade, read swiss/yen, pound/yen and euro/yen together to confirm the top or bottom. For Eurodollar or dollar/swiss trade, read pound/swiss and euro/pound together to confirm the same. If you are a daytrader, what matters is the flow of that particular day, not the bull or bear bias, so, 30 Min and 15 Min Candle Charts and Line charts are not bad tools to follow these flows. Good trades.

online forex

Why should you worry about the price of oil if you're not buying and selling oil? If you're trading currencies, there's one very good reason. Many of the most important currency trading pairs rise and fall on the price of a barrel of oil. The price of oil has been a leading indicator of the world economy for decades, and experts predict that that won't be changing any time soon. The connection between the price of oil and the economy of many countries is based on a couple of simple facts:
- Countries with healthy supplies of crude oil benefit economy-wise from higher oil prices
- Countries who depend on imports for their energy needs benefit from lower oil prices and lose when oil prices rise
- When the economy of a country is strong, its currency is also strong in the forex market
- When the economy in a country takes a downturn, its currency loses value in the currency exchange rate.
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foreign exchange rates

Forex currency trading is the simultaneous buying of one currency and selling of another.

More Easy Forex Information

European Mid Morning Update 18th April 2008

Fri, 18 Apr 2008 04:06:02 -0400
Market struggles to find data to trade from today

Releases from Europe:

March Forecast Actual
German Producer Prices (MoM) +0.5% +0.7%
German Producer Prices (YoY) +4.0% +4.2%

There has been a sudden absence of central bank officials commenting that the slowdown will naturally cause inflation to moderate. No doubt they will continue refrain following this week’s CPI figures and also today’s German PPI data which clearly demonstrated yet again that high oil prices are causing an abnormally large impact as more biochemical fuel crops are grown.

This doesn’t seem like an issue that is going to disappear soon either and with OPEC seemingly delighted with their windfall through crude oil prices being higher by 75% over the past year. They may argue that it is down to a lower Dollar but there is still a substantial differential between the rise in oil prices and the Dollar’s losses.

The more this continues the greater the impact on consumer spending which could be the deciding factor between a shorter slowdown and a longer, more sustained slowdown or perhaps recession.

A small snippet from the IMF’s Strauss-Kahn during an interview in which he forecast several quarters of negative growth from the States but which should bottom out by the end of this year or slightly into next. From then he anticipates a return to “more or less” swift growth.

Well, as things stand now, that would appear to be a generally held view. However, there are lots of things that can happen in the meantime to upset the apple cart. Next year I have Dollar cycles turning bearish again – which may imply that something else will raise its head to cause problems…

The following economic releases are due today:

February
Italian Industrial Orders (MoM) - 0.5%
Italian Industrial Orders (YoY) +5.2%
Italian Industrial Sales (MoM) - 1.0%
Italian Industrial Sales (YoY)

March
U.K. PSNCR GBP 18.0bn
U.K. PSNB GBP 7.8bn
U.K. M4 Money Supply (MoM) +0.5%
U.K. M4 Money Supply (YoY) 11.6%
U.K. M4 Sterling Lending GBP 15.0bn

Asian traders looked at the data releases due out today and promptly decided they may as well close their books for the week.

If there is anything really on the slate to note it will be Citibank’s Q1 results. Forecasts center on a figure around $ -5.0bn. Coming after Merrill’s announced a loss of just $1.96bn which was much better than had been feared there are a number of analysts who view better results as a tentative sign that the worst of the credit crisis is over. Merrill’s also announced that they will be slashing 4,000 jobs worldwide to contain costs.

Citibank has been talking the same book though the CEO has said that some savings will come from other areas rather than job cuts. In total Citibank are planning to slash 20% costs. Analysts have been bandying around a figure of 25,000 jobs to be cut.

The other gossip in the market has been the reaction to Juncker’s comments. Some say that it highlights a sterner attitude to the market. However, while the comments suggest he is exceptionally naive to think that the market should bow and follow G7 statements the basic issue is that he has no control over the ECB and it is only the ECB that can decide whether to intervene in the market.

Thus unless Trichet thinks the same his comments are his opinions only and will have no impact on trades placed.

Having said that the resilience of the Dollar against the Swiss Franc and Japanese Yen suggests that the Dollar bearish sentiment is waning anyway and while a new Euro high is probable it probably won’t last for too long.

Note important support and resistance areas:

USDJPY EURUSD USDCHF GBPUSD
Res: 103.93-04 1.6042-65 1.0171-17 2.0050-92
Res: 102.71-04 1.5950-82 1.0127-41 1.9994-22

Spt: 101.85-15 1.5850-70 1.0023-37 1.9880-20
Spt: 100.81-30 1.5775-02 0.9939-78 1.9816-40