Why people think Forex is a scam?
Some people still think Forex Market is a scam. Of course, it sounds ridiculous for traders and people with a degree in finance, but other people often take this statement seriously. Simple lack of understanding of economy may result in creating myths and lies about Forex, which unfortunately can discourage a lot of people with high potential.
“Forex is simply the market of the currencies. It is similar to real estate or auto market. You can’t say the auto market is a scam.” Robert Parker, CEO of Holborn Assets - Holistic Financial Planning Services, Dubai.
Charging bull of the Financial District in Manhattan, New York City.
Forex is simply a market, it is used by governments, banks, companies, and simple people. Have you ever travelled somewhere? If you have, you should know that you are going to need some foreign currency on your trip, which you can buy from your local bank (and most likely not at the best price).
Do you want to buy some foreign products? You can do that because a business owner bought foreign currency to buy that product and then sell it to you at a higher price. No one, of course, would call this businessman Forex scammer.
Everybody uses Forex in daily life, but not everyone gets to profit from it. Why is it considered to be a scam then? The answer is simple: they don’t understand it. People who come to the Market without any knowledge or preparation and expect to become millionaires in just one day are not very good at coping with the results of their own actions. They simply throw money at their broker and expect to get rich in one click, and when they fail, they blame the market.
“Markets are never wrong – opinions often are.” -Jesse Livermore.
According to the Bank for International Settlements, trading in foreign exchange markets averaged $5.1 trillion per day in April 2016. The fact that some people cannot make money through Forex trading doesn’t mean Forex is a scam – there are plenty of Forex traders who made it their profession for life.
“Most people give up long before they get to this point. They blow through their first trading account and get discouraged, think their brokers are sabotaging them” Felix De Vliegher, 10+ years Forex trader.
So, if Forex trading is legit, why people give it up? The answer is: they don’t get prepared, they lose control of their emotions, they can’t stick with a trading plan long enough, and they don’t educate themselves. As a result, they lose and blame the market. Just as with any other business. But if you are prepared, Forex can be your source of financial freedom.