subject: Common Forex Trading Scams & How To Avoid Them [print this page] Common Forex Trading Scams & How To Avoid Them
The abundance of Forex trading scams is a cause of concern to many in the Forex community. These fraudulent schemes are not limited to any one area of trading. There are several you should be aware of.
The most common Forex trading scams include Ponzi schemes, mis-management of so-called "managed accounts", promises of massive returns in a short time period with little up-front investment, and selling software programs claiming to make large profits even for traders with no previous trading experience.
Between the years 2001 and 2006 the U.S. Commodities Futures Trading Commission prosecuted 80 cases involving over 23,000 people who had been defrauded of over $350 million.
In 2003 a Forex trading software called the Elliot Wave Analyzer was being sold online. This type of software is better known today as a "Forex robot". The site selling the trading program claimed that the software was "84.9%" accurate and had so-called "statistics" to prove the accuracy.
The software vendor was charged by the CFTC with failing to disclose that the results obtained were purely from hypothetical trading and an injunction was issued in the case against the vendor.
Unfortunately all of these type scams are still prevalent today. Because of the immense interest in the Forex markets and the promise of a quick way to get rich, it's very likely these types of Forex trading scams won't end anytime soon.
Potential Forex traders would be wise to beware of any promise of making large amounts of quick money without any knowledge or training in the Forex market.
Without having any training in the basics of Forex trading no trader should realistically expect to make a fortune, let alone even stay in the markets for any reasonable length of time without substantial losses.
In order to learn to make money in Forex you will have to put forth the effort to study and learn how the markets work and have a solid trading system and plan in place.
So the next time you see an outrageous claim about some trading software or system that can make you rich beyond your wildest dreams, remember to take those claims with a grain of salt.
The author's website features more Forex trading information and a few Forex trading secrets.
