No, forex is not rigged – forex trading is legitimate business as same as trading stocks or trading commodities, futures.
Forex trading is expanding its roots all across the world day by day and a lot of 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 and it is not possible to make profits and money with forex trading.
So now the real question is that is forex 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. In this article, you will get all the information that will help you in clearing your doubts and queries.
There are many people who have been doing forex trading and have a lot of experience. So after researching and evaluating all the things that most of the experienced traders say and tell about trading, the simple answer is that forex is rigged but before jumping into any conclusions, understand the depth of this answer. Forex trading is rigged but not in a negative or fraud way, but in a way that it is manipulated and it is still possible to make decent money with forex trading if you have the proper knowledge. Everyone who is trading has full control and they can decide when they want to make and do the trade.
There is no shortage of trade ways and methods and you just 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 they manipulate forex and other markets which includes futures, stocks, and cryptocurrencies but is true that making profits with the forex is possible. You just need to get you 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 to make the calculated moves, you will need to learn. There are many YouTube videos available where you can easily get free knowledge.
Fx Trading: What Does it Mean?
Well, the fx fixing issue is not that in news from 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 conspiring with each other to create change in the market and at that time, this issue became the most talked thing and was everywhere. The reason why 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 what happened in the forex scam is that the big players that are in the market for a very long time along with the different banks. These banks include Citibank, HSBC, JPMorgan, and many more.
So these big players and banks came together and manipulated the bank of Reuters 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 a 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 that is 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 to not to do any trade activity at the close market sessions and 4-6 pm EST for NY session is the suggested one.
As you may already that forex is the biggest currency market all over the world and transactions of trillions of dollars are happening every day. If 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 USA?
The money you have deposited in your bank is used by banks to make more money with the help of forex trading and forex is not considered as 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 that it is not possible to have short or long open on a pair and 50:1 is the leverage limit and 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 on the basis of transaction time fix rates get calculated by WM- Reuters. This happened 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 in an attempt to manipulate the prices and to distort the fix to make profits.
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 but all the newcomers should try to avoid any kind of trade at the close of NY time session.