Can You Benefit from Forex Schemes?

The Forex world is full of schemes and scammers it would seem. In some cases it is best to just avoid offers that seem too good to be true. And sometimes is may be possible to benefit from Forex schemes. An example of a too-good-to-be-true story is Examples of where you might be able to benefit from Forex schemes are the monetary policies of several large central banks. First, we provide an example of where to run, not walk, away.

Bloomberg published a report in November of 2014 of a huge Forex scheme that may have cost Forex investors as much as a billion dollars! Forex investors were persuaded to let professionals trade their money in the Forex markets by a very well designed Forex scam. It would is not clear if the entity to which people wired their money, ever traded any money in the Forex markets. They did return some small amounts of money to some investors but eventually disappeared from sight.

Secure Investment said that it traded in excess of $4.8 billion daily for more than 100,000 investors in 140 countries. The company said it posted all of its trades every day, showing which ones were winners and which were losers. The site said investors had averaged net gains of 1 percent each trading day during the past five years.

Investors around the world may have lost more than $1 billion, based on data posted on Secure’s website and viewed by Bloomberg Markets two months before the site shut down.

“This type of forex fraud is an assault on the international financial system — victimizing investors in multiple countries while concealing where the wrongdoing took place,” says U.S. Senator Carl Levin, who is chairman of the Permanent Subcommittee on Investigations and became aware of Secure Investment when asked about it by Bloomberg Markets.

The point here is that the Forex scheme by was theft pure and simple. The only way to have benefitted would have been to have asked for your money back a month or so into the game when it would have been difficult for those felons to have refused for fear of calling attention to their scheme. However, there are schemes where you can benefit if you pay attention to the markets and do your own research of Forex currency rates.

Schemes on National Scales

The business of any central bank worth its salt is to protect and defend the currency of its country. A clear example was first with Japan and then with Taiwan, mainland China and others. If you have an economy dependent on exports you need to find ways to make your products attractive offshore. Japan and others have done this over the years by buying US dollars, thus driving the exchange rate of the dollar up and the rate of the Yen, Yuan, Taiwan dollar, etc. down. This approach is not always a cure all but can be predictable. That is where you can benefit from Forex schemes. As an example, The Economic Times reports that the Bank of Japan expects to continue an aggressive stimulus program due to the risk of the country falling back into deflation.

The Bank of Japan maintained its massive stimulus program on Tuesday and signaled its conviction that a steady economic recovery will help achieve its ambitious price target without immediate, additional monetary easing.

The central bank, however, offered a slightly more downbeat view on the price outlook, though it stressed the slowdown in inflation was due to temporary declines in oil prices.

The point of a scheme by a central bank is to accomplish goals beneficial to its currency. How to benefit from Forex schemes is to successfully anticipate the moves of the bank in question and consequent movements of the currency.

Do Your Homework

The best way to anticipate the direction of Forex currency pairs is to do your homework. The Wall Street Journal notes the European Central bank is likely to continue buying debt until inflation stabilizes. This is likely to drive the Euro downward.

The European Central Bank will purchase large amounts of public and private debt for at least 18 months and until it is convinced that inflation will stabilize near annual rates of 2%, the bank’s president Mario Draghi said on Monday, underscoring the ECB’s willingness to flood the Eurozone with freshly minted money far into the future.

Be best way to benefit from Forex schemes is to pay attention to what a central bank needs to accomplish and trade accordingly.