Is Currency Trading A Scam?

Right of the bat, the answer to the question "is currency trading a scam?" is it's not. It's correct to say that a lot of investors lose money in this market. Still, that alone can't inculpate forex trading as a scam, especially since a select few can make money consistently, plus some countries vehemently pursue the regulation of forex brokerages. But how come there's this de trop link to financial frauds? And, why is there a persistent doubt where currency trading is involved?

What's in this article?

  • Top Three Reasons Why Forex Is Linked To Scams
  • How To Avoid Scams Related To Financial Products
  • Top Three Misconceptions/Questions About FX

Forex is a zero-sum game

A zero-sum game is a more accurate picture of what currency trading is, and this had already been a popular discussion years ago. What a zero-sum game is, in simple terms, the gain of one party is the loss of another. So, if one trader wins a trade, it comes at the expense of another trader.

two people arm wrestling

This isn't necessarily malfeasance. It only means that the game is purely speculative. The role of a forex trader is to outsmart and outclass all the other participants in the currency market. It's similar to a jungle in which fighting for survival is key.

So, what causes people to say that Forex is a scam?

There's certainly no shortage of reasons why Forex is associated with scams, but it can be narrowed down to three:

1. People who lost money

Clueless investors who blew up their accounts are the naysayers of Forex trading. They are the first ones to raise misguided doubts about the FX market's legitimacy because they have no idea how they ended up losing their money.

These traders are typically the ones who fell for dubious Forex advertisements, and what motivated them to partake is the thought that this market is the path to easy money.

And, the other batch of losers are the ones who can't crack the code to profitability and have completely labeled forex trading as a scam.

forex losers maggie simpson

2. Dishonest Marketing Tactics and Brokers

The bad experience of some traders, as mentioned, is due to the dubious advertisements which are conceived by fraudulent brokerages. By and large, they are the ones doing the most damage to the reputation of the Forex market.

In the past, some brokers would advertise how much money their supposedly profitable clients made during a short period. Since other parts of the world haven't fully matured in their relationship with the internet, these blatant scam advertisements worked like a charm.

3. Markets related to Forex

Lastly, the other financial products which have something to do with currencies but don't fit the description of foreign exchange trading also soiled the reputation of the Forex market.

One financial instrument which has been subject to fraud and scams is binary options, and most traders view this product as something very akin to Forex -- but it certainly isn't.

Forex trading is a lot more complicated than just guessing if a currency pair's exchange rate will be above or below a specific price after a few hours.

And although some shady companies do manage to slip by regulation, most forex brokerages are still liable to regulatory bodies in the countries where they operate.


How to avoid Forex scams?

Avoiding scams takes a combination of cynicism, shrewdness, and practicality. It also helps to be curious about how companies make money or any pertinent details about an investment offer. And seeking the opinion of professionals like a licensed financial advisor is also helpful.

Other questions about Forex

In this section, the common misconceptions and questions about the currency market will be elucidated.

1. Is Forex Trading a pyramid scheme?

The answer: No. It's not supposed to be.

People ask this question because they might've heard of the companies that attempted to use pyramiding schemes for luring investors to their scam. And pairing it with FX delivers a perfect blend to promise high returns to unsuspecting investors.

Moreover, the same concept translated to gold trading and cryptocurrencies too, but it characterized more of a Ponzi scheme -- robbing Peter to pay Paul.

pyramid scheme

These companies are defunct now because of several legal issues (hopefully, nothing of the same nature resurfaces).

2. Is Forex Trading Gambling?

No, it's not gambling unless the trader likes it to be. It becomes gambling when traders go in and out of the market arbitrarily. The market in itself is already volatile, and trading it without a concrete plan amps up the risk.

Trading also becomes gambling when an investor trades out of excitement and with no intention of learning from each trade.

Approaching the forex market doesn't always have to come from a gambling perspective. A methodical strategy can be used to mitigate the risk and increase the probability of success. (More about gambling and forex trading here).

3. Is it true that it's easy to make money trading Forex?

Yes and no. 

It's easy to make money, but it's challenging to be consistently profitable. Almost anyone who had tried trading currencies, at some point, closed a trade on the positive side.

But what they can't do is multiply the initial amount they deposited.

A few of the factors that hinder a trader from becoming profitable are a tendency to gamble, the inability to accept a losing trade, and the tendency to get greedy at an inopportune time.


Trading the foreign exchange market is definitely not a scam. There are just those who propagate the idea that it is because they either had a bad experience or they're simply ill-educated and ill-equipped to trade currencies. Additionally, forex trading can't be identified as a scam, especially if a trader deals with a regulated forex broker.


If you're convinced that Forex is not a scam, we invite you to take this FREE Forex Beginner Course for you to learn what FX really is.

35 thoughts on “Is Currency Trading A Scam?

  1. Currency trading is a good way to make money. But you need to learn the basics, people tend to start a forex business without taking the time to learn. Yes, you can make a lot of money but you can also lose it all. 

    Take time to learn and research which trading company or broker is best. And go for one that provides training to help you grow and improve your skills. 

    I have always been interested in having a forex business but I am looking for a place to learn more about it before jumping. Because I have seen people make money comfortably with forex.


    1. Hi Adyns68,

      What you said is very true.  

      That’s precisely what every trader needs to do, and continuous learning is also vital.

      And, you’re on point with what you mentioned about finding the right broker as well — the right broker should not just provide you access to the currency market, but they should also offer you the much-needed support.

      Thanks for the comment and feel free to browse our other content.  We cover a lot of trading and investing topics!

  2. This is an interesting and helpful article. I found your article highly uplifting & educational.

    Forex trading is on my list for years. However, I didn’t try it because of the increased number of scams, and the risk involved. I was also thinking of it as gambling.

    After reading your article I realized my misconception, and you have given me plenty to think about here. This article is so thorough it opened my eyes to all sorts of information I wasn’t aware of!

    I am planning to learn more about Forex trading from your site and I am bookmarking it.

    Much Success!


    1. That’s so awesome of you Paul!

      We’re pleased to know that we’re able to clarify some of your doubts.

      You’re welcome here anytime. 🙂

  3. Thanks for sharing light more to that binary option. I’ve tried binary option several time without result. And even volatility 75 index almost makes me to loose my life saving. Yes It’s easy to make money, but it’s challenging to be consistently profitable. One of the factors that also hinders me is my inability to gamble and study the market with my candle sticks. Thanks for your conclusion about foreign exchange market is not a scam. 

  4. Your post on how to know if forex is scam business is very educating based on the points that you have listed I learn the reason and people that broadcast forex trading is a scam, I think with money management and risk management this can convince any forex trader through demo account and see that forex trading is not a scam. I will share your post on my social media to create awareness and change of mind for friends whose mind is based on currency trading is a scam because you make good points.

    1. Thanks, AmDetermined!

      It’s not just the demo account that vindicates forex of being a scam.  You can be super skilled in trading, but if you’re dealing with an unregulated and fraud of a broker, then you’re bound to lose some if not, all of your money.

      Much like trading equities, trading currencies is, in no way, shape or form, a scam.  There are just frauds out there who use the allure of the extraordinary returns — through leverage — that trading this market can generate to lure people into their confidence game.

  5. This is quite an interesting question,,,it’s been bothering me for a while now that a lot of people all over the social platforms are raving about trading forex especially currencies, to ask yourself if it a scam comes first in my mind and cannot shake off the fact that I have seen people investing into forex trading and loose all the hard earned money ,,after reading your article I’m convinced it’s is not a scam ,,, help me out here How much training do I really need  and how do I ensure success how much should I save up ( well let me say the money I can afford to loose )

    1. Hey Elihlez,

      Well, learning doesn’t end. Even each trade presents an opportunity to gain new knowledge and experience.

      If you’re starting out, then it’s best if you trade with a demo account first.  Get consistently profitable with it for many months and then decide if you’d want to gun for a real account.

  6. Hi. Your article is very useful for those that want to start trading on forex and are not very sure about it. You said it well by pointing it out as a genuine currency trading business. Many out there, including myself have been victims of scam broker advertisements. I was lured in by the promises of making lots of money in a very short time with a smart software which I never had access to.

    1. Hello Fany,

      Hope that you never get to experience something like that again.  We did cover investments scams in this article: Avoid Investment Scams- 6 ways

      By reading that article, you’ll have more awareness and knowledge to shield yourself from frauds.

  7. In all honesty, I used to think forex trading is equivalent to gambling only that it is more advanced and strategic. To me, people who get involved are those who just decide to guess what trades go up and which come down and use that to their advantage to make money and then seeing people actually lose their money to it cemented this notion. After reading this post though, I can conclusively say that forex trading is nothing close to a scam. Its precise and if one can study it properly, one can make good money from it. Great post, very d

    1. Hi Henderson.  Very true. Also, in gambling, the outcome that you’re betting on has probably, at most, a fifty-fifty chance. 

      But with currencies, there are ways for you to improve that either through carefully analyzing what goes on with a country’s fundamental data or by entering a price trend through a thorough look at the charts.

      Still, both deal with uncertainty, and that’s what incites the comparison.

  8. Hi

    I see investing in currency as the same as investing in gold. If you do it right you can make a killing, get it wrong and you will make a huge loss. The currency market is so volatile and is dependent on so many variables, which makes future predictions difficult and some will say near impossible. 

    I  understand and appreciate the  problems with Forex but I am glad that it is not a scam. It seems that the company needs to improve and address the issues facing them. If it did so, it may reduce the complaints against it.  It looks like something that I may have to look into.



    1. Hi Antonio,

      You’re right, and no one can ever predict it.  The best traders focus on controlling their risk and minimizing their losses rather than winning each trade.

      And, yes, some brokerages do a horrible job in addressing the issues of their clients, which is why it’s crucial to find a broker that places a high value on their customers.

  9. Definitely, currency trading is not a scam in anyway. It’s a very lucrative business that requires serious learning and practising for one to attain mastery in it. I had actually thought it was a scam too before I got engaged in it. Just like you stated, loss of money is the reason most people categorise it as a scam which it’s not. It needs consistency, and seriousness with higher level of patience to make a success on this business and only few could do that coupled with intense training. I have been trading forex for more than 2years and I can boldly attest to it that it’s not a scam.

  10. Forex trading is most certainly not a scam but it certainly takes a lot of study and expertise.  Without this, as you mentioned, people get burned and lose their money and then blame the currency exchange.

    In mutual funds, what are money market funds?  Yes, these are funds that trade on foreign currency shifts and are actually the safest (albeit lowest earning) mutual funds to be in.

    If you do not have the time to study this market then you need to use a broker who knows the business or invest in a business that does.  Would you play the stock market without having a clue what you were doing?  I sure hope not!  Well, Forex trading is the same.  Take the time to learn it, hire someone who does know it or stay out of it altogether!

  11. I have heard of currency trading before and I have met currency traders but I have never herd of the term forex! Nevertheless the name is not important I have always thought it was risky.

    I have met investors and when I spoke to them I got mixed reviews! Your post helps me to understand more clearly, although you make a good point of it not being a scam it is still a zero sum game and that makes it risky!

    are you aware of any other currency investments that are more dynamic where the odds are in the favor of all players?

    1. Hi Robert,

      It’s purely speculative because currencies don’t produce anything for you after you purchase it.  

      The only way to make money is if it appreciates against other currencies or if you correctly guessed if a currency will depreciate against another and had the forethought to short it.

      With equities, there are profits that a business earns that you’d get a share of as a part-owner, and this (stock’s value) tends to appreciate over time as a company improves.

      Well, I haven’t heard of something that disperses favorable odds to all participants, but that sounds great although I don’t know how investors would profit from it.

  12. Excellent review,Forex trading has been in existence for long and the trading is very volatile,its requires adequate knowledge and training,It’s easy to make money, but it’s challenging to be consistently profitable. “Almost anyone who had tried trading currencies, at some point, closed a trade on the positive side. But what they can’t do is multiply the initial amount they deposited” — yes this true, but I discovered some that made losses was because of greediness, there is provision to set stop loss which means the total money used for trading can never lost,Forex requires being expert and having a trading techniques that brings results.Thanks for sharing this write-up.

    1. Hi Abayomi,

      Yes, but what makes a trader great is his/her ability to control emotions when trading.  Strategies are just a part of the game, but the improper implementation of it can be disastrous. That’s why sometimes it’s better to automate strategies to take emotions out of the picture, but the currency market is so dynamic that no single tactic is applicable to all conditions.

  13. I know individuals who are making insane amount of money trading currencies. How they do it? I have no real idea but I know it is a matter of taking risks. If you are thrown down, you get up, dust yourself and trade again. I must say this business takes courage and patience to master the art. This zero sum trade to me is kind of an ‘unfair’ game.

    When I was introduced to forex business, I had to go through a broker that up to this day I am not sure what happened. But did I loose money? YES. I still believe in succeeding in this and soon enough I will embark on this journey.

    Thank you for providing such detailed insights. This is a very article. 

  14. Thanks for clarifying the question, is Forex Trading gambling? That was something I always kind of wondered because how does anybody know what’s going to happen? But I guess there’s more of a chance to learn about how to make the best choices? Your article about that was helpful thank you for internal linking it. If I got into any kind of trading like this I would probably go for a broker like you said.

  15. Thanks for this informative post. I have heard lots of rumors that Forex and currency trading are scams. But I didn’t know enough about it to make my own conclusion. That’s probably why I ended up at your site. Your article was very helpful in explaining the pros and cons with trading Forex. If I do end up pursuing this, I will definitely go through a broker who can help me through it. Thanks!

  16. Gambling guys are the ones trying to forex using same “strategies” as gambling on casinos and the ones spreading rumours about “forex to be a scam”, after losing their money :D! Nice post/article about the topic could be written hundreds of A4. I haven’t been in forex businesses but I have invested and made pretty much money by cryptocurrencies. Actually, its sort of forex or depends on who you ask about it. What do you think about cryptocurrencies? 
    Kind regards -Jesse

    1. Hey Jesse,

      Well, unless governments establish cryptocurrencies as the mode of payment, it will remain the way it is, a financial instrument for speculation.

  17. Hey, thanks for raising awareness about Forex trading. 

    It seems pretty damn competitive, since like you said it is a zero-sum game. One person’s “hunch” bettering another. It’s pretty funny how any business model can become fraudulent on the internet. 

    You can sell people any opportunity by just making it seem easy and showing how a few other people have done it. It is a constant battle between genuine business’, teaching a skill-set, and people that just want to sell hopes and dreams. 

    Thanks for sharing this article. It was very helpful.

    1. Thank you, Wilson.

      You’re on point!  And, that’s also what makes it tough for legitimate businesses to find customers because those who’ve been duped by scams are probably too traumatized to discern what’s genuine from what’s not anymore.

  18. Currency trading and investing in a legit trading company cannot strictly be considered as a scam business, but the risk that the traders have when investing on it is quiet high. This is a fact, as the success rate in the trading activity is by today at 5-10%. This means that only 1 out of 10 traders are not losing their invested money.

    It is also not a gamble, as advanced previous knowledge about trading is required in order to guess any trading operation. Anyway, we can’t predict even the immediate future of the market, so they are all just speculations with a certain degree of veracity.

    If you are a person who has some time and wants to give it a try even the low success rate that it carries, first of all you must ensure that the trading company where you are signing up and you are depositing your initial inversion is not a scam, because you must be aware that today there are many common trading companies that may appear as regulated but they are not. People and companies just scam where money is present, and trading is a very standard and powerful source of money, so that’s why mainly the currency trading and scam are usually related in the sense that many non-regulated companies will try to scam you with huge amount of money because this is an easy target for many people.

    1. Thank you for your input, Nestor.

      What you said is true, the success rate is indeed very low and that traders should find a reliable broker to trade with because that’ll determine a large part of their success.

  19. Thank you for explaining the world of Forex trading further. I have never ventured into trading currencies, mostly because I know so little about the process and the risks can be so steep. 

    I don’t believe I ever thought of Forex trading as a scam, however I have read about many scams that revolved around it. Are there any resources for beginners like me who know very little about the Forex market but would still like to start investing? Thanks again!

    1. Hello Shan,

      Well, you can follow us because we do write articles that are targeted for beginners too. 🙂

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