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Is Forex Trading a SCAM??

 

Who is making money trading Forex?

Is Forex Trading a Scam?

 

 

Yes, I know why you might be thinking that. You see some “guru” saying you can make millions overnight, and it looks too good to be true. Right? Well, it probably is too good to be true. Anyway, you bite the bullet, so you decide to pull the trigger and open a live account, buy the system or whatever, you deposit let’s say $2,000 expecting to double your money in a few days, however, somehow in only a few months, weeks or even days. far from doubling your money you actually lose everything.

You now wonder why. You are surprised and frustrated since you closely followed what the “guru” told you to do to make money: When X indicator “blue line” crosses the Y line then you “go long”, or whatever crap. So what is happening?

The market, your broker, or someone seem to be pulling the strings to avoid you to actually gain that massive fortune you were promised.

So, what is really happening? Is it all a scam?

Well, by now you might be wondering if my opinion has any value, seeing that I have a Forex blog. I might be one of those “gurus” trying to get you into some kind of “new” and “incredible” system to make you rich overnight. But you know what? Apart from my $2.99 book right now I don’t sell anything, I might build a trading course soon, but as of this writing I don’t have any need to trick you and make you think Forex trading is not a scam, if it was in fact a scam.

I can tell you the following with 100% certainty: Forex trading is Simple, but not easy. I could teach you the basic information you need to know to start trading in a few days, even if you are a complete beginner. But, even if I told you my exact Forex trading system, most likely it wouldn’t be enough for you to trade profitably.

So why is that? Are we traders geniuses or something? Do you need a super high IQ to become a profitable Forex trader? Do we have a secret we don’t want to share with anyone? I asked myself those questions many times. Especially when my account was going down by the tens of thousands.

What was I doing wrong?

So, I repeat the question one more time: is Forex trading a scam?

I will proceed to answer that first, and the answer is deceptively simple: No, 100% positive that Forex Trading it’s not a scam.

Why? Because entire countries, big corporations and just regular people are using the Forex markets for many different reasons, not only trading. And it works for whatever need all those entities have. There are also banks, hedge funds and even private traders that make money out of it, me among those. Just follow my Instagram account, I post regularly many of the trades I make.

But hey, then what’s the secret? Why is not everyone making millions by flipping the EUR/USD?

Well, the answer is, again, deceptively simple: because they don’t want to.

Or, better said, because they don’t know they can. In our society we tend to view money as mean of interchange and value. Let’s say: if you make a poor job you get rewarded poorly, a bad lawyer or a bad doctor, or a bad plumber might not get a very good salary from their service. However, a bad trader could make millions. Conversely a good trader could lose millions. Yes, and why is that? Because trading involves a good amount of luck, which doesn’t mean trading is gambling. But we’re playing with probabilities, not certainties. Especially in one single trade.

So, the mind shift to understand that is massive, and is super counter intuitive to mostly anyone. We tend to view trading as any other normal activity we as humans do, if we “work” harder we’ll make money, if we don’t the reward will be less. Well, yes, somehow. But only in the long run. In the short term it doesn’t matter how “good” or “hard” you work, if your trade is wrong you’ll lose money. So being a good trader means sometimes to lose money. The difference is that a good trader knows exactly how much money he or she is going to lose if things go wrong, no emotions behind.

So why does Forex Trading feel sometimes like a scam?

Well, first let me tell you. Forex trading is not a scam, but that doesn’t mean there are no scammers in the Forex trading world. Of course there are, and by the thousands. But that doesn’t mean trading is a scam in itself. If you have your money in a reputable broker, preferably regulated in your country or in any “serious” country. Most likely you will be ok. Again, if you follow a real trading system then again, you should be ok. But the fact that it’s not a scam doesn’t make it an easy way to make money.

And when you try to find a system, then again it’s not the simplest thing. Just enter any Forex related query in the Google search and you will have millions of results. On YouTube you’ll find thousands, if not millions, of videos on the subject. How can you even start to organize that information? As a beginner it can be daunting task to try to start somewhere. Even if you’re not a beginner. You might be wondering if the method you are currently following is good or bad.

If you want to read my book “The Black Book of Forex Trading” it is perfect for beginners or intermediate traders

This is one of my favorite trading books ever “Trade Your Way to Financial Freedom” (yes I’ll make a few cents if you buy from my link, but it won’t cost you anything extra)

 

What to do if you are a complete beginner?

If you are super new to trading, or if you have no idea where to start I always recommend to go to babypips and head to the Forex Trading School, the best part is that it is 100% free and the time invested will give you a good foundation on what trading it’s and its core concepts.

t’s not a website that will give you any special trading tactics or secret techniques but will give you a very good overall introduction to trading. You will definitely learn and understand most of the lingo and the basics of chart reading, the difference between technical and fundamental analysis, Fibonacci levels, Moving Averages, price action, etc.

So if any or all of the technical words I just said sound foreign to you definitely take a look at babypips.com and then come back to my blog to find more about profitable trading tactics and how to become profitable trading Forex.

So, here’s a quick cheat sheet to help you determine if whatever activity related to Forex trading is a scam or not:

  • Regarding your broker (not a comprehensive list of bullets but you can start your due diligence here):
    1. Is it regulated in a “serious” country?
    2. Are they also incorporated in that same country?
    3. Have they been in business for a while?
    4. Do they have a history of complains and legal cases against them?
  • Regarding Forex trading systems:
    1. Do they promise to make you rich overnight?
    2. Is it some kind of black box indicator with “secret” elements inside that you can’t see, or they just don’t want to share the secret with you? <– this doesn’t make it necessarily a scam, but it might not give you the independence that you need, and also these methods tend to work for a short amount of time or for specific market conditions, so I’d avoid them.
    3. Do you have any prove that he/she is actually making money with the system– <– Regarding this point: I’ve seen many vendors trying trading bots in hundredths of demo accounts until in one of those accounts makes thousands of percent return on the initial amount. So, they publish that result as a typical trading case. I’ve seen that on systems sold on Ebay. But it’s not real. It’s just one case where luck played a big part and they made a huge return on a demo account. So, again, don’t trust oversized gains.
    4. Do they feel more like marketers than traders? <– This is more of a gut feeling, but I believe it’s clear enough when you find one in front of you.

Again, this is in no a comprehensive or extensive list of tasks to do for you to follow a true due diligence. However, I can tell you that now, at least you know 100% that Forex trading is not a scam, so you can dedicate your time to find a good broker and a good system for trading and making money.

Remember to, even if your “system” seems so infallible that you can’t wait to start making millions, always start testing. Demo is always the best way. Try it for a few weeks or even for a few months. Then deposit a small amount, just something to make it feel “real”, and see if you can really make some money, then try to withdraw the money you made, see how easy or difficult it actually is.

Are they letting you take out your money easily? Great! then you can maybe deposit a bit more.

Don’t go overboard, see it always as a long-term play or at least medium term.

I have found that many people lose money trading because they just don’t let their system or strategy develop. If you follow all the steps and take it patiently I am sure that anyone can make money trading. It’s definitely not rocket science, however to control our own emotions regarding money is VERY hard, so that’s where you have to work the hardest once you find a good broker and a good method.

By the way I just decided to also make a YouTube video on the blogposts I write. So if you want to watch the YouTube version here it is, it has a bit different information so you might find it valuable. If you like this videos, also let me know in the comments and consider subscribing to my YouTube channel, I have the plan to publish a lot of interesting videos on trading there too.

 

I would love to hear what you think about this subject. Have you been victim of Forex trading scams? Have you ever felt that Forex is actually against you and your trades? Share your stories so we can enrich the community.

Till the next time and great luck in your trading,

Paul.

 

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9 comments on “Is Forex Trading a SCAM??”

  1. Peter Miller Reply

    Thanks Paul, Love your book and thoughts on this subject of “is Forex a scam ” , I have Axitrader as my broker and they are great, never had any problem at all.
    You are right it is not a scam otherwise why would big Banks be trading.
    Sooooo glad to see you online again
    Best regards

    • Paul Reply

      Hey Peter, never tried Axitrader, let us know how is your experience with them. Are you trading demo or real?

      • Peter Miller Reply

        Hi Paul, I originally traded Axitrader in Australia because I had a mentor in that country, I believe the head office is there but as I am British there is a counterpart in England so I trade it @ . Co. Uk , I trade for real because demos don’t give me the edge I want. The company have great customer services and MT4 works excellent on my Microsoft tablet. They have really good spreads and cover everything you would want to trade. My trading has improved 100% since reading your book and I only look for trades that you discuss. It is not easy as you say but I have complete confidence in your system, glad to hear from you again, I am now living in Florida and enjoying life , merry Christmas

        • Paul Reply

          I will definitely take a look at them. I am glad to hear you are no longer on the “demo” stage. I believe many traders just skip it and go directly to risk their money and lose it, that’s why I insist so much on demo. But I, myself, don’t trade demo anymore for several years. I only use it to try new strategies or brokers.
          Enjoy the weather in Florida, I am right now in Playa del Carmen, Mexico, so also very nice Caribbean weather here.
          Merry Christmas.

          • Peter Miller

            Thanks for your reply, enjoy Mexico, I have spent time in Puerto Vallarta , very nice . Merry Christmas

  2. Mike Reply

    HI there. I have wasted literately tens of thousands on bad trades. Plus 500 for me was the worst especially how it is impossible to lower the leverage. Etoro was slightly better but in the end my losses always exceed my wins; in the end I deleted the apps and gave up.

    • Paul Reply

      Hey Mike,
      I am so sorry to hear that. However I believe from your comment that you haven’t understand 100% how leverage works. Let’s say that the brokers allows 100x leverage and you have 1,000 in your account, that would give you the POSSIBILITY, but not the obligation to trade positions up to 100,000 but that doesn’t mean you have to enter positions of that size. You could simply enter a 2,000 position and use 2x leverage, or any other number that makes sense in your trading strategy.
      The second recommendation I’d give you is to not give up, but don’t trade real money please! use demo, see it as a long term activity, don’t expect to make money right now. Trade demo until you start making money.
      Wish you the best in your trading.

  3. Rene Reply

    Hi Paul,

    Bought and read your book already some time ago. It really helped me a lot to find my own path in trading. Sometimes i felt to look into a mirror.
    I lost a bit, first fast, but not much, slowed down in losing and now i started slowly to win and this now already for several months at the weekly chart.
    Coming year i will begin first time to invest some bigger amount of money. (sure only what i can afford to lose and my wife will not recognize 🙂 )

    wanna say thanks for your book and videos!
    Have a happy and successful year.

    Rene

    • Paul Reply

      Hey Rene,
      Very happy to hear the book and videos are working for you. After much struggle I found that a simple and clear approach was much more helpful than the fancy complicated stuff. Specially if you lost a lot of money, like in my case when I started.

      I am glad you are ready to move to the next face, I’d recommend you enter slowly your bigger amount into the market and you go testing the waters and gaining confidence with bigger sums of money.

      Happy new year for you and your family,

      Paul

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