Discover How To Avoid Online Forex Scams

by David Jenyns on January 18, 2010

How the Magic Works: The Tricks that Make an Online Forex Fraud Work

Online Forex is very appealing to most fraudsters. Traders need to ensure that they are alert and aware against the risk of fraud, especially because the marketplace is full of opportunistic predators who will make use of the slightest slip of mind to steal as much. Let’s take a look at the psychological tools that make them successful, and help them fool prudent and otherwise intelligent traders.

1. Confidence

The fraudster is confident, and inspires confidence in his victims. When he makes a claim about massive profits in very short term trading, he will appear completely sure of himself and his beliefs. His confidence is not based on facts, but on his art. In fact, his confidence is his sole asset: very few people would believe the incredible “achievements” of fraudsters if they did not find their attitude inspirational and convincing.

Thus, the con-man is an artist of psychology, and

2. Urgency

Almost all forex frauds are somehow associated with the proposal that only those who act with lightning speed can get on board the train of profitability. In Ponzi schemes, actual returns do confirm this illusion, so sooner or later individuals are forced to recognize that time is of the essence in making use of the great offers made available to the public by the fraudster. This sense of urgency makes any meaningful examination of the fraudsters claims impractical, with predictable results.

3. Extravagance

The fraudster is confident, and he’s never modest. Since he often has little tangible assets to show to his customers (in education, or capital) he tries to compensate for his grave deficiencies by resorting to extreme and unbelievable pledges.

4. Style

Some fraudsters go to great lengths to give some air of credibility and legitimacy to their art by adopting the style of legitimate companies. They build attractive websites, even make use of sophisticated software to make clients believe that they are real firms.

5. Marketing

In many cases what the swindlers do is a lot less important than how they do it. What they are doing is of very little significance, since ultimately all that they do is limited to manipulating air and mist. But they are very good at marketing their offers and claims, and so after confidence, the second most important aspect of a fraudsters work is performed in the marketing department.

Forex scams are not completely avoidable. It is unfortunately the case that neither traders nor regulators are equipped with enough power to deal with the unlimited innovation of crooks. Although adopting the most common methods of protection against scams may help you in the long run against the most obvious kinds of criminals, your best defense against scams is diversification, and conservativeness in the commitment of capital. This, and the usual protective measures will ensure that your account is as safe as it can be hoped in the real market environment.

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