Foreign Exchange: Smelling A Rat

“I know a friend who borrowed thousands of dollars to invest in the venture. When the venture failed, he lost everything.”

Silence. We were sitting in the living room and discussing an incident that transpired not long ago in my country. It happened that a group of individuals had run a scheme where you can invest your money and it will be used to trade foreign exchange. The scheme promised large returns to Investors.

“I personally lost hundreds of dollars to that scheme.” My father, sitting on a sofa, said presently.

I recalled several personal friends I knew also lost sizable amounts to that fraudulent scheme. Because of the this, many of those who lost money started speaking ill of foreign exchange trading. Some called it a scam, others said it was like a Ponzi scheme.

“That's how people with zero knowledge of an enterprise venture into that enterprise and when it fails they start labelling it bad.” One of my friends, Chinedu told me.

“Yes,” I replied. “It's quite certain that the majority of the people who were involved in the fraudulent scheme never knew anything about Foreign Exchange trading. It baffles me how someone can commit large amounts of money to strangers to do a thing they know nothing about.”

Chinedu made a comment about how Forex trading worked. You had to spend months if not years mastering the market and then begin with demo trading. Then you invest a little of real money before you start trading fully.

It was Chinedu who introduced me to Forex trading some time ago. It was a sort of difficult journey from the start but we made some definite progress. We had a lot to learn and we did. We aren't millionaires yet, far from that, but I would discribe myself as an advanced beginner.

It surprised me how people failed to smell a rat when the runners of the fraudulent Forex scheme first surfaced. I mean the large amount of investment returns they promised should have rung a bell. But it didn't, because greed is in our nature, and that's one of the things scammers utilize in preying on people.

I have learnt from my experiences with Forex trading, that it's not a get-rich-quick scheme. It takes time. You have to prioritize learning and growth and you have to intentionally practice risk management. Those who come into Forex hoping to bag millions in no time are mostly the ones who don't make any progress.

I'm sure if I had met that scheme when I had gotten a little enlightenment about how Foreign Exchange trading works, I would have smelled a rat.

“I prefer to master the market myself and trade by myself.” Chinedu told me. I preferred it that way too. Right from the start I had abstained from getting trading signals from others. I wanted to master the financial markets by myself and for myself. It's not easy at all but to me it's really the best way.

The many people in my country that lost millions to that elaborate fraudulent scheme was because they didn't smell a rat, the whole thing didn't look suspicious from the start. At least the large investment returns promised by the fraudsters shoud have been a huge red flag.

Even after this incident, people in my country continue to fall prey to these type of scams. The most recent one duped people of over $800m. It amazes me that people are so slow to learn from these type of experiences.

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