So what are Forex scams? Some people jump to the conclusion that anything that doesn’t make them thousands of dollars overnight is a scam. They do not want to have to spend any time learning and developing skills – they want something that works like magic, without putting in any effort at all.
That’s clearly crazy. If such a thing existed, everybody would be using it … and when you think about the economics, even if something like that was invented, it wouldn’t be effective for very long. Some robots do work, but they are always secondary to good value manual trading which lasts a lifetime.
The fact is that the money you make has to come from somewhere and from someone. Technology can improve our methods of producing goods so that everybody’s standard of living improves and everybody becomes richer in real terms. However, when you are trading, gambling or doing anything else that involves ‘pure money’ without any goods or services being produced, then for one person to gain, another person or institution has to lose. It’s a zero sum game.
It is true that in currency exchange, some of the bad prices are taken by people or institutions who either do not know or do not care. Businesses who import or export goods rarely bother to try to schedule their payments for a moment when the currency rates are favorable. People taking a vacation overseas are the same. Nevertheless, there are so many people and institutions in the ‘pure’ forex market these days that it is simply not possible for everybody to make money from forex trading. In fact, most of the people lose while the few rake in the profits.
So when you are trying to decide whether negative comments you see about a certain Forex produtct that you read about are really a sign of a scam, it is useful to picture the situation happening in the real world, i.e. offline.
Imagine you bought a book about forex from a bookstore, but the system described in it did not work for you. It might be that the methods in the book were out of date, or they might not be suitable for you for some reason. You would probably have learnt something, and you would just shrug and accept that wasn’t the right system for you. You wouldn’t go back into town and call the bookstore owner a scammer.
But if the bookstore was inviting everybody to pre-order a great new book on forex that was about to be published, and you and 1000 other people all handed over your cash, and the next day the store was closed and the owner had left town … that is a scam.
A scam, according to the dictionary, is ‘a fraudulent business scheme; a swindle’. A scam involves fraud and an intention to deceive. Scams are illegal. It is not correct to use this word to describe something offered and delivered in good faith, even if it doesn’t work for you.
People are very suspicious of buying online and you will often see the word ‘scam’ thrown around without much justification. Usually it is just a case of a frustrated customer trying to blame the product for his inability to be successful with it, or it might be something that worked at one time but is out of date or has been over-used. You wouldn’t want to buy it except for historical interest but it wouldn’t be right to call these systems forex scams.
