The foreign exchange market is quite popular among investors. It offers many advantages that attract these investors to invest heavily in the market. Since it is highly volatile and highly liquid, it provides frequent opportunities to make substantial profits. The market practically never sleeps due to differences in the time zone; thus, an investor can enter the market at any time.
Scammers seek easy money, and what more can be lucrative by misleading and using deceptive tactics to fool their potential victims. As per the Federal Trade Commission report, 2024 saw a rise of 23% compared to 2023. The total amount of money lost is more than $12.5 billion in 2024 alone.
As more money is involved, it is quite easy for scammers to manipulate the Forex market and have the odds in their favor.
If you wish to enter the money market, you should know the signs of Forex market manipulation. Having such knowledge will help you avoid falling victim to such online scams.
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The Forex market has a daily trade volume of more than $7.5 trillion. Such a staggering amount of money is involved, and bad actors understand that manipulating the price of currency pairs can yield them more profit. Thus, even when they invest a little, a huge amount of profit is assured. And this is how scammers manipulate Forex markets.
Understanding how the bad actors get involved and manipulate the Forex market can help you avoid falling victim to it. Although it acts as a necessary evil to sustain the economy, there are times when the market is intentionally manipulated for illegal gains.
Market makers artificially manipulate the price of the currency pair. Since these players possess the collective data of every investor who uses a "stop-loss" order, they can manipulate prices accordingly. The price is so manipulated that once the price of the collective “stop-loss” is crossed, triggering market orders, the price of the currency pair again surges.
Sometimes a currency pair experiences huge volatility. To control it, market makers usually manipulate the market by setting the bid-ask price. They do this at night when there are fewer market participants.
Market makers also use “pump-and-dump” tactics. They will artificially manipulate the price of a currency pair, creating strong “buying pressure” or “selling pressure. With such hype, many investors react to the market pressure, thinking that they can make a quick profit. However, when the currency pair reaches the price level expected by these market makers, they immediately “buy” or “sell” the currency pair, making a quick and substantial profit.
You would be surprised who these bad actors are and how they successfully manipulate the Forex market.
Central Bank: The central bank plays a vital role in controlling the flow of money. They decide the amount of money to circulate in the economy. They also decide if the price of the currency should appreciate or fall.
As the Forex market involves the trading of currency pairs, the central bank directly or indirectly involves itself and manipulates the market as per its economic agendas.
Market Makers: These are large banks, huge financial institutions, and prominent retail brokers.
If you are interested in knowing how to avoid manipulated forex pairs, then look for these warning signs.
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Manipulation Tactics |
How to Spot It |
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Fake Moves |
There are sudden, unexplainable price spikes or drops that are followed by quick reversals, especially when there is low liquidity. |
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Stop Loss Hunting |
Price briefly hits stop-loss, then reverses in the original direction; this is common around key levels. |
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Manipulative Tricks |
Consistent slippage, requotes, platform freezes, unexplained wide spreads, or withdrawal issues. |
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Real Examples |
Historical cases like "Fix" rigging by banks or spoofing prosecutions reveal past schemes. |
If you are interested in trading in the Forex market, then you should choose a reputable and trusted Forex trading platform. Besides this, you must also check for these signs of market maker manipulation in Forex:
If the above steps seem familiar, then you can be sure that you have fallen victim to a Forex manipulation scam. Take these steps immediately:
These are common steps for any investors who have fallen victim to a Forex manipulation scam.
You need to contact the government of your country and report to a specific department that takes care of financial fraud.
Although it is not bad to rely on the government to help recover your stolen money, you need to know that there are several scammers and governmental departments that have their resources stretched.
You can alternatively contact a professional financial fraud recovery expert such as Financial Options Recovery. We are a dedicated team of experts with state-of-the-art technology that aids in financial forensics. This method helps us to track down your stolen money.
Another advantage is that we have a team dedicated personally to handling your case, allowing a quick resolution. We keep you informed of the latest developments, assuring you that we will recover your money.
When it comes to investment, you should research, no matter how lucrative the market might seem to be. Everyone has their own goals and financial aspirations. It does not matter if you are old school or follow the latest trends; with the latest economic situations, it is wise to invest in both Bitcoin and Gold. You should at least have 5% to 10% of your wealth in both Bitcoin and gold. You should always invest the amount you are willing to let go of.
The decentralized nature of the market is one of the main reasons, along with the involvement of large players, and information gaps make it susceptible.
When fake Forex brokers place large fake orders while trading and then cancel them to trick other traders into participating in the market. These scammers are the ones to benefit from this “spoofing.”
When scammers simultaneously buy and sell currency pairs to create fake trading volumes, it is called “wash trading.”
Even though the Forex market is unregulated, the government makes it mandatory for Forex brokers to protect the financial interests of the investor. These Forex brokers are required to carry a certificate that proves they are regulated by either a governmental department or a reputable and trusted private firm.
Yes, with a lot of practice and by executing your research-based strategies, you can surely be a successful Forex trader.
