Capital Markets Board warns investors against Forex

ANKARA – Anadolu Agency

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Turkish Capital Markets Board (SPK) President Vahdettin Ertaş has said additional measures will be taken to protect small investors in dangerous Forex operations.

“Some 88 out of every 100 investor in the Forex market lose money. We are rearranging the advertisements by the end of this year and we will take additional measures to protect small investors,” Ertaş told Anadolu Agency.

Ertaş said the leverage ratio in Forex trading is high, with investors being able to trade for 100 liras with an investment of one lira, meaning that a one percent price change amounts to an investor losing everything.

“We strongly recommend those who want to invest in Forex trading to try it in very small amounts at first, working together with more than one broker, and not to be deceived by misleading advertisements,” he added.

“Forex trading should be used by industrialists and businessmen to hedge their exchange risks. Those who invest to earn huge profits should know that the system may bring in or take away,” Ertaş said.

He also noted that a majority of small investors in the Forex market lose money.

“Of those who invest in Forex trading, 87-88 percent lose money. So the investments should be made by knowing this. We are rearranging the advertisements by the end of this year and we will take additional measures to protect the small investors. The new regulations will be in effect as of Jan. 1,” he said.

When asked about his advice to investors for the coming year, Ertaş stressed that the effects of the global economic crisis are still ongoing.

“Even if there are comments that ‘it’s over’ or ‘the end is near,’ but the global crisis is constantly changing stages and continuing,” he said. 

“In such a situation, we advise inexperienced investors to invest in capital markets via the private pension system or investment funds they can see on tefas.gov.tr. More experienced investors could get active in the stock exchange, bonds market or other derivative markets,” Ertaş added.