Forex - "Fraud" or "Improvidence"
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Thread: Forex - "Fraud" or "Improvidence"

  1. #1
    Super Moderator Gulfstream's Avatar
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    Forex - "Fraud" or "Improvidence"

    Forex - "Fraud" or "Improvidence"

    Forex - "Fraud" or "Improvidence"
    : when these concepts are contiguous, and when it derived one from another?

    In order to simplify us the understanding of this question, let's define each of these concepts.

    So, the "fraud" - is the theft or acquisition of rights to someone else's property, including funds and other benefits by deception or abuse of trust. This deception can be both passive and active form.
    The passive form of deception - is a deliberate omission of any facts (events of reality), while the active form of deception - is a conscious distortion of the truth (reality).

    Under the "improvidence" is often understood the negligent, carefree, short-sighted attitude to the events happening around.
    The concept of "improvidence" is closely connected with the concept of "inattention" .

    Regarding the Forex market, there are present both concepts.
    Fraud at Forex - it is one of the most prosperous areas. And believe, it is “a vast sphere for action”. The lack of clear legislative framework governing relations at Forex currency market, «let off the leash»to many people.
    If we consider scope of activity at the Forex market the so-called scammers can be divided into several groups.

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    Last edited by Gulfstream; 09-03-2015 at 12:21 PM.

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    Super Moderator Gulfstream's Avatar
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    The first group, that is the larger one, includes broker offices (BO) and dealing centers (DC), luring his customers with a variety of «goodies» (giving the bonus, high-profit, etc.), colorful writing about how you can easily and without efforts to make a handsome fortune in the Forex market. In most cases, their target are traders-beginners. Often, such as DC/BO are the smaller companies with their "kitchen". In such circumstances, the opened orders by trader aren't bringing out on the market itself, and are performed within the same company. And if a trader is trading well, BO or DC begins to apply on him different kind of tricks (fraud schemes) because to lose the money is not profitable for company.

    In the arsenal of such a company could be a several ways with which it may successfully turn the enough profitable deal into unprofitable . One of such methods is:
    · changes of quotations - DC/BO, seeing the position of the trader's stop-loss, hold out the quotes to the desired mark to make the system worked and the Trader's order closed with a loss;

    · the expansion of the spread - expanding the spread DC/BO impairs trade conditions for the trader;

    · manipulation of Stop-out levels and accrual of swaps – wrong calculation of the stop-out allows the DC/BO put in a claim the trader - margin call, according to which the trader is obliged to provide additional funds in the account to continue trading. Regarding the accrual of swaps, the DC/BO simply "forget" to count the positive swaps in favor of the trader;

    · sending of requotes with losing price – when the price moves towards the losses, the trader sends an order to close the the position, but instead of closing the order, DC/BO, referring to the change of quotations, send to the trader the requotes with losing price, thereby marking time.While requests are in transmission the trader's losses grow, and DC/BO is in a double advantage (trader took a losing quotation and for the transmission of requests the price even more shifted in the losing direction for trader)

    · change / delete of a profitable position – profitable position of the trader increases in volume and changes entirely to the opposite, thus "consuming" the last part of the deposit. Sometimes a profitable position is simply deleted.In the absence of the open order sreenshot, in this case, nothing can be proved, because the DC/BO will present you a report only in the light of their interest.

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    Super Moderator Gulfstream's Avatar
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    The second group, no less large, is composed of companies that offer to invest your funds in the Forex market. The purpose of these companies is to get in management your funds for some fee. And in order to attract your funds in management, these companies often use misleading advertising.

    Often such advertising consists of slogans about increasing in start-up capital in 3 times or more, making a profit without any risk, and a guaranteed return of your invested funds. However, it is just a soap bubble — seems like everything is fine, nice, but in reality isn't practical. This bubble, be sure, sooner or later will burst and you will be "left with nothing".

    Scheme of such companies is very simple – they offer to bring your money on their trading account or open a trading account with a certain amount of money for further transfer to their management. Then comes the turn of events in two ways:
    1. the funds deposited by you certain time increase in volume, you are happy and pay the agreed fee, but then your money slowly begin to "melt" and in the end it turns out that they disappeared altogether;
    2. your money are silmply "throw" and never fulfilled (a shortened version of events).

    In response to all this, you can hear a very popular phrase: "It's okay, it happens, if you put in a certain amount of money again, we will refund you all lost ... and multiply...".And if you will tricked by it, you can consider that you have been deceived twice as further scheme of their work will be on the previously described scenarios.

    At such companies as usual is absent a license for trust management of funds, they are working on "word of honor", and if they make any treaty, it is clearly not in your favor.

    It is also possible that this kind of company, gaining a certain amount of capital, and seeing that a further capital inflows declined significantly, simply disappear with your money.

    So before trust your money to anyone, carefully examine all. In further detail the process of trust management of funds in the financial markets set out in the theme "The whole truth about the risks of an investor in the trust management of the foreign exchange market."


    The third group -are simple traders-private traders, who, as well as the second group, take management of your funds for transactions in the Forex market.

    Scheme of their work is identical to the scheme of the second group. The only difference between them is their legal status. In the second group is the companies, and the third - individuals.

    However, I want to note that not all trust managers dream of about the best way to take over your funds. Come across among them persons who, taking management of your capital, directly stipulate all possible risks and also the methods and working conditions. But in any case, taking any decision, do not forget to follow the proverb: "Trust but verify."

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    Super Moderator Gulfstream's Avatar
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    The fourth group consists of both companies and individuals offering "Grail". Here, the "Grail" refers to various types of webinars, courses, advisors, strategies, indicators, and all that is connected with it.

    In its advertising company above-mentioned persons offering their services in training or acquisition software (advisors, indicators, etc.), which, in their opinion, will bring you one hundred percent profit. It is often in the advertising it's used terms such as "guarantee", "no risk" that, in fact, are not compatible with the activities in the Forex market.

    As an example is the few situations of such persons work.

    1st Situation. The company advertises its courses (webinars) based on the company's specialists's strategy which can bring a guaranteed profit, exceeding several times your initial capital. As a "bait" serves an opportunity to try out this trading strategy in the market for funds of the same company.
    As a result, you pass the training, you will be opened an account, the results will not be late in coming: the profit grows, you are enthusiastic, and then you offer to go on an independent voyage to conquer heights unshakable market, as due to their courses you have already achieved considerable success.
    Seems like everything is good, but the frustration is already waiting for you. It comes when you start trading on their own real money and unexpectedly "throw" their deposit.
    And then the question arises: "Why did it happen? After all I did everything like I was taught, and before I didn't have a problem with it .... "The answer is simple: your orders where not brought on the real market, and were committed within that company where the account was opened. The scheme of these companies we already know (see the first group). The only difference between them is that the first of a profitable trading makes unprofitable, and the second, on the contrary, of unprofitable - profitable, because trading in the company's money is only in demo version.

    2nd Situation. You are offered to buy the software, colorful described all its possibilities, providing data on the tests, which show the work of this software as an advantage. And if a person does not know all possible aspects that must be considered when using such software, the risk to buy a "pig in a poke."
    Here's a "pig in a poke" and breaks all illusions about the multi-million dollar profit, when it begins to show unexpected results for you (often negative than positive). In the future, it turns out that software has not been tested on a real account, the time period of its testing is very small, and the settings you can't understand nothing.

    I think everybody knows that the Forex market is dynamic and there is no such software and / or method that would allow guaranteed without the risk earn money in this market.Therefore a person that promises you mountains of gold, first of all should cause you suspicion and concern.
    I doubt that such successful people, in their words, earn millions and have profitable trading strategy would spend their precious time on the sales of a software and/or holding a webinars, thereby sharing their idea of a guaranteed profit.

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  5. #5
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    The most popular fraud we have in the business is the last one, which individual fraud where in some one who is yet to trade and make money tells you on how to trade just to sell some untested strategy. In the aspect of the first group, most of the times some brokers are been accused wrongly and most of the traders that feels cheated on are the scalping traders, I have been doing a whole lot of research and have seldom see where a long term swing trader complain much about brokers requote or stop haunting.

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  6. #6
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    The First and Fourth group are very popular and can be searched on internet using keywords like "forex holy grail" or "guaranteed no re-quotes", "tight spread" etc. I find such brokers everyday when i am searching something or visit some specific websites. It is also very easy to fall in trap of forex signal providers or robots sellers etc. You just need to get registered on some websites and they will start sending you emails which will claim to have holy grail strategies or robots. We need to be aware of such fraudulent activists and their activities.

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  7. #7
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    I gave myself some time to read thread carefully. So far in my last 5/6 years in forex trading I have visited more than thousand accounts in many brokers and I have different types of experience with them. I had some money with some brokers which does not exist now. I made profit which I didn't get with some. Now I trade in only 3/4 brokers and till now they are proven well.

    And I believe in myself so I don't go to a broker who tell you deposit money for getting something else. I also try to find a broker which is old, have forum or large facebook page. When I am confused with something I no longer trade there. I think I am lucky that I got roboforex.

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    This is a very good article, I have the same query with the thread starter, because most of the ways the marketing gimmicks are going on in the financial market environments is on its alarming rate, and they are basically selling false information. Well, there is no way the newbies will not be falling a victim as usual, but the experienced traders are now wise.

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  9. #9
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    Just sharing another fraud here guys, i have seen a broker which calles smartfx that tried to fraud the clients. Nothing actually happened at any other mt4 but suddenly USD/CAD pair in smartfx just go down around 100-200 pips. After 6 hours, they delete it from their mt4 like nothing ever happened. And do you even think they will accept your protest for that? No, they will ignore you.

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  10. #10
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    Good thread, I have never read this kind of article before. I think I am including a lucky trader, I've tried to trade twenty broker or more, some of them are already declared bankruptcy, even one of them are scam or cheating, and now these broker does not exist anymore, but I never had a problem when I still a part of them as a client. That's why I say that I'm lucky person in this regard.

    Thanks for this valuable information mod...., really I need this kind of topic.

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    If you lose, be patient. If you win, stay humble

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