Forex expert hails action on pyramiding scams

An expert in foreign currency trading welcomed yesterday congressional action on pyramiding and other business scams in order to protect the investment public from incurring further huge losses.

Jonathan Ocampo, financial consultant of the Performance Foreign Exchange Corp., said that the proliferation of financial scams conducted by unscrupulous business corporations may be among the factors affecting economic recovery in the Philippines.

Hundreds of pyramiding scam victims have trooped to the Senate to attend the hearings on the scam conducted by the Senate committee on trade and commerce under the chairmanship of Sen. Robert Jaworski.

During the Kapihan sa Rembrandt media forum in Quezon City recently, Sen. Aquilino Pimentel deplored the failure of the authorities to locate the persons responsible for the scam that has divested hundreds of investors of millions of pesos in hard-earned money.

House Minority Leader Carlos Padilla and Congressman Tet Garcia agreed that Congress should enact a law increasing the penalties for such swindling schemes, which fall under the crime of estafa.

Ocampo said that in addition to the increase in penalties, the public itself should be wary of investing schemes that promises unusually high returns or profits without any extra efforts on their part.

In the case of foreign currency trading, investors can avoid losses by familiarizing themselves with the workings of the currency market, their trends and the factors that influence the way it is going.

"Don’t just jump into the market without first studying how it works," Ocampo declared. "It’s just like if you want to snorkel, first know how to swim."

Thus most traders, according to Ocampo, turn to what is called "market analysis." "Simply put, market analysis is what we do when we try to determine where a given currency is going. It is an attempt to determine future price levels based upon historical price action and current market conditions," he explains.

"While knowing the fundamentals behind market action is in and of itself beneficial, the amount of information that traders now have to cope with is staggering," said Ocampo. "Thus more and more they come to rely on technical tools to analyze markets."

For instance, according to Ocampo, "PFEC provides a website and a trading platform (FX station 2003) for investors containing analytical data on foreign exchange transactions worldwide. This allows the investor to monitor the markets, program trading strategies and be constantly aware of the market developments. Based with such knowledge, the trader is forearmed against possible misjudgments."

Ocampo said that through innovative use of internet browsing technologies, combined with the internet currency trading system, the FX station provides the necessary tools to succeed in this fast paced and flourishing market.

Global trading in major currencies now amount to $1.2 trillion a day, making FX transactions the largest type of market these days, Ocampo declared. The FX market, he said, dwarfs the volume levels of even the New York Stock Exchange by 27 times per trading day.

In the Philippines, foreign currency trading amounts to around $100 million a day. However, the trading does not include the Philippine peso. Thus, no pressure is exerted upon the peso from this sector, Ocampo said. The peso’s movement, according to Ocampo, is due to other fundamental factors, such as domestic and global political and economic conditions.

Local investors through wise, informed and moderate trading can benefit from the world foreign currency market, Ocampo added.