Paul Robert866 Nelson

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What is spoofing in forex trading and why is it illegal?

Spoofing involves placing large fake orders with no intent to execute, designed to mislead other traders about market demand. In forex, a spoofer might place huge buy orders on EUR/USD to push prices higher, then cancel them and sell into the rally. Institutions and regulators classify spoofing as manipulation because it distorts supply-demand transparency. Benefits for manipulators: temporary advantage and profit. Risks: severe fines, bans, and criminal charges—as seen in cases prosecuted by the CFTC. Retail traders may be victims, chasing false signals. The lesson: avoid over-reliance on order book data, and focus on confirmed executions. Spoofing illustrates that markets can be distorted in the short run, but regulators now aggressively monitor such abuses.