Forex scam or how to avoid becoming a victim?

Quite often, one hears the expression that Forex is a scam or a scam, mostly from the mouths of losing traders who lost their first deposit immediately after starting work.

Let's try to understand the real state of affairs and identify the reasons for failures when trading on the foreign exchange market.

First of all, you need to understand what forex trading is and why some people make millions here, while others lose hundreds of dollars.

The research is based on statistical data from one of the well-known financial publications.

Forex trading involves making a profit on the difference in exchange rates when buying and selling; you buy cheaper and sell more expensive.

The principle itself is quite simple, but there are many nuances that can lead to the loss of one's own funds.

According to statistics, more than half of novice traders lose their deposits on the very first day, due to a lack of knowledge of trading basics and a desire to profit quickly. Exchange rates move in a curve, and a poor entry into the market almost always results in losses.

of leverage also plays a detrimental role , which, it would seem, should only increase profits; indeed, it does increase profits, but it proportionally increases the losses incurred.

It's the lack of experience and high leverage that are the main reasons for losing money, not the machinations of brokerage companies looking to take your money and deceive gullible investors in the Forex market. This fact is easily proven with a simple example.

When trading with just a few hundred dollars, you pay a spread to your broker for opening trades. Sometimes, this daily commission can exceed the amount of the deposit in the trader's account.

So why deceive a client and take their deposit if successful trading can bring the company several times more profit than the client's account balance? The longer a trader trades, the greater the broker's profit.

It's no wonder that most brokers spend part of their profits on market analysis and publishing various forecasts.

But there is still a fact of fraud in Forex

As with any business, Forex trading is not without its share of deception. It is not completely immune to scammers who deceive their clients and turn trading into a scam.

Common types of forex scams or situations perceived as scams:

• Fraudulent brokers prevent their clients from earning money and prevent them from withdrawing funds. These companies often impose additional conditions that prevent clients from withdrawing their funds.
• Technical glitches - any software can glitch, but only in the case of forex can you lose money because of it.
• Gaps are price breaks that prevent stop-loss orders from being triggered in a timely manner.
• Spreads widen due to low liquidity in the market.
• Manipulation of currency pair quotes.
• Account blocking - due to the use of prohibited strategies ; not all brokers allow scalping or expert advisors.

It should be acknowledged that some companies deliberately take actions that lead to the draining of a client's deposit, but in most cases, brokers warn about the danger of widening spreads or the occurrence of gaps.

In conclusion, I would like to emphasize once again that currency trading is not a scam and has nothing to do with gambling; all responsibility for your transactions lies solely with you.

Success can only be achieved if you have a thorough understanding of fundamental and technical analysis of the forex market and considerable practical experience. Any quick profit is always associated with high risk; the more profitable your strategy, the higher the risk of losing your invested capital.

Therefore, when starting to trade, don't expect quick results. Otherwise, you'll only be disappointed, and you'll be telling everyone you know that Forex is a scam and that you simply can't make money on it.