The expanding FOREX, or FX, market exists wherever one currency is traded for another. It is by far the largest market in the world, in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, financial markets and financial institutions. The Retail Trader, meaning the small speculators like you and me, are only a small part of this huge market. You can only participate indirectly through brokers or banks, but you are a major target of FOREX scams. Not all FOREX traders on the Internet are scams, but the vast majority, sadly, are. The only way you will truly know which are the legitimate versus the illegitimate FOREX traders is by doing your due diligence.

So what is a FOREX scam? It is any trading scheme used to defraud individual traders by convincing them they can expect to profit by trading in the foreign exchange market with little or no risk. They do not require the investor to “qualify” as an investor to participate. The scam can include the churning of a customer’s account for the purpose of generating commissions, selling software that is supposed to guide the customer to large profits using a special formula, improperly managed accounts, false advertising, promoting outlandish returns, outright fraud (claiming to trade but don’t), or a Ponzi scheme paying early investors with new investors money. But it can also be any Retail Broker who promotes trading on the foreign exchange is a reasonably safe, low risk and profitable method of investment requiring no investor qualification. BUT they all have one thing in common; they are scams and illegal.

If you do not know what you are doing, trading in the foreign exchange markets is like playing Russian roulette, but with a fully loaded gun. Commodity players have a better chance of succeeding in these markets because of their experience from trading in commodities, which are very similar to the FOREX markets. They also have the knowledge and access to factual information to help minimize their risks. Still this market is not for the faint of heart, and you must be able to “qualify” as an investor to participate. Something that scam HYIP programs do not require, and should be a major red flag telling you it is a scam. If you think there is no risk involved in the FOREX markets, think again. REFCO was one of the largest FOREX traders in the world went bankrupt, and are now facing criminal charges because of unscrupulous traders.