Online trading forex wiki
Foreign exchange fraud is any trading scheme used to defraud traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market. Currency trading became a common form of fraud in earlyaccording to Michael Dunn of the U. Commodity Futures Trading Commission. The foreign exchange market is at best a zero-sum game meaning that whatever one trader gains, another loses. However, brokerage commissions online trading forex wiki other transaction costs are subtracted from the results of all traders, making foreign exchange a negative-sum game.
Frauds might include churning of customer accounts for the purpose of generating commissions, selling software that is supposed to guide the customer to large profits,  improperly managed "managed accounts",  false advertising,  Ponzi schemes and outright fraud.
Commodity Futures Trading Commission CFTCwhich loosely regulates the foreign exchange market in the United States, has noted an increase in the amount of unscrupulous activity in the non-bank foreign exchange industry. The foreign exchange market is online trading forex wiki zero sum game  in which there are many experienced, well-capitalized professional traders e. An inexperienced retail trader will have a significant information disadvantage compared to these traders. Retail traders are, almost by definition, undercapitalized.
Thus, they are subject to the problem of gambler's ruin: In some variations of forex trading, the customers do not obtain normal fungible futures, but instead make a contract with some named company. Online trading forex wiki if the company claims to act as their "forex dealer", it is financially interested in making the retail customer lose money.
The contract is directly between the customer and the pseudo-dealer, so it is an off-exchange one; it cannot be normally registered and traded on futures exchanges. Although it is possible for a few experts to successfully arbitrage the market for an unusually large online trading forex wiki, this does not mean that a larger number could earn the same returns even given the same tools, techniques and data sources.
This is because the arbitrages are essentially drawn from a pool of finite size; although information about how to capture arbitrages is a online trading forex wiki goodthe arbitrages themselves are a rival good.
To draw an analogy, the total amount of buried treasure on an island is the same, regardless of how many treasure hunters have bought copies of the treasure map. By offering high leverage some market makers encourage traders to trade extremely large positions. This increases the trading volume cleared by the market best online discount binary optionsge canada and increases their profit, but increases the online trading forex wiki that the trader will receive online trading forex wiki margin call.
While professional currency dealers such as banks and hedge funds tend to use no more than To aid with transparency, some regulatory authorities publish in to public domain the following: From Wikipedia, the free encyclopedia. Archived from the original on The Economics of Foreign Online trading forex wiki. Retrieved 17 December Then Multiply by ". The New York Times. Scams and confidence tricks.
Confidence trick Error account Shill Shyster Sucker list. Con artists Confidence tricks Criminal enterprises, gangs and syndicates Email scams Impostors In the media Film and television Literature Ponzi schemes. Benefit Electoral Medicare Visa Welfare. Retrieved from " https: Foreign exchange market Finance fraud Scams Cyberbullying.
Currency Currency future Currency forward Non-deliverable forward Foreign exchange swap Currency swap Foreign exchange option. Bureau de change Hard currency Currency pair Foreign exchange fraud Currency intervention.
Investing onlinealso known as online trading or trading onlineis a process by which individual online trading forex wiki and traders buy and sell securities over an electronic network, typically with a brokerage firm.
This type of trading and investing has become the norm for individual investors and traders since late s with many brokers offering services via a wide variety of online trading platforms. Online trading forex wiki to the Internetinvestors had to place an order through a stockbrokerin person or via telephone.
The brokerage firm then entered the order in their system, which was linked to trading floors and exchanges. In AugustK. Investors could now enter orders directly online, or even trade with other investors via electronic communication networks ECN. Some orders entered online are still routed through the broker, allowing agents to approve or monitor the trades.
Online brokers in the US are often referred to as discount brokers but in Europe and Asia many so-called online brokers work with high-net-worth individuals. Their popularity is attributable to the speed and ease of their online order entry, and to fees and commissions significantly lower than those of full service brokerage firms within the US.
Two types of online brokerages have emerged in the US online trading forex wiki the mids: Investors who trade through an online brokerage firm are provided with a online trading platform. Included with the platform are tools to track and monitor securities, portfolios and indicesas well as research tools, real-time streaming quotes and up-to-date news releases—all of which are necessary to trade profitably. Often, more robust research tools are available such as full, in-depth analyst reports and analysis, and customized backtesting and screeners to see how particular investment strategies would have been realized during different online trading forex wiki periods.
In all investments, there is a risk of investment fraud. This risk can increase for online brokers where the investor does not have a personal relationship and the broker may be located in a different jurisdiction. For this reason some financial regulators warn potential investors to research the online brokers they plan to employ, assuring that those firms are licensed within their state, provincial or national jurisdiction. Informed investors are less likely to fall victim to unlawful securities schemes, such as the so-called "boiler room" scam.
This website cautions investors to be wary of internet newsletters, investing blogs, or bulletin boards. Stock manipulators often float false information and "hot tips" on these sites, as part of an effort to affect the price of shares in a particular security. Investors are also advised to turn to unbiased sources when researching investments. In the US, the U. Online investors typically invest without help from a trained stockbroker or investment adviserand may not fully understand the potential risks of investing in a particular security.
Inexperienced investors are easy prey for stock manipulators and pump and dump schemes often associated with penny stocks. For this reason, many online brokers offer a online trading forex wiki of investment tools to educate and inform new investors.
Many online brokers provide tools to help investors research and select potential investments. There are also numerous third party providers of information, such as Yahoo! Other reputable sites provide information on business sectors, news and financial statements of individual online trading forex wiki, and basic tutorials on subjects such as diversificationbasic portfolio theoryand the mitigation of risk associated with volatility in the stock market.
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