The best person to teach you about Forex and foreign currency exchange is someone who understands it well.
Watch the videos below to get a basic understanding of Forex and foreign currency exchange.
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The U.S. Commodity Futures Trading Commission (CFTC) announced today that it charged Marvin Cooper and his company Billion Coupons, Inc. (BCI), both of Honolulu, Hawaii, with operating a Ponzi scheme that involved more than 125 customers — all of whom are Deaf — in connection with commodity futures trading and foreign currency futures (forex) trading.
The CFTC alleges that since at least September 2007, Cooper and BCI solicited approximately $4.4 million from more than 125 Deaf American and Japanese individuals for the sole purported purpose of trading forex. Also, according to the complaint, while Cooper and BCI opened both forex and futures accounts with approximately $1.7 million of customer money, Cooper misappropriated more than $1.4 million of customer funds for personal use.
Cooper allegedly used the misappropriated funds to purchase computer and electronic equipment, flying lessons, and a $1 million home. He also allegedly returned approximately $1.6 million to customers as purported “profits” and as commissions to employees and agents.“This case is a clear example of affinity fraud: Cooper preyed upon the Deaf community to leverage and exploit the inherent trust within so that his scheme would prosper. The CFTC urges the public to be cautious with their investments even when opportunities are presented by those with whom they have an association,” said CFTC Acting Director of Enforcement Stephen J. Obie.
Cooper and BCI allegedly lured in customers with promises of 15 to 25 percent monthly returns, depending on the amount and size of the customer’s investment, while representing that the investment would be low risk and that the promised return was produced by their successful trading. Cooper and BCI, however, were running a Ponzi scheme since the purported “profits” paid to customers came from existing customers’ original principal and/or from money invested by subsequent customers.
Finally, the complaint alleges that to conceal and perpetuate their fraud, Cooper and BCI provided customers with false account statements representing that their accounts were increasing by as much as 25 percent, when, in fact, the accounts were collectively losing money every month.
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Are you ready to make millions trading in the Forex market? Well, you might want to hold up for a second.
Statistics show that more than 50% of Forex traders lose money in the foreign currency exchange market. And who do you think loses the most money? Brand-new traders who have no idea what they’re doing.
Forex trading isn’t like going to a casino. Although some people treat it like playing the lottery, it really isn't a game. Here’s a list of three things every new Forex trader should do.
1. Invest in Your Forex Education
This is the most important pointer on this entire list. If you are serious about succeeding in the Forex market, you need a good education.
There are seminars, workshops, and books you can learn from. Beware of free e-books that you can get online. A large amount of the information is just plain wrong.
You need to learn a bunch of technical stuff like how to use indicators to determine the right time to enter or exit the market, how to get started in the first place, where’s the best place to start, and so on.
It’s best to learn these things from a reliable source, such as a book that’s been written by a professional Forex trader and fact-checked by a reputable publishing company. Or in a class taught by someone whose background you can check and verify.
Two books I recommend are The Forex Trading Course and Getting Started in Currency Trading. These books are much more reliable than any free e-book you’ll find online. Believe me, I did a lot of research before starting this website, and free Forex e-books are usually full of bad information.
2. Learn Money Management
Money management is the ability to not lose all of your money in the market. You know how much money you can risk, and you never trade with money you can’t afford to lose.
It’s a good idea to keep your living expenses separate from the money you put into Forex. Also, you should never spend your life savings in the Forex market.
3. Trade with Discipline
Discipline is important. You should have a trading plan that you stick to no matter what. You should also avoid trading based on your emotions.
In poker this is called going “on tilt”. It basically means you make a bunch of bad decisions based on how you feel at the moment. This is a quick way to the poorhouse.
If you can follow these three steps, then you’re off to a good start.
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When looking for a Forex trading system, there are many specific factors you should bear in mind.
It is essential to ensure that a Forex system meets your standards, or it may not work very well or at all!
The top six most important things to look for include:1. Has it been tested? - It is important to make sure that the Forex system you are looking at has been tested and has proven results.
2. Is it easy to use? - You shouldn't have to be sitting in front of the computer day and night - that's why you're buying the system. Make sure it is easy to install and runs automatically.
3. Is it designed by professionals? - The system you're buying should be designed by experienced I.T. gurus and Forex experts. If it isn't, you may not get great support.
4. What do others say about it? - Does the product include any testimonials about the product? Even better, does it contain video or audio proof of people talking about the system?
5. What do the experts say about it? - Make sure you read plenty of reviews on the system on the system.
6. How does it trade? - Does it make short trades looking for small quick profit, or does it make longer trades, riskier trades?
As long as you keep these things in mind when looking around for a Forex system, you shouldn't run into many problems, and if you do, many systems offer a refund if you're not satisfied, so what's to lose?
This article was contributed by George Engelson
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The U.S. Commodity Futures Trading Commission (CFTC) filed a federal law suit on January 27, 2009 against Nicholas Cosmo of Lake Grove, New York, Agape World, Inc., (Agape World), and Agape Merchant Advance LLC (Agape Advance), both of Hauppauge, New York (collectively, defendants), charging them with defrauding customers of tens of millions of dollars.
In conjunction with the filing of the complaint today in the United States District Court for the Eastern District of New York, the CFTC is seeking a statutory restraining order freezing assets and preserving records.
In its enforcement action, the CFTC alleges that defendants solicited tens of millions of dollars from customers for the stated purpose of investing in bridge loans and merchant advances.
Defendants then misappropriated a significant portion of those funds to engage in unauthorized commodity futures trading. Defendants’ unauthorized commodity futures trading resulted in tens of millions of dollars in losses, none of which were ever disclosed to investors.
Stephen J. Obie, Acting Director of the Division of Enforcement commented: “Defendants here swindled tens of millions of dollars from unsuspecting customers through phony profitability promises, while, in actuality, losing millions speculating in commodity futures trading.
These schemes are so insidious because they undermine investors’ confidence to invest in legitimate enterprises. Investors must exercise caution with investments that sound too good to be true; by the time enforcement authorities get involved, swindled funds may be gone.”
Cosmo’s Criminal History Includes a Federal Conviction for Mail Fraud
In 1999, Cosmo, then a licensed stock broker and account executive, pleaded guilty to mail fraud after admitting to commingling funds, purposely misleading investors, and forging documents. Cosmo was sentenced to a 21-month prison term followed by three years of supervised release and payment of restitution.
The CFTC’s complaint seeks civil monetary penalties, disgorgement of ill-gotten gains, restitution to defrauded customers, and injunctive relief, among other sanctions.
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The Commodity Futures Trading Commission (CFTC) has formed a special task force charged with investigating and litigating fraud in the Forex market.
The creation of the task force within the Division of Enforcement comes in the wake of Congress’ passage in June 2008 of “The Food, Conservation, and Energy Act of 2008” that clarified and strengthened the CFTC’s jurisdiction over this market. The task force will focus on fraud in the retail forex market and will work cooperatively with other federal and state regulatory and criminal authorities.“The formation of the CFTC’s new Forex Enforcement Task Force reaffirms our agency’s commitment to stopping unscrupulous individuals working in this space. Not only do forex fraudsters prey upon unsuspecting citizens, but their illegal activities taint the reputations of those working honestly in the futures industry,” said CFTC Commissioner Michael Dunn, head of the agency’s Forex Education and Outreach Task Force.
“This announcement sends a clear signal that the CFTC is on the beat, and that our continued and increased cooperation with law enforcement authorities will help put these forex dealers where they belong – in jail.”
“Forex fraud impacts investors of all stripes,” CFTC Acting Director of Enforcement Stephen J. Obie said. “With the creation of the retail forex task force, the CFTC has committed the resources necessary to expand its efforts to identify and prosecute those who commit fraud in the retail forex market.”
Since enactment of the Commodity Futures Modernization Act in 2000, the CFTC has filed nearly 100 enforcement actions against firms and individuals selling illegal forex futures and option contracts. To date, the CFTC has obtained judgments in these enforcement actions for civil monetary penalties of approximately $560 million and restitution of investor losses totaling $450 million.
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The U.S. Commodity Futures Trading Commission (CFTC) announced today that it charged James Ossie of Atlanta, Georgia, and his company CRE Capital Corporation (CRE) of Alpharetta, Georgia with operating a Ponzi scheme involving more than 100 people and approximately $25 million in connection with foreign currency transactions (forex).
According to the CFTC’s complaint, Ossie and CRE promised pool participants that they would earn a 10 percent return on their money within 30 days by trading United States and Japanese currency pairs.
The complaint further alleges that since June 18, 2008, rather than making money for pool participants, Ossie and CRE lost approximately $4.4 million trading forex. Finally, the complaint alleges that Ossie and CRE operated a Ponzi scheme, in which forex trading “profits” were actually paid from the principal of subsequent pool participants.“Investors must run the other way when approached by anyone claiming to guarantee exorbitant monthly returns, like those promised by CRE and Ossie. Such representations should raise an immediate red flag that such investment is too good to be true,” said CFTC Acting Director of Enforcement Stephen J. Obie.
“We are seeing an uptick in Ponzi scheme cases because, in this economic climate, new investors cannot be found to perpetuate the scheme. As these schemes collapse, the CFTC will move swiftly to prosecute those who harm innocent investors.”
This is the first case brought by the CFTC’s Forex Enforcement Task Force under the new powers granted to the Commission under the Food, Conservation, and Energy Act of 2008 (see CFTC Press Release 5530-08, August 11, 2008).
In the continuing litigation, the CFTC seeks restitution, disgorgement, civil monetary penalties, and permanent injunctions against further violations of the federal commodities laws and against further trading.
The CFTC appreciates the assistance of the Securities and Exchange Commission (SEC). The SEC filed a related action against Ossie and CRE.
The following CFTC Division of Enforcement staff members are responsible for this case: Daniel Jordan, James Deacon, William Small, Mike Loconte, Rick Glaser, and Richard Wagner.
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A Forex simulator is a software program that enables foreign currency exchange traders and students to expedite their learning and understanding of currency exchange.
Unlike a live Forex demo account that functions in real time, a simulator enables users to upload, view and review historical data at any given point in time. Used to confirm one's understanding of pattern recognition and trading signals, data can be rewound and fast forwarded to test and retest one's knowledge and understanding.
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A Managed Forex Account is a relatively new way to invest. Managed Forex is where the investor choses an individual trader or a trading company they wish to trade their forex account and signs Power of Attorney over to that individual or company.
The investor usually gets to keep the gains the trader makes (minus commissions), but is also liable for all the losses. Many investors who choose to invest in Managed Forex seek an investment to diversify part of their portfolio from the stock market, while other investors just seek high returns on their money through somebody else’s forex trading.
Forex Trading always involves considerable risk. It is traded on margin which always makes it high risk as borrowed funds are used. It is often the case that the more margin is used, the riskier the trading strategy will be.
Avoiding Scams
As will all kind of investments, unfortunately Forex is no exception from a very large number of scams. There are many incompetent traders offering their services solely to earn the lucrative commissions. Many of these traders lose a substantial amount of others peoples money at no cost to themselves.
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To find out if the Forex traders with whom you plan to trade are registered, regulated, or entities that are outside The United States Commodity Futures Trading Commission (CFTC) jurisdiction, you can check the lists of regulated Forex institutions on the following websites.
Some institutions outside the CFTC's jurisdiction do not appear on any of these lists or in other readily-available places:
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Forex is hot right now. You can make a lot of money if you're smart, but you also have to be careful. Before you put your money on the table, learn some ways to recognize a potential Forex scam.
5. Question Firms That Claim To Trade in the "Interbank Market"
Be wary of firms that claim that you can or should trade in the "interbank market," or that they will do so on your behalf.
Unregulated, fraudulent Forex firms often tell retail customers that their funds are traded in the "interbank market," where good prices can be obtained.
Firms that trade currencies in the interbank market, however, are most likely to be banks, investment banks and large corporations, since the term "interbank market" refers simply to a loose network of currency transactions negotiated between financial institutions and other large companies.
6. Be Wary of Sending or Transferring Cash on the Internet, By Mail or Otherwise
Be especially alert to the dangers of trading on-line; it is very easy to transfer funds on-line, but often can be impossible to get a refund.
It costs an Internet advertiser just pennies per day to reach a potential audience of millions of persons, and phony Forex brokers have seized upon the Internet as an inexpensive and effective way of reaching a large pool of potential customers.
Many companies offering currency trading on-line are not located within the United States and may not display an address or any other information identifying their nationality on their Web site. Be aware that if you transfer funds to those foreign firms, it may be very difficult or impossible to recover your funds.
7. Forex Scams Often Target Members of Ethnic Minorities
Some Forex scams target potential customers in ethnic communities, particularly persons in the Russian, Chinese and Indian immigrant communities, through advertisements in ethnic newspapers and television "infomercials."
Sometimes those advertisements offer so-called "job opportunities" for "account executives" to trade foreign currencies. Be aware that "account executives" that are hired might be expected to use their own money for currency trading, as well as to recruit their family and friends to do likewise.
What appears to be a promising job opportunity often is another way many of these companies lure customers into parting with their cash.
8. Be Sure You Get the Company's Performance Track Record
Get as much information as possible about the firm's or individual's performance record on behalf of other clients. You should be aware, however, that It may be difficult or impossible to do so, or to verify the information you receive.
While firms and individuals are not required to provide this information, you should be wary of any person who is not willing to do so or who provides you with incomplete information. However, keep in mind, even if you do receive a glossy brochure or sophisticated-looking charts, that the information they contain might be false.
9. Don't Deal With Anyone Who Won't Give You Their Background
Plan to do a lot of checking of any information you receive to be sure that the company is and does exactly what it says.
Get the background of the persons running or promoting the company, if possible. Do not rely solely on oral statements or promises from the firm's employees. Ask for all information in written form.
If you cannot satisfy yourself that the persons with whom you are dealing are completely legitimate and above-board, the wisest course of action is to avoid trading foreign currencies through those companies.
Read Warnings Signs of Forex Fraud - Part 1 for the first half of this series.
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If you are contacted by a company that claims to specialize in Forex and asks you to give funds for those purposes, you should be very careful.
Watch for the warning signs listed below, and take the following precautions before placing your funds into any Forex or currency trading related activity.
1. Stay Away From Opportunities That Sound Too Good to Be True
Get-rich-quick schemes, including those involving Forex, tend to be frauds.
Always remember that there is no such thing as a "free lunch." Be especially cautious if you have acquired a large sum of cash recently and are looking for a safe investment vehicle.
In particular, retirees with access to their retirement funds may be attractive targets for fraudulent operators. Getting your money back once it is gone can be difficult or impossible.
2. Avoid Any Company that Predicts or Guarantees Large Profits
Be extremely wary of companies that guarantee profits, or that tout extremely high performance. In many cases, those claims are false.
The following are examples of statements that either are or most likely are fraudulent:
3. Stay Away From Companies That Promise Little or No Financial Risk
Be suspicious of companies that downplay risks or state that written risk disclosure statements are routine formalities imposed by the government.
The Forex market is volatile and contains substantial risks for unsophisticated customers. The currency futures and options markets are not the place to put any funds that you cannot afford to lose.
For example, retirement funds should not be used for Forex trading. You can lose most or all of those funds very quickly trading foreign currency futures or options contracts. Therefore, beware of companies that make the following types of statements:
4. Don't Trade on Margin Unless You Understand What It Means
Margin trading can make you responsible for losses that greatly exceed the dollar amount you deposited.
Many Forex traders ask customers to give them money, which they sometimes refer to as "margin," often sums in the range of $1,000 to $5,000. However, those amounts, which are relatively small in the Forex markets, actually control far larger dollar amounts of trading, a fact that often is poorly explained to customers.
Don't trade on margin unless you fully understand what you are doing and are prepared to accept losses that exceed the margin amounts you paid.
To learn more about protecting yourself from Forex scams, read part two of this article Warning Signs of Forex Fraud - Part 2.
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The United States Commodity Futures Trading Commission (CFTC), the federal agency that regulates commodity futures and options markets in the United States, warns consumers to take special care to protect themselves from frauds involving Forex.
Sometimes the chance to earn a large sum of money brings out the worst in people. And this is very true when it comes to Forex. You must learn how to spot a scam before you get taken for a ride.
The CFTC has witnessed the increasing numbers and growing complexity of financial investment opportunities in recent years, including a sharp rise in Forex scams. While most foreign currency trading is legitimate, various forms of foreign currency trading have been found to defraud members of the public.
The CFTC urges you to be skeptical when promoters of Forex services claim that their services or account management will earn high profits with minimal risks, or that employment as a currency trader will make you wealthy quickly.
Recognizing Legitimate Forex Operations
Generally speaking, Forex may be traded legally on an exchange or board of trade that has been approved by the CFTC.
Even where currency trading does not occur on a Commission-approved exchange or board of trade, the trading can be conducted legally where one or both parties to the trading is (or is a regulated affiliate of):
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