Forex, Fraud and Fake Identities

Forex and fraud are very common bedfellows and when you consider the money that is at stake, it' easy to see why.

The Forex market is often touted as a 'get rich quick scheme' and a way to make some quick money. The truth is it's nothing  of the sort and more often than not it's participants will lose all there money. The reason that people tend to lose their money has little to do with the actual market itself, although that accounts for a lot of losses, but rather the scammers and con-artists that prey on the weak and greedy.

One common scam that has been around for years is the 'fake guru' who offers to 'train' losing traders and make them into winners.

The con is as simple as it is outrageous.

First the con-man will set up a false identity and then begin to attribute fake credentials and authority to that identity. They will establish a paper-trail that shows the fictitious person is a competent trader with a wealth of knowledge.

If the con is successful then the thief can make a considerable amount of money which is what makes it so appealing. By using a fake identity the criminals are distancing themselves and ensuring that they will never be held personally liable.

When people lose money or damages are cause as a direct result of the bogus traders advice, the con-man gets away completely unscathed.

One such con that has recently come to light is that involving a Mr. Dale Woods of Woolongong, NSW, Australia who runs the website theforexguy.com

He was recently exposed as a scammer and a fraud on the site www.forexexposed.com and was revealed to be taking money from people under false pretence.

Mr. Woods had created a persona and was using the alias 'Graham Blackmore' to perpetrate his fraud. He had also written a book under the alias to give further credibility and make it even easier to dupe his victims.

It's unknown how many people unwittingly gave him money but it's believed to be in the thousands. When you consider that he charges about $250 per person you can see how lucrative it was for him.

The most shocking fact of all is that at the time of writing this article, it is still going on.

Reports have been made to the NSW Police via their Crimestoppers hotline (https://www1.police.nsw.gov.au/List.aspx) and also the Australian watchdog, Scam Watch (http://www.scamwatch.gov.au/)

If you feel that you have been the victim of this or any other Internet related fraud then you are encouraged to contact the authorities and have these criminals brought to justice.

What is Forex Trading?

If you are wondering what is forex trading, it is essentially the trading of currencies of different countries. Forex stands for foreign exchange, and it works somewhat like the stock market in the sense that you buy low and sell high. But it’s also in many ways different. Here is an example: the currency in many European nations is the Euro (EUR), while in the US it is the dollar (USD). A forex trader may buy Euros while selling USD at the same time, a process known as going long with the EUR/USD, or whatever currency is being traded.

How Foreign Exchange Works

Currency or forex trading is usually done via a market broker. When you trade you have to select a currency pair that you believe will change values, so you make a trade for it. For instance, if you bought 1,000 Euros in January 2014, it will cost you $1,300 USD. Assuming that you held onto your Euros for a year, and by again assuming that time the value of the Euro reached $1,400; if you sell, you will gain a profit of $100.

Currency trades can be made online. These days it just takes a few mouse clicks to place an order, after which your broker will send your order to the appropriate market to set your position. Once your trade is closed, your position is closed and your account will be credited with the profit or loss. This isn’t as complex as it sounds, as the process is now fully automated.

Managing Forex Trades

As you can see, answering the question “what is forextrading” is quite easy, but while the process is simple, you need to approach it with caution and due diligence. Just like the stock market and investing in general, you need to do your homework first. If you want to succeed in currency trading you must rein in your emotions and learn about risk management.

The biggest challenges for new traders is (1) using too much leverage, (2) too nervous about losing money, or both. Before you begin trading, make sure you know your risk appetite and study forex risk management. While everyone can profit from currency trading, you still need to set stop limits so you don’t end up losing money. These measures are very important. 

Getting Started

If you want to go into currency trading, you have to get in touch with a forex broker or trade online. Either way you will need to open an account and fund it. Once your account is ready you have to decide what currency pair to trade. A lot of beginners go with the EUR/USD since it is very liquid and is actively traded. However, you also need to look at the market situation and decide what is best.

Now that you know what is forex trading and have chosen a currency pair, use a chart and start analyzing its prospects. If you expect the currency to fall, you short trade it, and if you think it will go up, you go long, or buy it. Once you have made your decision, you can begin trading and make some serious money.   

To learn more about Forex Trading visit Baby Pips and read their comprehensive guide.

Ways of Making Black Box Trading Work for You

Black box trading, or automated trading, is becoming more widespread, and the reason for this is that it allows anyone, even a new trader, to make market transactions that would have been otherwise impossible without these technologies. Not only is the technology becoming more affordable, but there are a lot of benefits that traders can get out of it, not the least being your trades are placed automatically in your account.

How to Get Into Automated Trading

The simplest and most effective method to get into auto trading is to use an existing system. This isn’t as simple as just copying of course as you also need to know how these systems function. If the idea of entrusting your funds to another person or a system makes you uncomfortable, learn as much as you can about it. Does the system work with ranges or trends? What kinds of strategies are in place, and are they for short, medium or long term? Just like with the stock market, you need to check the reward and risk ratio of each strategy, and the win rate as well. In other words, the more you know, the easier it will be to pick a forex automated strategy.

Essential Features of Trading Platforms

Automated trading systems should provide you with real-time and historical data that can help you assess strategies. With automated trading you should know each strategy’s profit and loss as well as other vital facts and figures like the risk/reward ratio, the loss/win percentage and intraday and max drawdowns. Black box trading will give you all the stats necessary to get some insights into each approach.

Modifying Strategies to Meet Your Needs

If you’re the type who likes to tinker with different strategies then this is the approach for you. Under this type of trading you take an existing system and make modifications until it suits your style and preferences. For instance, you may have found a forex strategy that generally suits your taste but you don’t like the limit levels imposed. Or perhaps the strategy uses a moving average that you’re not comfortable with and want to change it.

If this is how you want to trade, you’re in luck since there are a lot of web based trading platforms that provide such types of customizable strategies. Using this approach you can customize parameters like currency pairs, stop loss levels, indicators, timeframes and many others. These platforms also allow you to optimize and back test these strategies.

If you are an advanced trader you will probably want to develop your own strategy from scratch. There’s a reason why this is designed for advanced traders; it takes a lot of time and it can be difficult. But if you know a system that’s consistent, there’s no reason for you not to try it.

If you are going to use black box trading while customizing strategies, it is best to open a demo account (virtually all platforms allow this) so you can try out the different strategies. If the results are satisfactory, you can go live and start trading.