Forex is a scam!

Forex is a scam!

I studied and practiced for quite awhile and as soon as I went live those MM make sure to go against your trade-they along with the big banks make the money.

I feel they analyze your deal and make sure to go against it.

This is something I received from an obviously disgruntled now ex-forex trader yesterday. He’s not the first to make that statement, and I’m sure he won’t be the last. I’ve been involved in the forex market as a trader and/or analyst for more than a decade now, so I think you can figure out where I stand on the subject.

The primary argument folks who make the scam claim put forward is that fact that forex brokers take the other side of your position in their market making actions. They thus conclude that said brokers are trading against you.

First of all, not all forex brokers are market makers. Some are ECNs. They simply pass your orders through into the market like a stock market broker does. Since they don’t act as market makers and take no positions they do not earn the spread, so they make their money from commissions instead.

Oh, and by the way, not all stock market transactions are straight pass throughs to the exchange either. Some brokers act as market makers in certain stocks, so if you trade those stocks through them they are doing the exact same thing as the non-ECN forex brokers do. I don’t think anyone ever calls that a scam. Further, the whole basis of the interbank market – and all OTC markets – is transactions between buyers and sellers and market makers. In interbank forex, the banks are the market makers, both with and amongst each other and with the funds and companies that are their customers.

On top of that, there are market makers in all markets. They are the ones who provide steadily liquidity by always being ready to provide a quote and take the other side of a trade. Without them the markets would operate much less smoothly. As a rule, market makers in all markets look simply to make the spread over and over and over again. They don’t generally look to take positions, but rather to be net neutral.

Forex brokers who act as market makers operate in basically the same fashion. They are just offsetting customer longs and shorts against one and other. Do they sometimes have an overbalance? Sure. In such cases they have internal processes which determine whether they keep the exposure or whether they offset in the market. Different brokers handle things different ways in that regard.

One of the other arguments scam claimers make about forex brokers is that they run people’s stops. Guess what? That gripe has been in the markets for years – all markets. For traders in the futures pits are supposedly notorious for that kind of action. Here’s the thing, though. The markets and market makers exist to facilitate transaction flow and make their money from it. They are going to do whatever makes sense to increase that flow. That periodically could include running stops.

That sort of action, though, is a bit easier in the futures pits than in the widely dispersed forex market. Brokers and dealers generally keep their prices tightly in line because if they don’t they can lose business. As such, stop running is not something easily accomplished. It would take a highly coordinated effort among a wide array of market makers to do that kind of thing.

In most cases, the claims of stop running coming from forex traders is nothing more than people getting burned by putting their stops too close to the market and getting taken out by normal volatility.

The question I would ask for anyone who is making a claim of forex being a scam is whether they can demonstrate a trading system with a meaningful track record of success and that they followed said system as designed. A lot of traders spend a relatively short period of time in demo trading and make good returns with no real proven method, then find that things are very different when it comes to real money. This is more about the trader than the broker.

The idea that your broker looks at your specific open positions – out of the many thousands of trades that might be open at a given time among all their customers – and make decisions based on it is egotistical and self-centered in the extreme.

If you really have a problem with market making forex brokers then trade through an ECN.

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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.


  1. Katherine says:

    Taking the suggestion of the “demo” account, I’ve actually opened more than one to test multiple platforms. These demo accounts all have live charts on them. While some brokers may limit your demo account availability for a finite number of days, there are so many vendors I doubt you’d run out of “demo” account access to charts for a good long time.

    Anyway, my whole point is… If you think the market maker is trading specifically against you, check the other vendors charts! Surely one market maker has no more influence over everyone else’s charts than you do.

    I’m still in demo mode, but seemingly get traded against regularly. Seems almost like just about the time I give up and bail out of my position, the market moves in my direction immediately afterwards. Seems eerily predictable. So, I checked some other charts. Guess what, besides the spread, they were identical. Just proves that Murphy’s law and inexperience are my only foes at the point.

  2. Mark says:

    Yes, Forex is opertated like a scam! These Hedge Funds and major institutions see all orders coming through and trade against them with their millions and billions of dollars causing all of the small traders getting wiped out. The guy writing this article is baised because he works in the industry, protecting the “big boys.” It;s B.S. How is it when I practice trade the trend continues as predicted, but when I place a big order it immediately switches direction and wipes me out? Stay out of Forex, it’s unregulated and they scam you and me.

  3. John says:

    Mark you make me laugh! :-)

    As the “guy writing the article” I have no bias. I do not now, nor have I ever worked for any bank, brokerage, fund, or any other institution involved in taking positions or managing transactions in any market. My work as an analyst is for a group which provides analysis on a 3rd-party basis. Seeing as our forex commentary (I’m currently in stocks, but used to be in forex) is available to both FXCM and Oanda forex traders at no cost (and by subscription to anyone who wants it otherwise), the idea that I’m biased toward the institutions is a complete joke.

    And Forex is becoming increasingly more regulated.

  4. Adewole Musilu says:

    I’ve read and listen to different people with claims and counter claims that forex trading is a scam. I personally transact with AVAfx, a forex platform. What I experienced is that anytime I opened the platform ready for trade, a position would be opened automatically against the trend without my involvement. I reported the case to AVAfx but claimed it was a virus on my computer. I formated the computer and installed an antivirus, same thing happened.
    My question then was that why is it that a positioned is opened against the trend and not in the direction of the trend? with frustration, i was forced to wthdrew remains of my fund.

  5. Mr.Wiseman says:

    as we have now seen that investments banks, hedgefunds, large insurance agents, ratings agencies and others have been colluding in more than a few mulit billion $ scams while the regulatory authorities sat back on their laurals,it requires much more to convince Joe public to part with their money and trust any organised money making system than a few words on an internet page. I am not convinced yet i have been conned, and more proove will be required before i trust any forex broker pertaining to offer me direct access to the real Forex market.

  6. Kris says:

    I am desperately looking to find a way to make money from home. I’d like to get into the trading scene but dont know where to start or even if its a good idea. Im willing to invest in the time to learn. Im even willing to start small and take the time to build it up. but again…NO where to start…Should I start with stocks? Should I do Forex? I barely know the difference between the two. Is it even a viable option in todays economy?

  7. Mark says:

    Kris, you won’t make an income from home from Forex, 98% of people lose their money one year because it is an unregulated market designed to wipe you out. They don’t even execute trades at the price you initiated. Stocks are easier because it’s regulated but with all the skill in the world you will lose money (like the pros) about 2/3 of the time, so cut your losses and have your third stock run a huge profit and you have a chance at making an income. That’s the real side of the story you don’t hear often.

    • John says:

      Mark – Contrary to what you may have heard, forex is increasingly more and more regulated. In the US it’s been put under the oversight of the CFTC, and through them the NFA. It’s not the Wild West it used to be, at least in the US. I can’t speak to other countries.

      As for comments about not getting executions at the right price, I can’t think of any time among the years worth of trades I’ve done where I didn’t get a fill in line with expectations (or if so that wasn’t corrected by the broker). If you’re having problems with that then either there’s a problem with what you’re doing or your broker is doing something untoward (unlikely as they actually want you to execute trades).

      Stocks are neither easier nor harder. All the same mistakes trip traders up. The only difference is the permissible leverage. Believe me, regulation does not mean less chance of losing money. After all, regulation didn’t prevent Enron or any of the other scandals that crushed any number of unfortunate stockholders.

  8. david says:

    I and millions of people need opportunities to survive. After researching all complaints, looking at broker websites, the nfa and ctfc websites, I concluded that though the forex market is legitimate, forex brokers are not. It is a scam to trade the forex market. It should be heavily regulated and enforced. It is a SHAME that the forex market has such great opportunities that everyone needs but is WASTED because of all those crooked brokers who cheat, lie, and steal your money.

  9. Mark says:

    I lost nearly all my money making big trades; small tades on the other hand I made over 1000% gain. That”s an indication someone trades against the big trades.

    • John says:

      Mark – Or could it simply be that you were taking too much risk with your big trades and that once you lowered your risk your drawdowns didn’t do nearly as much damage?

    • THE Truth says:

      I been reading Mark common from beginning. I know how you feel MARK and completely agree with you. I trade for living and I do very well in Stock market. However Forex market is whole new game, every tick is being control by interbank, every tick it move it move to make money for the banks own interest, someone win someone have to lose. Money don’t come from no where. you take a buy some one have to sell to make trading work and complete. Don’t you ever wonder why 5% or less is making it in market. 95% blow up account in less then 6 months.?? Don’t believe me try this is REAL MONEY account, Pick random buy or sell 30 pip SL 30 pip TP. Do it for about 100 or 1000 trades. about 90+% of the time you will get hit on SL and its will never be 50/50 chance like stocks.

  10. Jim Manning says:

    I do believe their is a lot of market manipulation and that Traders really start believing their own mail – certain economic analysts are very capable of saying anything the institution they work for want then to say to set up market conditions. Oil Futures are one good example and crashed when OPEC finally called them all out by cutting production not once but twice. The Aussie Dollar is the sixth most traded currency in the world – it does not deserve that status – but dealers see it as safe and able to be manipulated.
    The big fund managers can easily set a market to their requirements.

  11. Pierre says:

    ok, here it is the truth about Forex (or trading in general). The market is TOTALLY random, therefore it is IMPOSSIBLE to be consistently proficient. Over time, no matter what strategy you use, you’ll lose money, and your money goes to the pocket of your broker. If the market had some degrees of predictability, then one would learn how to make money out of it, since there is NONE, it’s like gambling. In other words, if you go to the casino, you have the same chance to win or lose. The 5 % of winners simply doesn’t exist…never existed, and never will! I’ll give you a perfect analogy with the world of sport. Experts know that it’s impossible to develop big muscles or run 100 meters in less than 9 seconds without steroids. However, there are testimonials (the ones who are not caught at the doping test, which is a true farce) who swear that they did it. They are simply paid off to lie to the public, so the dream can continue.
    The market is the same. If you’re thinking of investing your real money, do it, but just for the fun and the excitement, NEVER hope that you’ll make any money out of it, if not out of pure luck.
    Good trades to everybody

  12. Ike says:

    In truth, the people who are complaining on here just don’t know how to trade properly. Why are you selling yourselves short and taking these losses? Of course the market is going to go down. If you actually followed it while trading, you can easily ensure that you make gains in the end. Buy low and sell high. It’s that simple. Obviously there will be some fluctuation in the market, but have a little patience for crying out loud, and stop thinking the market it a get-rich-quick scheme.

  13. dick hertz says:

    I am an experienced equities trader with more than 12 years of online trading. I have educated myself regarding FOREX. No expert here, but I probably know as much as the next guy with 11 months of FOREX trading under his belt. Here’s the point: After 1,455 trades over the course of 11 months, 89.9% of my trades have resulted in losses. All types of trades: from 2 minute scalps to trades lasting almost 10 months. I have used numerous technical analysis tools, many of which have proven helpful and profitable in my stock trading.
    Even if I flipped a coin before every trade, I’d probably be some where around 50% in terms of losses and profits. On a bad day of coin-flip trading, I would almost assuredly be right at least 1/3 of the time (33%). It is virtually impossible to be wrong almost 90% of the time – UNDER ANY CIRCUMSTANCES. There is NO mathematical model to support it. NONE. Even if I did the exact opposite of what I believe the charts suggest, I would still not be wrong 90% of the time. IT IS IMPOSSIBLE. Therefore, the ONLY logical explanation is that the FOREX market is fixed. How and to what extent, I don’t know. But there is simply no other explanation.

    • John says:

      Nice handle. Since the reported statistics to the CFTC show that about 30% of retail forex traders make money each quarter, clearly it’s not impossible. Thus, your logic is flawed from the start. And that assumes win % is the determining factor in profitability, which it isn’t.

  14. dick hertz says:

    LOL. Yeah, OK, let’s all believe what the government of the United Staes tells us. The Commodity Futures Trading Commission guys used to lunch with the SEC guys who conducted the Madoff audits for all those years, right? Wow, someone actually PAYS to write articles?

    • John says:

      I didn’t say reported by the CFTC. I said reported to. The brokers report the figures. Maybe you don’t want to trust them either. Fine. Whatever. I’m not going to get into a debate on that here. You are, however, a sample of one and your year’s worth of experience bouncing from method to method and time frame to time frame mean very little by way of proof. I’d say the same to someone claiming brilliance on the basis of one year’s great performance too.

  15. Robin Latrell says:

    Winning % is not the determining factor in profit?? Don’t tell me — you work for the Obama Administration, right? Up is down; debt is good; higher taxes mean greater revenue; some day, cars will run on farts. Don’t quit your day job. I hope it has nothing to do with finance. And if it does, let’s hope nobody listens.

    • John says:

      Seeing as I can demonstrate to you systems which have very high win % but very poor performance (and vice versa) – and you could probably think of some yourself – clearly win % is not the determining factor in profitability. It’s part of the equation to be sure, but not all of it. This is one of those things newbies fixate on, usually to their detriment.

  16. ken says:

    typical wall street crappola. dick hertz’s (great handle!) point is well taken. movement is ultimately up or down. u can’t be on the shitty side of a trade 89 times out of 100 with over 1000 trades executed without it being manipulated. winning % is not the determining factor? lol. ok, tell that to the red sox and the yankees. this moronic babble is why regular americans are totally fed up with wall street and the corrupt pirates doing the fleecing. lies, deception and then for a change a pace, more lies.

    • John says:

      You’re seriously comparing trading to baseball? Seriously? Talk about babble.

      Wins in baseball are binary. You either win or you don’t. Your run differential doesn’t matter. In trading that run differential most definitely matters. If you win 99 times out of a 100 and that 100th trade wipes out all the profits from the rest of the trades then it doesn’t make a damn bit of difference that you won 99% of the time, does it? Flipping that around, if you lose 70% of the time but the other 30% are big enough winners that you’re well in the green, does it matter one iota that you only had a 30% win rate?

      This is NOT me saying that the size of your winners is the determining factor. It’s me saying it’s a combination of win % and the relative sizes of your wins and losses that decide your performance.

  17. ken says:

    it’s still noteworthy that you’ve failed to address mr hertz’s principal contention –> nobody’s gonna be wrong 89% of the time. i’m no math teacher, nor do i possess a graduate degree in finance. however, i do have a phd in LIFE, and my decades of living tell me nobody (smart, dumb, expert or newbie) is getting snookered 89 times out of a 100 without someone else pulling strings. period.

    • John says:

      You apparently weren’t paying attention when I said a sample of one individual who has admitted to using all different kinds of time frames and trading styles over a year’s time is insufficient evidence of anything – good, bad, or otherwise – no matter how many trades. Of course, if he’s been trading with some no name, unregulated broker then I might allow for potential shenanigans. Otherwise, show me evidence that the employed methodology should have been profitable.

      Of course the real question is why someone wouldn’t stop trading (at least live) after say the first hundred or so trades when the win % was so low.

  18. aarons_mailbox says:

    Here is my input for what its worth. I have 8+ years of
    experience, with the last 4 years traded full time, devoting up to 10+ hours a
    day to direct market participation. I am an educated (fool), mature adult with
    a degree in mathematics from a Russell Group university and more than a decadeof programming experience, and i consider myself to be
    “sophisticated” (or stupid) enough to be involved in OTC markets. I
    have traded every possible combination of technical analysis, timeframe,
    fundamentals, with many brokers, ECN’s, MM’s and spread bet platforms, manually and with automation. I have put the best and most (un) productive years of my life into beating the FX markets. To cut a long story short, i have been around the block at least once and have the hairline to prove it.

    When considering the FX market and the potential for
    manipulation, a “white lie” PR sound bite often used to muddy the
    waters is that the FX markets are just too large to manipulate, with ~$4 bln
    traded every day. Sounds HUGE right? But as with any confidence trick, its a
    thing of scale; when you break that amount down into all the different markets,
    and break down the day into hours, minutes and seconds it turns out that only
    ~$2mil per second of flow is required to move the most liquid pair, EUR/USD, at
    the busiest times – and for the less liquid pairs the sums required to move a
    market are pitiful. What is a 2mil lot worth to a MM? Well, many retail traders
    trade with 1 mil lots using leverage… so the answer is, that to a MM, it’s
    not worth a lot.

    The stone cold truth is that if you place stops near the
    market they will be hit the overwhelming majority of times, and yes, they are
    specifically targeted, and yes, its easy to do…just ask anyone with market
    making experience. And more to the point, if the MM was not legally allowed to
    do it, they would go out of business in a month. As a retail investor, your
    soul purpose as a short-term participant in the OTC market is to feed the MM’s
    book so they can lay off the prices at a future date, in layman’s terms – you
    are the fool at the table. This function is not of the (misunderstood) kind
    where you place a trade and a institution or another investor takes the other
    side immediately, and its everyman for himself from that point… your function
    is that you implicitly expand the MM’s profit margin so they can take the
    bigger hits in the future from professionals who they are obliged to cater for.
    This can happen over minutes, days or weeks. Having a “neutral book”
    is a misunderstood and an outrageously subjective concept; a MM can move a
    market some distance and still remain completely neutral within the constraints
    of their business model.

    YOU provide “liquidity” to the market by putting
    it in the MM’s P&L margin, not by putting it in the spot market…99% of
    retail flows don’t get anywhere near the spot market, the real business is done
    on private platforms between extremely privileged institutional traders who
    “talk to each other”. That’s why you are offered and encouraged to
    use leverage (in most cases the option of trading without leverage does not
    even exist! Why would it, that defeats the purpose!, the ordinary sums in your
    bank account just wouldnt do the job sufficiently). Here is the long and short of
    it; it’s not in the interests of central banks that market makers and liquidity
    providers should face difficulties, especially not from retail investors.
    Hence, they have all kinds of distinct privileges awarded to them to skew each
    and every outcome in their favour, this includes being allowed to move the
    market…and ripping off Mr retail is their bread and butter. Ask your market maker to show you the contract they entered with the central bank and regulatory bodies of their given jurisdictions.

    Also, don’t be fooled by the smokescreen of anonymity
    offered through ECN’s either. If you dig deep into the legal, you will see that
    all ECN’ providers have a clause that lets them share “any individuals
    data” with their liquidity providers. Just think about that for a second.
    Here is a word-for-word snapshot of the legal from a Swiss broker;

    “Dukascopy Europe is entitled to transfer all personal
    data of the client, transaction records and all other information submitted by
    the client or otherwise obtained during the course of the business
    relationship, to its affiliates or counterparties, in order to facilitate the
    consumption of, and to discharge its obligations under this
    agreement.” So, im no lawyer, but
    i think we can all agree here that the premise of anonymity is a bit of a joke…
    that’s why this particular company, though Swiss, is legally based in Latvia
    where trade description requirements are easily skirted.

    The whole industry; analysts, technical analysts, brokers,
    gurus, commentators, journalists, software developers etc…unwittingly It all feeds off convincing people they too can have a comfortable life as an FX trader.

    to live as an independent FX trader is probably by far the stupidest thing an
    individual could consider, it borders on suicide…something many of us consider
    frequently. Scratch the surface enough, and you will find a lot of
    troubled individuals, who have been wrecked by a period of foolish desire to
    get something for nothing. Only to find they get a lot of nothing for just
    about everything they could give. Beware folks, trading can destroy you, turn
    you into a bitter and joyless individual and teach you a very cruel
    lesson…those with the money intend on keeping it, and yours. Don’t say you
    haven’t been warned, the biggest mistake of my life was assuming I was smart
    enough for the job, when smarts really didn’t matter. The day trading(scalps,
    swings, noise) game is rigged.

    • John Forman says:

      Aaron – You make a very good point on the illusion of the $4trln of daily volume, particularly since spot trading, which is the main driver of exchange rates, accounts for half or less of that total. I would push back on a couple of things, though.

      First, you mentioned $2mln/minute to move EUR/USD, but it must be clear that such volume must be sustained to make the market move. As soon as the order flow stops, the market is likely to begin reverting. We see that happen quite often when clusters of orders are hit (stop running, etc.) where the market moves rapidly in a short span, but once the orders are cleared it moves back again. In other words, manipulation is possible in the short-term, but much harder to accomplish without considerable risk beyond that (it’s the same way in all markets).

      Second, I think it’s a real stretch to say there are “many retail traders” trading $1mln lots, and certainly they aren’t doing so at $2mln/second. Not that it matters if you’re correct about 99% of retail volume not reaching the interbank market. I’m not entirely sure that’s 99% is the case because of the way many brokers do a pass through to/from liquidity providers, which are basically interbank dealers, but I do agree that retail has a relatively small impact on exchange rates overall.

      We should make it clear, though, that when you say Market Maker (MM), you are talking about the interbank market MMs, not retail brokers. The latter mainly just pass prices through. It’s the former that are the primary price makers. They are the one running stops. It’s being done at the interbank level, which naturally trickles down to the retail realm. But per your statement above about retail volume not reaching the interbank market, your comment that retail traders “feed the MM’s book” is contradictory.

      Yes, in the grand scheme of things the retail trader is the fool at the table (at least the majority of them), but from the interbank perspective they aren’t the fools from whom the money is being made. They just aren’t doing enough of the volume. From a MM’s perspective, since they have access to information about flows, it could be said everyone else is the fool, but I have to imagine they look at hedgers and multi-nationals, who are strictly acting in a business rather than speculative context, as the real golden geese.

      That said, it’s hard to disagree about how the whole industry works to pull people in with dreams of easy riches. And as someone who has stated for the record that he does not trade full-time for a living and has zero interest in ever doing so, I will naturally concur that it’s something silly to even contemplate. :-)

      • Ntry says:

        What kind of response is this? A halfhearted spin attempt to support your story interlaced with an agreement that the FX market is designed to trigger stops at the expense of retail traders?

        The following is posted from your article:
        For traders in the futures pits are supposedly notorious for that kind
        of action. Here’s the thing, though. The markets and market makers exist
        to facilitate transaction flow and make their money from it. They are
        going to do whatever makes sense to increase that flow. That
        periodically could include running stops.

        In one fail swoop you imply that it is “supposed” meaning unfounded, and then agree, that yes, MMs will indeed run stops.

        Face it, this posted comment pinpointed who’s interest the MM is working in, and to say it is in the interest of the MM alone is a flat out lie and YOU know it.

        And to Aaron’s Mailbox thank you very much for your very well written response. It’s one of the best things I’ve read on the internet in awhile. It’s a shame it appeared in the comments section of this article.

        • John Forman says:

          Ntry – I have no idea what you’re going on about. At no point have I said anything like the forex market exists to trigger the stops of retail traders. Since the FX market long pre-dated retail participation, that’s about the most foolish idea out there. The retail markets does extremely well lining the pockets of the brokers and market makers without even bringing the stop question in at all. All they have to do is scoop up the spreads and maybe sit on the other side of the net retail flow and they’ll do quite well for themselves.

          My point about the MMs running stops is that they are doing it at the inter-bank level where the real volume is happening. Retail traders are basically just collateral damage.

  19. Goat-rider says:

    It’s a FreeMasons game based on the 7-sins made by the 1%,we can crack this bankers fraud.

  20. Janna says:

    Hey John- Wondering what your view of the current trading platforms being 100% simulated – programed to react to your every action- not only preventing people from making profit- but programmed to take their entire account.I discovered that the NFA enabled the industry to use false advertising – as their product was transferred from real trading to simulated gaming platforms that process everything like a game. They did it by changing the entire definition of the term Forex Trading (and FOREX, FX) from “On-Exchange” to “Off-Exchange” which was totally illegal. I’ve been trying to tell everyone and get something done about it but its hard because all the regulators seem to be participating in it. I’ve been totally alone fighting this and would like someone to talk with about this topic- share what I found. I’m not advertising my site- but please visit it so you can see what I’ve found. I have nothing to gain with what I do- other then a mild desire to restore a little respect to my family. We caused the 1907 financial scare.(Augustus,Otto and my grandmothers dad Arthur Heinze) I was a trading prodigy till the platforms started running anti-profit programs. On 8 different PFG 50k test accounts I cleared 2 million in 2 days (proving to a friend it wasn’t just luck) the 8th account I continued for 4 days – crashing their server trying to close 17 million for a total of 27 million in 4 days. Now- I cant profit more than about 5k a week. My skill didnt change- the platforms became rigged. How do we put a stop to it?


  21. chris says:

    firstly a demo account is no way the same as live, Forex trading is 10% skill and 90% emotion! you don’t have emotion on a demo account because its not your money! when your using your own money you worry and make mistakes, if they traded against you or not it does not matter its your fault! greed,fear is why most fail, forget ea’s they don’t work! bottom line study hard and only risk a maximum of 2% a trade, also get someone who does know to learn from! i like Neil fuller i think he’s name is try Google it, he’s site is full of amazing info.

    • Currency Pirate says:

      I have been trading FOREX for 5 years now. It took me the first 4 years just to figure out whether I was coming or going. I spent countless hours of my days studying the market movement in relation to the vast array of indicators that are out there. I was able to narrow down my approach with a trading model that finally offered me a much higher win ratio. I continued to fine tune this model and got rid of the indicators that simply served no purpose. While I have lost my shirt many years in this market, I am responsible enough to know that it was due to my own mistakes. I made the same mistakes repeatedly and watched my demise as if it were deja vue. When I first started trading I didn’t have a lot of capital to work with. My trades pretty much had to be perfect or bust. My common errors were over-leveraging my trades resulting in margin calls. Instead of waiting for my technicals to fully mature, I would jump the gun and experience unnecessary draw downs. If these draw downs didn’t engage my stop loss, I ended up waiting weeks sometime just for my trade to reach break even. I have never felt that my broker (FXCM) is scamming me or gunning my stops. Most people do not educate themselves in this industry in a manner that gives them a fighting chance. While you can take all of the courses on forex you want, most of the formal training in my opinion simply does not apply to each individual. With lagging indicators and so many trainers out there telling you their way is the way to success, I think this is what causes so much of the confusion and perception that a scam is afoot. I had to combine the formal training with a mix of common sense, a sprinkle of unorthodox and a dash of invention to make a reliable model that works for me. If you find yourself experiencing a majority of failing trades, you just need to realize that your approach is not working and you must change it immediately. If you continue to fail after that, you will have to accept that THIS IS JUST NOT FOR EVERYONE!!

  22. sam says:

    just look at all these EA mq4 indicators and scripts, they are all other the web ! The Forex mafia is paying these developpers and bloggers to give guilible new comers to believe that they can outbeat the Chaos ! The only way to make money on Forex retail trading is to join the Dark side of the force !

  23. Seth Wudel says:

    Ive been trading forex for about five months now, and watched hours of Steve Niso seminars and others videos feeling confident that I had the knowledge to know how to go about trading. After losing my money this last time, it all became clear. I put all the math together. Wont be able to lay it all out here,.but in short, forex trade is nothing but a sophisticated casino. You can learn all the techniques and strategies you want but it doesnt matter. Every scenario has a fifty percent opposite scenario. Its just bulls vs bears. Its a very brilliant scam because there are so many ways you THINK you can win. Take trends. Seems simple enough. Wait for the topa andwave in a down trend and go short. Or vise versa. But you dont know that wave is come down til afyer it does. Even if a trend has ten waves you dont know that til it happens and there are as many scenarios 1 wave 2 waves that you stilll are 50 50 when u take a position. Ypu can break support or resistance and it could snap back. and go the other way…or snap back and come down or any number of scenarios. You will always see tonnes of scenarios where technical analysis holds true but only in hindsight and where it doesnt work is overlooked. You never know your mistakes til you make them and u cant learn from them because the next scenario will go the other way. Even with fundamental analysis…..cant explain it all now but the net reult is 50 50….and since you pay the spreads its like a house edge that makes it no different than a casino….all the math came to me at once….then i looked up forex fraud on wikipedia and it backed up everything i finally came to understand. Its sneaky and more sophisticated than a casino but just as losing of a bet if not more.

    • Seth Wudel says:

      And as for reversal signals like hammers, shooting stars, bearish and bulish engulfings….thet cause you to enter against the trend….so do u go with the 1-2-3-4-10 and so on wave trends as many try to coax u with or go for reversals? As i say, 50 50

      • Seth Wudel says:

        Theres more to explain. As i say, its too complex to lay it all out here….but in short… looks winnable but isnt….thats the danger of it

        • Seth Wudel says:

          You can certainly look at charts and see lots of occasions where a long rally will follow a hammer but add up all the scenarios where it didnt to the scenarios where it rallied some but didnt reach a desired target and flip flopped while before coming down. Add it all up. Its a lot like sitting at a black jack table watching your chips go up down up down up more down more bet more lose more bet less win less up more down more til its all gone.

          • Seth Wudel says:

            You have to win just to make the spread and no one one wants to stop at break even. Easier to go down that up. Its pure casino.

  24. westonmare says:

    Forex its the biggest scam of the century ;

    how its done ? easy; imagine 1000 shop trader who share one elaborate software and one central super powered computer , they are all linked to each other. They can very fast asses any market info.

    Now me or you issue a dealing ticket , what they do straight away estabilish if you are a beginner a new member of their family ! if yes they let you win a bit a few times, but not much, then when they know you are hocked they change the switch and take you to the cleaner .

    They are regulated by crooks .

    The worst on the market to use the city index , keep away, on 100 trade tickets on long position 97% went down in price. it obvious they run against people like me and you.

    I had an open position for almost 3 month, I then closed, as soon I closed, the price went up, I then bought

  25. Freerider73 says:

    The issue I had learning was that when I put stops in the price would never be met and it would wipe out my demo account and just carry on going. I understand that if no one is buying at the price it’ll pick the nearest etc. So I’m assuming that if the stop never got hit then no one was even close? So on a demo account I was making profit and then the entire 50k went on a single tiny trade overnight just for the sake of one stop. Why would you risk real money on a mechanism like that?

  26. Gina Johnson says:

    I dont think so. Just because you cant earn money doesnt mean it is a scam and nobody can 😀

    • Paul says:

      I agree now, after finally making some interesting profits with XM. I have a long history of losses but although i STILL believe the broker ALWAYS hedges their positions directly AGAINST their cash cow clients, this does NOT mean you CAN NOT make profits in forex. Even with Pus500 which i consider a totally scammy broker, who clearly trade (as it is STATED in their Client Agreement) DIRECTLY AND ALWAYS AGAINST THE CLIENT (through immediate and 100% hedging and controlling the price of both the BUY and SELL on ALL positions and tickers traded on their platform), i made some astounding profits ($5000 in one month, for example). Now with another broker who allows hedging, i have been able to double and even quintuple small accounts within a month and do even more. So, after THOUSANDS of hours of trading BADLY, i am beginning to become hopeful that there is a STRONG POSSIBILITY that one can generate ACTIVE forex trading income (i still spend about 14 hours a day trading but sometimes only 4 or 5 …with a LOT of breaks!) even with deceitful and even fraudulent brokers. It all comes down to extreme rigidity in money management, knowing how to read indicators and use price movements to your advantage; and copious helpings of God’s grace.

  27. Faye Barker says:

    Forex is actually not swindling. As Forex trading rises in popularity, Forex trading frauds are becoming more common. Beginning Forex traders are often considered an easy target for these Forex scammers because the Forex market is not regulated.

  28. Al says:

    Forex = four “X” = 4X = X X X X

    MT4 = MetAPHORE

    Trader sounds very much like “TRAITOR”

  29. i was just ripped off by xm mi ea is so plain simple it was obvius sombody had there hands the account

    • Paul says:

      Hi phillippe, i have traded with XM for about 2.5 years. I find it almost impossible to retain profit through their MT4 platform. I sympathise with what you are saying; but i think it comes down to this: first, XM is run by ‘ex’ bankers. You think they want you to keep any money you put in an XM account? Second, all Metatrader accounts are controlled through servers in Russia. Where do you think metaquotes and MQL4,5 come from? So often, i have felt certain that the ‘investor password’ function was set on metatrader for ONE reason only: to allow ‘account managers’ at Metatrader brokers to monitor your actual screen and to manipulate your account and its positions. Why else have such a function? So often, i have made a trade with the trend; but as soon as i place the order, the trend reverses. I have been trading fx for about seven years; and it has been a massive loss for me, mainly due to the collapse in the Euro and my failure to properly manage the account balance once i bought and the Euro collapsed. At the time, i did not know much about hedging. The problem is, even if you hedge, the broker just continually reverses your positions until, eventually, you are either marginned or stopped out. I am almost convinced now that XM, and ALL Metatrader brokers, also Plus500 and FXCM (whom i had accounts with) are actually trading, or rather, hedging against their client accounts. It only makes sense, since they are acting as Principal. As human beings, we need to learn to look out for one another, and stop trading forex altogether. There is no hope for us to live a worthwhile and meaningful life otherwise. Retail traders are the food of the vermin bankster scum. Don’t believe the lies your XM broker tells you; and the same applies to IQOption. Binary trading is just another forex fraud.

  30. figo says:

    Forex is indeed a scam! Beware

  31. Shunmas says:

    I have made losses of circa 135000 USD, starting from Dec 2012 until recently Aug 2015.

    I have only withdraw a meager profit of 2000 USD and that was made on some Friday on EURUSD. I had a capital of 250 USD only.

    I accept my mistakes, over-leveraging my trades, having over-confidence in myself, long waiting for trades to break-even. Also, most importantly, out of 100 trades, 90 trades were without stop losses.

    I do believe that I was wrong on many fronts. But at the same time, I firmly believe that there is a dark force on the other side, who will not let me make much profit and will manipulate the rates for their own profit.

    • Paul says:

      Hi Shunmas,

      Thank you for the reply. Are you talking real money here? those are large losses, especially if you are not wealthy. I myself lost about the same amount in shares and forex combined; most of it in the dot bomb crash in 2001 but also about 1/2 in forex between 2004 and today. The good news is, in spite of believing that the bankers and the wicked trade directly against retail clients (which they certainly DO), i have been seeing some success in trading.

      In the past 2 months i was able to accomplish the following:
      1) Finally understanding a LOT more about viable indicators and trading patterns (i have tried several methods now since the beginning of the year), and learning how to apply them;
      2) Finally apply disciplined money management;
      3) Finally avoid overleveraging;
      4) Finally avoid repeatedly emotionally trading and blowing up the account;
      5) Avoiding margin calls through adding funds where absolutely necessary and buying time to reverse trades where i had entered incorrectly;
      6) Avoiding constantly buying into a selling trend and vice versa (this should be #1!)
      7) Listening to my wife (a Finance Manager) and withdrawing profits immediately, before going back in.

      Through the above processes, after deciding to call it quits with Forex after seven years, i managed to start making some interesting profits:

      1. Turned 100 Euros into 890 Euros within 6 weeks
      2. Turned 164 Euros into about 570 Euros within a month

      Unfortunately, i did not maintain the discipline long enough, and again went against the trends, selling the USD and buying the Euro when the trends were the reverse (it is very difficult to read the trends properly and takes a great deal of practice). So, i did not retain all of the profits:

      1) lost most of the 890 Euros and had 64 Euros left.
      2) Placed that 64 Euros back in and added 100 Euros.
      3) Pushed the account back up to 570 Euros and then
      4) Began to lose the account. Cleared the account at approximately
      1070 Euros and retained 890 Euros of that (170 Euros credit). After deducting the 500 Euros i topped up when it was obvious prices would continue to go against me and margin me out, the net profit on the account was 395 Euros. This is not great for 4 weeks’ work but it is still a good result!

      I am currently using a very small account (200 Euros) and learning again how to read the indicators and maintaining discipline.

      I use the following free indicators:

      1. Semaphore;
      2. FCAL (Financial News);
      3. Bollinger Bands;
      4. Volume;
      5. P4LClock;
      6. Sonic (6 indicators altogether and some templates);
      7. Demo frontrunning when absolutely necessary.

      I did not achieve success by myself; it is first, God’s grace and second, the advice and feedback of several people i happened to read articles from, over the last six months: their advice has been absolutely critical to the reversal in my fortunes.

      I am not wealthy and have worked all my life; my money lost to liars and thieves in the equities markets and to unscrupulous companies like Pus500 is very large and represents decades of work and literally thousands of hours of my life. However, if i can recover these monies or even begin to make a sustainable, modest passive income based on fairly basic strategies, then i will be pleased with the outcome!

      I am considering training people in forex and have set up a website here in Singapore to do so. But i need to become much better at this than i am and don’t know if i will be able to actually do this (for most of my life i have been a Technical Writer but i am now fairly obsolete).

      If you find the above details helpful, i do hope you will not give up hope and i encourage you to use VERY small accounts and seek to double and triple them before withdrawing profits and going back in. With good strategies and disciplined money management, it is possible to take money from forex brokers (not binary options though; that is a fool’s errand!).



  32. TONY says:

    Forex and spread betting is a SCAM !! …Ive only just realised after losing my life on it, it is almost impossible to win I have been doing it for 10years everytime i lost I thought it was my fault but I realised it does not matter if you go long or short the will go the other way and wipe you out !! ….I use to think it can not be a scam because this sort of behaviour should not be allowed its CHEATING !!! Where are all the regulators ??? like the FSA and so and so ….these brokers and MM are robbing people in broad daylight !! and legally aswell this is really bad it has destroyed my life !!!

    • ryan says:

      Hey, Tony,
      im really sorry to hear this!!! MORE PEOPLE NEED TO BE LIKE YOU THOUGH AND COME OUT! I have lost a huge amount also and don’t even want to go on. Such a scam this Forex is. Can you tell more about your experience?

      • Paul says:

        Please see my comment above. I have found methods now by the grace of God that allow me to make a very good profit. Forex is not a scam; but it requires the use of specific tools, skills, methodologies and patience. Since i tend to be stubborn, it took me seven years of trading (often, up to fourteen hours a day) to find that you can, indeed, make money trading with MT4. Even with Plus500!

  33. Maximilian says:

    For me, Forex trading is not a scam if you know what you do and where to go. For me personally I used to trade with FXCM but then a friend of mine told me that he came across a platform named VertexFX trader which have many features that I as a trader will benefit from.

    I used a demo account and I loved it and so I had to switch broker for the fact that they don’t provide VertexFX but they told me that they will provide it soon because it saved me hundreds of dollars for features I had to pay for in MT4.

    There will be no chance for a fraud because the software I’m using is very transparent so there will be no way my broker can play with anything.

  34. Sam C says:

    So I traded with a few different FX brokers back in the early 2000, FXCM, and others. After watching their charts and seeing the bullshit and my best day was making 5K in the AM, I realized trading the CME was a much more even playing field, at that time they didn’t have such active FX futures liquidity but it got better fast. At least nobody is screwing you on the charts and placing trades. Yes you pay a commision for a trade but that is nothing compared to the pips the FX banks make on the spreads. The downside is the leverage is much less but that might not be so bad. I used Open E Cry to trade the CME FX futures and other futures. They are at least honest. I never understood all the talk about the liquidity of the FX markets compared to the CME. I never had a problem getting fills at the CME except during really slow times like when the US market was over and the Asian market hadn’t started.

    The FX brokers are always trading against you. As far as the ECNs I am not familiar with them, I heard of them and they sound reasonable but I am skeptical that they are as pure as is said. If so great, why would anybody trade with the other guys?? Is Oanda a ECN?

    John, A system and discipline is crucial as any trader knows, it is difficult with real money but doable. The only reason I can see why one would choose to trade on a FX account is because of ignorance of the CME markets, because of the high leverage from the FX guys or because that’s what someone taught them. Cheers from an ex trader.

  35. Nelson says:

    After reading all allegations two questions come to mind:
    1) Nobody will open a business to gift you money. So, why so many forex brokers pops all day?. Why the retail forextrading was created? To “help people”? I don’t think so
    2) I we believe there are just 5% or less people profiting from forex, they have probably more capital, resouces and mos importantly INFORMATION that the rest of retail traders don’t have

  36. ante says:

    this looks like an idiot convention, if your IQ is above room temperature, disregard this idiots and their idiotic comments..seriously, I can’t believe such a thread exists..if you can’t make money on forex, that’s ok, most people can’t..on the other hand, I can’t lose money, of the last 150 trades I had only one loser which I closed at a loss of 20 pips, and made approx 30 000 pips on my other trades..yeah, this month..let me say it again, these guys posting here are idiots!!!!!! Just check what they are saying..hahahaha..LOL

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