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Scam Recovery Consultation 101: Forex EA/Robot Scams

Category: Forex Scam
Length: 9 pages
Reading Time: 15 minutes

Excerpt: textexttext

July 24, 2022

Introduction

Forex is an abbreviation that stands for “foreign exchange.” The foreign exchange market is the venue for the trading of currencies. 

As of 2019, it is the world’s largest and most liquid financial market, with an average daily turnover of $6.6 trillion. It is also the market with the most trading volume. Currency movements are the foundation of the foreign exchange market. Forex traders profit from the spread between the prices at which they purchase and sell currency by betting on the direction in which currency pair prices will move relative to one another. Foreign Exchange, also abbreviated as Forex, is a combination of the words “foreign currency” and “exchange.” 

The process of changing one currency into another for a variety of reasons, most commonly for the sake of commerce, trading, or tourism, is referred to as the foreign exchange. The daily trading volume for FX hit $6.6 trillion in 2019, as stated in a triennial study published by the Bank for International Settlements (a global bank for national central banks). 

Trading currencies may be a complicated and risky business. It is difficult for unscrupulous traders to manipulate the price of a currency within the system because the volume of trading that occurs within the system is so high. Investors that have access to interbank dealing are aided by this mechanism in their efforts to increase the market’s transparency.

Retail investors should spend some time learning about the foreign exchange market before researching which foreign exchange broker to sign up with. Retail investors should also find out whether the foreign exchange broker is regulated in the United States or the United Kingdom (dealers in these countries have a higher level of oversight) or in a country with more relaxed rules and oversight. Find out what kind of account protections are offered in the event that there is a crisis in the market or if a dealer goes bankrupt. This is another thing that you should look into.

Continue reading to find out what the foreign exchange markets are, why they exist, and how you may get started investing in them. If you live in the United States and you want to buy cheese from France, either you or the firm from which you buy the cheese is going to have to pay the French for the cheese in euros. The price of the cheese in euros is determined by the French (EUR). Because of this, the American importer would be required to convert the same amount of United States dollars (USD) into the European currency.

The same may be said for going on trips. Euros are not an acceptable form of payment in Egypt. Therefore, a visitor from France who wants to view the pyramids there will need to use another currency. At the current exchange rate, the tourist is required to convert their euros into the country’s unit of currency, which is the Egyptian pound in this instance.

This international market is distinguished from other similar ones in that there is no one marketplace where foreign exchange can be bought and sold. Instead of taking place on a single centralized exchange, currency trading is now done electronically over the counter, often known as OTC for short. This means that all transactions take place between traders all over the world through the use of computer networks. 

Currencies are exchanged around the world in the major financial capitals of Frankfurt, Hong Kong, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich—across practically all time zones—during the twenty-four hours a day, five and a half days a week when the market is open. This indicates that when the trading day in the United States comes to a close, the currency market reopens for business in Tokyo and Hong Kong. As a consequence of this, the foreign exchange market can be very active at any given time, with price quotes continuously fluctuating.

The foreign exchange market has been around for millennia, at least in its most fundamental sense. For as long as there have been people, there has also been the practice of exchanging products and money for the purpose of making purchases. However, the foreign exchange market, or forex, as it is more often known today, is a very recent creation.

After the Bretton Woods accord started to fall apart in 1971, more currencies were permitted to float freely against one another. This was done to increase market efficiency. The demand for and circulation of different currencies both have an impact on the values of those currencies, which are tracked by foreign currency trading services. 

However, there are also opportunities for professional and individual investors to speculate in the foreign exchange markets by trading one currency against another. The majority of the trading that occurs in the foreign exchange markets is done on behalf of clients by commercial and investment banks.

As a category of assets, currencies are distinguished by two key characteristics: you have the potential to profit from the difference in the interest rates of two currencies, you may be able to make money off of shifts in the currency exchange rate. An investor has the opportunity to make a profit from the difference in interest rates offered by two distinct economies by purchasing the currency offering the greater rate of interest and selling short the currency offering the lower rate of interest. 

The significant difference in their respective interest rates, investors frequently sold short on the Japanese yen (JPY) and bought British pounds (GBP) in the years leading up to the global financial crisis of 2008. A carry trade is one name that has been given to this trading method on occasion.

Study shows that nearly 40% of those who Report Fraud attacks are young adults between ages of 20-29 yrs old

Federal Trade Commission

If you want to keep yourself safe from falling victim to internet scams, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!

Table of Contents

CHAPTER 1: Overview of Forex Markets in 2022

forex flags

The foreign exchange market is the venue for the trading of currencies. It is the only market in the world that can be considered fully continuous and ongoing trading. 

The foreign exchange market used to be controlled almost entirely by major banks and other types of institutional corporations who transacted on their customers’ behalf. However, in recent years it has shifted its focus more toward the retail sector, and traders and investors with a wide range of holding sizes have been participating in it.

There are no actual facilities that are used as trading venues for the world currency markets, which is an interesting fact about these markets. Instead, it is a network of links that are made possible by trade terminals and other forms of digital networking. Institutions, investment banks, commercial banks, and individual retail investors are all considered participants in this market.

It is generally agreed that the foreign currency market is more mysterious than other financial markets. OTC, or over-the-counter, markets are where currency trading takes place; in these markets, disclosures are not required. The market is characterized by a preponderance of large liquidity pools sourced by institutional companies. 

forex setup

One may reasonably assume that the economic features of a country ought to be the most crucial criteria to consider when determining its pricing. However, such is not the situation. According to the findings of a survey conducted in 2019, the primary factor in setting the prices of various currencies was the intentions of huge financial organizations. 

Spot markets, forwards markets, and futures markets are the primary marketplaces in which foreign exchange (Forex) is transacted. The “underlying” asset on which the forwards and futures markets are based makes the spot market the most important of the three markets. As a result, the spot market is the largest of the three markets. Therefore, the spot market is typically what people have in mind when they talk about the foreign exchange market. 

Companies or financial institutions that need to hedge their foreign exchange risks out to a specified date in the future tend to be the most common users of the forwards and futures markets. This is because both of these markets allow for this hedging.

If you’re a victim of a similar scam please get in touch with us to that we can help you get your money back!

trading stocks chart

CHAPTER 2: Is Forex a Scam?

The Foreign Exchange, or Forex, market is a genuine trading market that is used to trade currencies from around the world. It should not be considered a scam on its own. 

Without the foreign exchange market, it would be difficult to trade the necessary currencies in order to buy or sell imports and exports, go on vacation, or do business across international borders. Scammers take advantage of the circumstances and the desire of inexperienced traders to enter the market by taking high leverage positions that, in principle, have the ability to make traders a lot of money. Additionally, there is no centralized or regulated exchange.

The foreign exchange market is known as a “zero-sum” market, which indicates that in order for one trader to make a profit, another dealer will need to make a loss. Because of this, the foreign exchange market does not bring value to the market as a whole. 

A significant portion of the currency movements are driven by huge corporate institutions and banks that are well-financed, and because these entities are better educated about the market as a whole, the trader who does not have sufficient capital is always likely to lose. The foreign exchange market is actively traded on a daily basis by major financial institutions and banks; yet, in order to achieve significant profitability in this market, a high learning curve is required.

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If you have any suspicion of a scam or phishing attack, then you can rely on TheClaimers to help you with protection, mitigation, and fund recovery. You will feel safe knowing that experts with years of experience will be guiding you!

CHAPTER 3: Why Do You Need Consultation for Forex / Robotic Theft?

Forex robots are utilized by a significant number of traders in today’s market because they make it possible to engage in automated forex trading, which is crucial when dealing with a market that is open around the clock. 

It is impossible for a trader to always keep an eye on the market. FX robots handle trades in the absence of traders and assist traders in predicting price changes in a logical manner, removing the emotional element from the decision-making process.

However, before you choose a forex robot and decide to depend on it, you need to be sure that it is not a scam. If it is, then you will wind up losing the money that you have worked so hard to gain. Reading through the various FX robot reviews that can be found online is a terrific approach to selecting a real robot. In addition to that, make sure that you keep an eye out for the warning indicators that are listed below:

forex on phone

• Anonymous developers

It is necessary for the website of the forex robot to have some background information on the creators. If names aren’t included, at the very least, an address or some other form of contact information should be stated there. 

On the other hand, if you see that the site’s developers are unknown and there is no information about them on the site itself, then this should raise some red flags for you. If you do lose your money, you will not be able to file a complaint with anyone because there is a good chance that they are perpetrating a scam on you.

• Vague information about the robot

If it were a respectable forex robot, its website would always include copious amounts of information about the product. You might discover the trading method it employs, the technical indicators it follows, and even more information if you look closely enough. 

On the other hand, there are certain websites that do not include any information regarding the things they sell. It is not a good idea to buy a forex robot without first knowing exactly what you will be getting, as the robot might not be compatible with the way you trade. In addition, the absence of information is suggestive of a hoax.

forex trade chart1

• Unrealistic claims

It doesn’t matter how effective, and consistent a forex robot is at generating profits under any market condition; it is not realistic for a robot to claim that it has doubled or tripled the capital in a very short period of time, such as a year. 

This is because it takes a long time for markets to move in such a dramatic way. Because of the unpredictability of the market, newly developed FX robots require multiple software updates before they can function well in a variety of market environments. Do not give in to the allure of these assertions because they are almost certainly untrue.

• No backtesting results

Backtesting findings must support any claims made by a forex robot developer on their website. 

Those claims must be verifiable. If you cannot find these outcomes on the internet, there is no way for you to validate the claims that the robot makes about how well it performs. Therefore, the FX robot should not be relied upon in any way. Before you buy the robot, make sure you have a clear understanding of its capabilities and have properly checked any backtesting results that are provided.

MyFxBook is a network for traders that allows users to assess the performance of any forex automated trading system. When you come across a new robot that you are interested in purchasing, you should make it a point to check out its MyFxBook account as soon as possible. It is the best area to keep an eye out for cons.

Analyze Data

Verify the following points:

You will see that there are two alternatives available right at the very top of the chart. These options are “Track record verified” and “Trading privileges verified.” Verify that the “checked green” box is selected for both of these options. If even one of them has a red X across it, then the statistics regarding the success of the trading cannot in any way be trusted.

The next step is to check the bottom left corner of the chart to determine the most recent time it was updated. The most recent trade results can be determined if it has been updated relatively recently, within the past several days. On the other hand, if you see that the chart hasn’t been updated in a few months or years, then the data it displays is likely outdated, and the robot’s performance may not be up to par right now.

Now take a look at the statistics regarding the results of the trading. Equity and drawdown are two important metrics that demand your full attention. It is challenging to keep both large equity and low drawdown at the same time. You ought to use extreme caution if an account displays a drawdown percentage of less than 30 percent and an equity percentage of 100 percent. Great statistics are not unheard of, but it is quite unusual for someone to have them.

Finally, search the entire page that contains trade results for any concealed information by reading it from top to bottom. Forex trading robots that are not part of a fraudulent scheme have nothing to conceal. If a robot is trying to hide its outcomes, then you cannot rely on the information that it provides. Before you part with any cash, do some research to make sure there won’t be any unpleasant surprises down the road.

DO YOU SUSPECT THAT SOMEONE HAD SCAMMED YOU?

If you have suspicions of a scam or phishing attack, you can rely on experts to help you with protection, mitigation, and fund recovery. You will feel safe knowing that experts with years of experience will be guiding you!

man-thinking-of-scam-protection.png

CHAPTER 4: What Happens if You Avoid Consultation for Forex / Robot Scams?

The foreign exchange, or forex, markets are the most liquid because they have the highest average daily trading volume of all markets in the world. 

Due to this, it is simple to initiate and exit a position in any of the major currencies within a fraction of a second for a modest spread in typical market situations. This is made possible by the fact that these currencies are traded on several exchanges.

The foreign exchange market is open for trading five and a half days a week, 24 hours a day, beginning each trading day in Australia and winding down in New York. The extensive time horizon and coverage provide market participants with multiple opportunities to generate profits or mitigate losses. 

The most important financial hubs for the foreign exchange market are located in Hong Kong, Frankfurt, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich. Because leverage is used extensively in forex trading, you can begin trading with a little capital investment and quickly quadruple your profits through the use of leverage.

pump chart

The automation of the forex markets makes for an environment that is conducive to the efficient implementation of trading techniques. Because forex trading generally adheres to the same rules as ordinary trading and requires a significantly lower initial capital investment, beginning forex trading is easier than beginning stock trading. 

The traditional stock market and the bond market are more centralized than the foreign exchange market. Because there is no centralized exchange that dominates currency trade operations, the possibility for manipulation using insider information about a company or stock is lower. In addition, there is no such thing as a centralized exchange.

Experts believe that automated trading contributed to the rapid decline seen in the market this week and may have been the first catalyst for the sell-off. Computers utilized by financial institutions are typically pre-loaded with intricate sets of instructions known as algorithms. They spot potential business opportunities and then seize them much more quickly than any person could.

The use of algorithms in trading has become so widespread that some analysts believe that well over half of all trades involving the S&P 500 Index are conducted using algorithms. This type of automated trading very definitely expedited the sell-off that took place on Monday, which resulted in a fall of 800 points for the Dow Jones Industrial Average in just ten minutes.

forex charts on phone

According to Tom Stevenson, Investment Director of Fidelity Personal Investing, “The explosive speed of the fall… that is done by machines.” The majority of market analysts feel that a report on the US employment market that was released on Friday, which showed robust wage growth, was the catalyst for the market drop.

However, it is possible that automated traders were the ones who decided to sell after hearing that news. The swift progression of both technology and the financial markets has resulted in the birth of a great deal of investment tools and technological advancements. One of them is the endeavor of earning a profit via the buying and selling of foreign currency transactions that are carried out automatically by the use of forex trading robots.

This automation begins with the search for purchasing chances (open purchase), followed by trading possibilities (open trade), and finally, selling opportunities (open sell). You can rely on forex trading robots instead of continually observing the market by yourself, as they will do this for you. Nevertheless, even because it has this benefit does not imply that it does not have any weaknesses or that it does not also have some drawbacks. 

To begin, robots are not people; as a result, they can only operate in accordance with the instructions they are given and do not engage in analysis. Second, machines are unable to gauge the degree of market volatility. Third, the utilization of robot services results in an increased cost. Fourth, there is the possibility of being defrauded by websites that provide services related to forex trading robots.

phone-with-cfd-chart

Forex trades are significantly more volatile than conventional market trading, despite the fact that forex markets are the most liquid marketplaces in the world. Numerous dealers have suddenly become bankrupt as a direct result of the use of excessive amounts of leverage. Because banks, brokers, and dealers in the foreign exchange markets permit a significant amount of leverage, it is possible for traders to control large positions with a relatively small amount of their own money to invest in the trade. In forex trading, it is not unusual to use leverage in the region of 100:1. A trader needs to have a solid understanding of leverage and the dangers that are introduced into an account while using leverage. 

To engage in profitable currency trading, one must have a solid understanding of the economic fundamentals and indications. For a currency trader to have a firm grip on the fundamentals that determine currency prices, they need to have a comprehensive understanding of the economies of the various countries and how they are intertwined with one another.

Because of the forex market’s decentralized nature, it is held to a lower standard of accountability to regulatory authorities than other financial markets. The jurisdiction in which currency exchange takes place affects both the breadth and depth of the regulatory framework that governs currency markets. Because the foreign exchange (Forex) markets lack instruments that generate continuous income, such as regular dividend payments, they may be appealing to investors who are not interested in receiving returns that are exponential in nature.

stocks daily result

CHAPTER 5: Age Isn’t Just A Number, Forex Scammers Are Targeting You!

Some con artists purposely prey on elderly people by taking advantage of their desires and the circumstances of their lives. 

Con artists are constantly developing new strategies, and many cons are designed with senior citizens in mind specifically. Scammers may specifically target elderly victims because they are believed to have more wealth or because they are less likely to disclose the crime. Fraudsters frequently capitalize on the desire of elderly people to enjoy a comfortable retirement, to have meaningful connections later in life, and to provide for their families.

According to the findings of the Consumer Sentinel Network Data Book for 2021 published by the Federal Trade Commission (FTC), younger people are more likely to report losing money due to fraud; specifically, 41 percent of people aged 20 to 29 compared with 18 percent of those 70 to 79 years old. On the other hand, persons over the age of 70 report losing an average of $800 more than those under the age of 70 do. Consumers who are above the age of 80 report even greater median losses, amounting to $1,500.

The “impersonator” scam is a broad category that includes many of the current cons that target older citizens. In this type of con, the con artist appears to be someone else in order to win your trust or scare you into complying with their demands.

Forex

CHAPTER 6: Consultants Have Advised Ways To Protect Yourself from Robot Fraud

Learning how to trade successfully on the Forex market is the single most critical thing a person can do to protect themselves from falling victim to fraudulent schemes on the Forex market. 

However, this presents a challenge in that it is difficult to locate reputable Forex brokers and lecturers who can be relied upon. The novice trader is responsible for conducting adequate research in order to verify that the broker has, in fact, earned the amount of money that they claim they have. 

The foreign exchange market is not a gambling establishment but rather a very serious market where everyday transactions involving trillions of currency units take place. Make use of demo accounts and practice making gains over the long term before you start trading for real money. Be conscious of the fact that, just like with any other professional talent, it may take years to truly perfect Forex trading. Avoid listening to anyone or anything that makes the claim that “you can make money rapidly.”

If this is money that you have worked hard for and that you cannot afford to lose, Paul Belougour, managing director of a retail Forex trading organization, has gone so far as to advise, “never, ever invest in foreign exchange.” Do not believe the assertions that are stated at face value; rather, take the time to conduct your own investigation and analysis. 

A trader who lacks expertise should be critical in their approach, conducting statistical analysis and developing their own routines that they have first tried out on a demo account and found to be successful with. Although accomplishing this goal may take some time, it will be more beneficial to a trader with limited expertise than placing their faith in an automatic computer program. Do not hurry into making an investment that appears to be too good to be true.

The genuineness of the organization that is making the claims or providing the expertise or course is something else that a person might wish to investigate. To do this, check the location and the jurisdiction where the business is registered. A lot of Forex scammers will trade from a location where they believe the local law will make it difficult for them to be prosecuted internationally. To do this, check the location and the jurisdiction where the business is registered.

Key Takeaways!

When compared to other markets, the foreign exchange market makes day trading, swing trading, and trading in tiny sums much simpler for traders, particularly those with minimal funds. 

Trading based on longer-term fundamentals or engaging in carry trades can be advantageous for investors who have more assets at their disposal and a more patient time horizon. In order for rookie forex traders to become more profitable, it may be helpful for them to focus on gaining a grasp of the macroeconomic fundamentals that drive currency prices and to get experience with technical analysis.

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