Our main focus in the last article was how to avoid a forex scam. However, what we did not mention is the kind of forex scams that are out there. We did mention that scammers are highly adaptable and thus use many strategies. Therefore, you have to keep your eye out on all sorts of ways you may face dishonest forex ‘professionals’. We will introduce the key phrases that you need to know when discussing forex scams.
The first concept for Forex scams we will introduce will be copy trading. Copy-trading means other investors will copy someone’s play in the forex market. All they do is follow exactly, to the dot, what other forex traders do. No strategy of their own. This is quite easy in the modern era, as one can see figures in great precision. People can also program software to automatically follow traders for them.
You may confuse this with mirror trading. However, mirror trading is more trading. It just means getting the idea of a person’s strategy and investing thusly.
Forex hedge scam
A forex hedge is how people prevent unwanted moves in exchange rates. This a specific type of deal that people do to protect their own position. Through wise decision-making, people using this can really avoid a lot of downside risks. There is also the opposite side. If one is shorting a currency, they can avoid many upside risks.
This happens all over the place. Among firms, investors, and individual traders.
Indicators are great supplementary material for technical analysis in forex. They indicate the future price changes in the market. They are soft predictors. They do not tell people about a sure thing. These are numbers that computers come up with according to various different formulas and indicate various different trends.
These are the definitions we wanted to get down. We will continue talking about Forex scammers next time.