BEWARE! Forex Trading isn’t a Get-Rich-Quick Scheme

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Forex (Foreign Exchange or FX) trading is the conversion of one currency to another. It is one of the most actively traded markets in the world, with a daily inflow of over $5.1 trillion. The amount of currency converted every day is what makes some currencies extremely volatile. Therefore, it is this volatility that can make forex so attractive to traders; bringing about a greater chance of high profits, while also increasing the risk to the players.

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Although, Forex trading is accessible, it isn’t a get-rich-quick scheme.

By Adegoke Muideen

A Proper and Sound Forex education is as important to beginners as it is to experts because Forex software and tools are constantly evolving and because of the risk involved (probability), it is important to have a sound grasp of the fundamental, sentiment and technical analyses.

Moreover, having a sound trading education, a stable psychology, a properly funded trading account and an understanding of risk management techniques are essential, which turns out to be the most basic requirements. Hence, the EFX community has decided to introduce people to the world of currency trading, and provide educational content to help them learn how to become profitable traders. We realise this is the only guide towards combating the bastadisation of wolf of Forex by scammers.

Is Forex a scam?
No, Forex is not a scam.
Forex market is a global market domain for exchanging currencies by cross national countries against one another. The forex markets are the largest in the world in terms of daily inflow as highlighted above hence, the most liquidity.

Market participants are the ones who use forex to hedge against international currency and interest rate risk, for speculating on geopolitical events, and to also diversify portfolios among several other reasons. That’s by the way.

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However, due to the high risk which enables traders to earn high profit, scammers have resorted to “Forex scams.”

Forex scam is a trading scheme used to defraud unsuspecting investors of their money by convincing the investors that they can earn high profit if they allow them (defrauders) trade for them. Forex Scam will be around for as long as the Forex market exists; so, it can only be delimited through sensitization, and provision of platforms for imparting the knowledge to those who would like to partake in it.

Although, the forex market may seem lucrative, tempting and alluring, trading without proper knowledge can spell doom for the novice. The huge profit is what makes people greedy, too good to believe promises, hence, bringing in new and more scammers to the market.

Unfortunately, these unscrupulous scammers tend to target beginners or uneducated traders by offering them high returns in percentage for their capital. Some go as far as paying their members weekly for a start to attract them, (smiles).

How do you deposit money with a broker, trade, earn profits, withdraw and disburse in a week? There are just five days of trading activities in a week. The best way to avoid being a victim and getting scammed is by getting a proper education, practice over time, before you enter the market with your hard-earned money.

Further on the Impacts of the US Elections on Forex
The United States definitely has a great impact on the Forex market because the USD is the largest traded currency in the world followed by euro, Japanese yen, Swiss franc, Canadian dollar and so on. It has multiple currency pairs in the market being traded against each other every day. It is obvious that the US Stocks are falling and volatility is increasing.

Some articles say, the market is falling because, investors are hedging against Joe Biden’s victory. Joe Biden has a tax plan that calls for a board tax hike on income, capital gain taxes while Donald Trump offers a long-term capital gain.

Breaking it down for the layman, it is a simple mathematics. Investors who have made money under Trump’s tax cuts will want to sell their stocks or might have sold their stocks, if Biden wins, they pay taxes at 20% rate and if Trump wins, they still have their cash. Investors have great influence on Forex market and hence, why we see stocks falling during the election period. If Trump wins, these investors will buy back those shares/stocks, therefore, a Trump’s victory will cause a market bump.

Notably, the stock and foreign exchange market were seriously dealt with by the global pandemic (COVID-19). Market hasn’t been settled before elections event began as well, resulting in high volatility in the markets, the highest ever to be witnessed. To some, it has been a blessing while a blow to many others. Donald Trump’s influence has been a huge one for the market since 2016 instilling by his constant use of social media especially twitter.

He’s very influential with more than 80 million followers across the world. He’s the first ever president to have used twitter the most, followed by his immediate predecessor – Barack Obama. As a capitalist, he contributed so much in the stock market than any other American president. Cumulatively, a change in government means another expectation for crypto and Forex traders on their charts which is going to be another significant change for all price forecasters.

Eventually, Joe Biden, being the new president of the United States of America as elected, after surpassing the threshold of 270 electoral college votes required to clinch the presidency. Traders and investors widely view the change in regime as a primary underpinning for volatility in stocks, commodities and currencies. In his first statement, President elect Joe Biden declared it was “time to heal”. It’s not a doubt the world had waited for this time to come.

Another historic moment for the United States is its selection of a female as its vice president, first ever after 45 elections/taking overs. Kamala Harris, the vice president elect is quoted to have said, “While I may be the first ever woman in office, I will not be the last-because every little girl watching tonight sees that this is a country of possibilities”. Yes, indeed it happened. She became the first black and Asian American to occupy such position as well. This is good news for all blacks, jeering the world against racial discriminations and moulding the #blacklivesmatter campaign all over the world.

Forex traders rooted for President Joe Biden because of the belief that his administration, would bring back the phase where the market was normal.

Having Biden as president, we tend to see higher returns on American equities, creating more friendship ties among nations, provision for COVID-19 vaccines and more. All of these are a prospect that a significant positive US stock market performance under Biden and many other currency pairs may improve.

Adegoke Muideen Abayomi is the CEO of Elegance Flagx Commodity limited. He writes from Ilorin, Kwara state.