Forex is not rigged – forex trading is a legitimate business like trading stocks or trading commodities, futures.
Forex trading is expanding its roots worldwide day by day, and many people have made incredible profits with forex trading. For some of the world’s population, forex trading is a proper money-making source, but there is also a category of people who believe that forex trading is rigged. It is not possible to make profits and money with forex trading.
So now the real question is that is forex rigged and can be rigged? And are all the people who claim that they have made money with forex trading just scamming? So if you have these kinds of questions, then this article is very beneficial for you. This article will get all the information that will help you in clearing your doubts and queries.
There is no shortage of trade ways and methods, and you need to figure out what is best for you. A lot of you might be confused about the rigged and manipulated thing, so to make you understand this properly, you have to understand that the majority of trading players are big commercial institutions like banks, and them trade forex and other markets, which includes futures, stocks, and cryptocurrencies but is true that making profits with the forex is possible. It would be best if you got the trade volume with the required skills and mindset. Every power is in your hands. You will decide when to make a trade and when to get out, but you will need to learn to make the calculated moves. There are many YouTube videos available where you can easily get free knowledge.
We need to separate forex rigging (forex fix) and forex scam as two different things.
Fx Trading: What Does it Mean?
The fx fixing issue is not that in the news for a very long time, and it’s been a while when it was a headline on every mainstream media, but it still arises sometimes. There was a time when banks conspired to create change in the market, and at that time, this issue became the most talked about thing and was everywhere. Banks and other big players conspired together because forex is a huge market, and it is not possible for a single bank or any big player to create a big change or movement in the fx market. Basically, the forex scam happened because of the big players in the market for a very long time and the different banks. These banks include Citibank, HSBC, JPMorgan, and many more.
So these big players and banks came together and manipulated Reuters’ bank, which occurs at 4 pm (London time). So what they did was they froze the prices during the time, and it helped the banks in making a move right before the freeze, and it results in small change that was not that noticeable, but that small turns into big when a lot of clients are taking your services for the FX trading. It results in a huge profit coming from the client’s pocket, and the clients were not aware that their money is going. So it is always recommended that it is better not to do any trade activity at the close market sessions, and 4-6 pm EST for the NY session is the suggested one.
Forex Manipulation?
As you may already, forex is the biggest currency market worldwide, and transactions of trillions of dollars are happening every day. Let us talk about figures, then $5.3 trillion in transactions. As it the largest financial market, it can only be manipulated by bigger players. These major players are mostly investment banks, private equity firms, hedge funds, big corporations, and central banks.
Can You Do Forex Trading in the USA?
Banks use the money you have deposited in your bank to make more money with the help of forex trading, and forex is not considered an illegal activity in the USA. Forex is legal, and anyone above 18 in the USA can do forex trading and invest their money. There are some rules like FIFO that help to protect the retail trader from any financial losses. If you use a USA broker, then there is a rule hedging is not allowed.
Most people hedge when they are in profit, but everyone must follow this rule. Another point that everyone should take care of while using a US-regulated broker is that it is impossible to have short or long open on a pair, and 50:1 is the leverage limit. All these rules and regulations are important because they help in keeping the money safer.
FX Fixing And Forex Scandal
It means that the government will fix the exchange rates between the two currencies. In simple words, at 4 pm London time, daily exchange rates were fixed and based on transaction time, fixed rates get calculated by WM- Reuters. When many big players and banks like Citibank, JPMorgan conspired together, and they banged the close. The term banging the close is a kind of disruptive activity used to manipulate the market in which the player buys or sells large quantities to manipulate the prices and distort the fix to make profits. You can read details about top forex scandals in our post.
There are some changes in the forex like the 1-minute window changes to 5 min, and the five-minute window is hard to manipulate and new changes for banks such as they are intended to hold to an ethical code of conduct. Still, all the newcomers should try to avoid any trade at the close of the NY time session.
So on end to repeat – forex trading is legitimate business as same as trading stocks or trading commodities, futures and only big banks and big players can do forex fixing (forex rigging), but it is infrequent.
