Forex is more stable than crypto, if not for scammers, expert says

Even as young investors lament losing millions to Forex scams, a trader and investment expert, Prince Sokwaibe, has emphasised that Forex trading remains a stable investment, even more so than the much-touted cryptocurrencies like Bitcoin, etc.

In a chat with Technext, Prince, who also invests his time in teaching people how to invest rightly through his platform, the Entrepreneurial Training Academy, said the problem with young people seeking to invest in forex is a lack of knowledge and greed.

“The problem is greed and lack of proper knowledge. Aside from that, Forex is a more stable investment than crypto. The way it’s been taught and advertised is the problem because in Nigeria, the narrative is mostly driven by marketers at best and scammers at worst,” he said.

He explained that Forex is a more stable investment because nobody is rugpulling, unlike crypto, where people can learn how to write smart contracts, create a currency, deceive millions into buying it for a high price, pull the rug on them and leave them with worthless coins.

He further noted that Bitcoin is no longer a great investment as it can’t guarantee huge returns anymore, has become less volatile, and most analysts have predicted a $150,000 cap. Hence, the best an investment into Bitcoin could fetch is less than double their capital.

A case for Forex despite rising cases of fraud

Young Nigerians have continued to flock towards Forex trading as a means of making ends meet. While many of them end up getting scammed and losing millions of dollars, it still doesn’t deter others from taking the same route.

Recently, a Nigerian comedian and skit maker, Mark Angel, revealed that he lost $3.7 million in forex trading, a situation which left him drowning in debt and ultimately becoming suicidal.

“I trusted the wrong hands in forex and lost all my money. Nobody knew except my family and my closest circle. The weight of the loss, over $3.7 million, was suffocating. I was drowning in debts, and one by one, I watched all my properties slip into the hands of loan sharks. It felt like my world was crumbling, and in my darkest moments, I considered ending it all,” he said.

This lack of caution compelled M-Kopa Nigeria MD, Babajide Durosola, to berate young Nigerians for their gullibility. He believes that they repeat the same mistake and fall victim to the same tricks all over again. 

“Una no dey hear word about this forex thing! Many people are just fraudsters pretending to be experts,” he tweeted.

He also elaborated on why it will be difficult for an individual forex ‘expert’ to understand Forex enough to teach it, noting that banks that carry out major foreign exchange trading invest humongous sums into them.

“Do you know how much money and engineering investment banks spend on forex trading? Yet, someone with just four screens and chatting online wants to teach you? It’s hilarious!” he noted.

However, Prince, also a victim of scammers in his green years, chalked it down to the absence of the right education.

He explained that with education, prospective traders will understand that Forex is not fast money, but offers slow and steady returns. He noted that the longer they are in it, the more opportunities and the more money they can make. However, these young investors are not ready to listen to that sermon.

“I understand the pain that a lot of people are going through trading Forex, but the problem is the education. If you advise people to stop looking at monthly or bi-monthly returns but to focus on more long-term goals, most people will run from it because they think it is a get-rich-quick endeavour. They want to double their money by the end of the month because they still have that salary mentality,” he stated.

Narrating his experience, he said that after years of losing money, he took some time off and started researching the right information. He stopped looking at people driving luxury cars and showing off houses and vacations.

He started learning about verified traders who had made money.

He listened to lectures from people who had traded with the banks and hedge funds and discovered the story was different.

These experts were not focused on how much one can make per month. Instead, they spoke about quarterly and yearly profits. They focused on the long-term and did not base their trades on charts as with most traders.

Instead, they considered geopolitical and economic factors, which many Forex marketers do not teach.

“I have traded crypto for up to 10 years, and I failed for 6 of those 10 years. But Forex is not a scam. I will advise prospective traders to just understand it for their own sake, even if you’re not going to invest your money in currencies, just understand how the decisions of governments affect their different curncies and how the CBN plays a role by increasing interest rate to reduce inflation, understand how countries are dealing with interest rates vs inflation.”

“These are the things people need to understand before deciding to put their money,” he concluded.

See also: From student to internet fraud, then prison- A true story of a repentant Yahoo Boy