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Why Is Everyone Posting About ‘Forex’?

Foreign exchange trading is the latest financial strategy to get the #HustlePorn treatment, but — surprise! — it might be a scam

Twitter and Instagram are so littered with posts like those mocked in the above tweet, you’d think forex was the latest multi-level marketing scheme. And depending on how and by whom forex is being used, it just might be. Short for foreign exchange, forex refers to the simple practice of exchanging currencies, something people have been doing since ancient times. In its current form, with everyday people allowed to trade on a global level, the market has existed since 1999, but the forex market currently trades at a volume of $4 trillion a day, making it the largest financial market on the planet. 

Forex works by buying a foreign currency based on the exchange rate. The idea is that you purchase a “share” in another country’s economy by exchanging your home currency for that of another country. Ideally, this other country’s economy will strengthen, meaning that said “share” is now worth more than you originally bought it for. It’s essentially the same process one undergoes when exchanging currency while traveling but on a larger scale, though no physical exchange takes place.

Despite its simplicity and size, or perhaps because of it, hustlers everywhere are touting it as the next big thing, a get-rich practice open to anyone with the dedication to learn. Well, dedication and, conveniently, a start-up fee to “invest” in expediting the learning process. 

It should be noted that forex trading isn’t in and of itself a con. As financial literacy site The Balance says, “Forex trading is not a scam; it’s just an industry that is primarily set up for insiders that understand it. The goal for new traders should be to survive long enough to understand the inner workings of foreign exchange trading and become one of those insiders, and this will come with studying the market, understanding the terminology and learning trading strategies.” 

Regardless, it’s become fertile ground for people looking to make a buck off other people looking to make a buck. Within the #forex hashtag on Instagram and Twitter, there are countless posts cataloging a day’s trades, market graphs and the lavish purchases of allegedly successful forex traders. It’s typical #HustlePorn content.

There are seemingly hundreds of Instagram-based “trading companies” promoting their guidance and systems. One account, @goldenoptiontrading, with 57,000 followers, touts the opportunity for those who follow their method to make $100 to $500 a day with just 30 to 60 minutes of work. “We sell guidance from the very basics to advanced stuff that you can learn and get you started making that profit. But you should also put in the work,” they tell me. Their program is currently offered for $497. 

Others who I attempted to speak to about forex, though, were challenging to reach and nebulous in their answers. “I’m a forex educator, but don’t get me wrong, I will make money trading whether anybody else joins my business or not,” says @theniakouture, a forex trader who frequently promotes the strategy on Twitter and encourages people to buy into her program. “But the opportunity I’m in, it can benefit both of us. Let me get you on a prospect call to explain the whole opportunity.”

On her page, she links to a website called IM Academy, which offers software and training for currency trading. Start-up fees to join range from $189 to $325, with monthly fees thereafter from $179 to $275. When people join using her link, she receives a commission.

IM Academy — also known as iMarketsLive — utilizes a “compensation plan,” in which people who recruit others to join may receive compensation. On a smaller scale, those who recruit two people can access iMarketsLive software and information for free. Because of this, many of those posting on the #forex hashtag on Instagram and Twitter focus heavily on recruitment. But again, while this is a common indicator of a pyramid scheme, forex can be a legitimate investment strategy, one that essentially anyone could attempt to utilize for free — the subreddit r/forex and the currency exchange education website offer a plethora of resources for those looking to learn about forex, without any of the adjacent fees.

Still, forex trading, like most market investments, is both challenging and risky. For that reason, financial brokers must pass a Chartered Financial Analyst exam in order to gain the proper credentials to be identified as legitimate forex traders. Despite the boom of self-professed experts online, there are currently only around 150,000 people with these credentials globally.

As for the countless uncertified “brokers” selling their advice and strategies, some may authentically offer advice based on knowledge and experience, but others, as you might imagine, are straightforward scams. 

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Nearly every comment on #forex posts follow a format such as this one (found in the comments section of the post embedded above, sic obviously throughout): “My experience with online fraudsters is something I never wished for and it pains me to know that some of us here are still going through what I experienced… Because of my zeal I recover all I’ve lost, I continued searching till I saw a post about Mr Rayyan cheng, I contacted and trade with him and after7 days I received my first profit,connect with him via IG:@rayyan_cheng_trades.” 

Though most of these comments are likely bots, they point to a real, growing issue in forex trading. According to Investopedia, so-called “signal-sellers” and “robot-sellers”  are the biggest perpetrators in forex scamming today, claiming to offer, for a fee, a system that forex traders can easily follow in order to become wealthy, or an automated program that would do this for them. 

Because of the risky nature of investing in general, it’s difficult to crack down on shady forex practices. Again, forex as a strategy in and of itself is completely legal –– it’s the biggest liquid market on the planet. But occasionally, government financial regulatory agencies do crack down on fraudulent forex activity. Just yesterday, for example, the U.S. Commodity Futures Trading Commission announced that it had filed fraud charges against two men involved in affiliate marketing intended to solicit investors to open and fund specific trade accounts, utilizing an automated software. 

On the IM Academy website, there is a complete listing of the National Futures Association’s bylaws for compliance from third-party trading systems developers, like that of IM Academy. They essentially state that IM Academy is not itself responsible for the claims of its members who may be recruiting others to join. However, members themselves could still be held accountable. Even smaller traders, like @goldenoptiontrading, waive off liability with a disclaimer stating that the information they provide doesn’t constitute financial advice, and that they hold no responsibility for any money lost. In fairness, at least on the latter point, this disclaimer isn’t unlike those of major, legitimate investment firms in which people place their entire retirement savings. 

Scams aside, even without upfront “investments,” gurus or systems, for many who try their hand at forex, the money simply doesn’t pan out. John from Glasgow gave foreign currency trading a shot after seeing a friend of his discuss it on Instagram. He practiced on dummy accounts for a while before joining a free signal group with a £100 ($122) deposit in the market. “I got tempted, so I started with the signals, followed them, made small gains and big losses. The original £100 became £0,” he says.

“I convinced myself this was a fault of mine, as the forex signal group I followed was posting lots of wins and profit,” he continues. “So I tried again, bigger gains, but bigger loses again. Cut my losses and haven’t used it again.”

John is far from alone in this experience, but it hasn’t stopped more people from trying. After all, anyone is free to toss their money into the foreign currency market and hope for the best, following whatever strategies they see advertised — for now, losing money isn’t illegal, no matter what currency it’s in.