Is Forex a Pyramid Scheme?
There are many misconceptions about Forex. One of them is that Forex trading is a scam, and forex brokers are pyramid schemes. Although, there are lots of scam companies hiding under the Forex trading flag. Unfortunately, most traders often encounter them, which brings us to the question, is forex a pyramid scheme?
The biggest financial market in the world right now is the Forex market. The Forex market has trillions of dollars traded daily by large firms and banks. The internet and advanced technology have made it easy for individuals to easily access the Forex market. And this can only be done via a Forex broker.
Most traders are left with bad impressions after encountering a scam forex broker. This results in many people believing that Forex trading is illegal and a scam. However, this is just a myth. Most Forex brokers are highly regulated and monitored by their respective regulatory bodies. Nevertheless, you need to know how to recognize an illegal Forex broker. Also, things to consider when you choose a broker.
BRIEF HISTORY OF FOREX
The Forex market has been in existence for more than a hundred years, but it was not traded professionally. The exchange of goods and foreign currencies for goods and services has always been happening. The modern-day Forex market is a whole new invention.
In today’s market, many currencies are certified to freely float after the fall of the popular Bretton Woods accord of 1971. The price of these currencies is defined by their demand and amount in circulation. The prices are closely regulated by the foreign exchange trading companies, that is the Forex brokers.
Previously, the retail bank and investment companies were the main players. They conducted most of the Forex trading for their investors. Foreign exchange became a hot cake during this era. Profit was generated from the price difference between the two currencies. Income was also generated from the differences in the exchange price between the traded assets.
Before the internet came into existence, trading Forex individually was difficult. Most individual force traders were global industries, affluent people, and hedge funds organizations. Forex trading was difficult back then because it required huge capital to get started.
The introduction of the internet gave birth to a lot of trading opportunities. A global commercial market has been created that focuses on individual traders. These global markets grant access to the foreign exchange market via secondary markets. These secondary markets include brokers, individuals, and banks. There are so many Forex brokers and traders that provide trading leverage to retail traders. This leverage allows a trader to invest in a large with minimal capital.
HOW THE FOREX MARKET WORKS
The forex market is an online trading sector where foreign currencies are traded for one another. Is a never-ending buying and selling of foreign currencies. The best part of it is that it is a decentralized form of trading with no physical office or building. All trades are done online via trading networks with computer systems. The traders are the retail traders, institutions, and banks.
The Forex market is volatile. Many things can positively or negatively affect the price of a currency. These factors include natural disasters, political news, and an upcoming election.
The Forex market can be traded in three different methods, there are:
- The Spot Market
- The Forwards market
- The Future markets
1. Spot Market Trading
The Sport Market is the largest Forex Trading market. The majority of the Forex market traders trade the Spot market.
The spot market is the buying and selling of currencies on their current trading value. The supply and demand of the currency determine its price. The supply and demand of a currency are evaluated using different components. Factors like the economic performance of the country, interest rates, and political news affect the price of a currency. The value of a currency is also determined by the prediction of its future market trends.
The “spot deal” is the value of the exchange rate at which two currency groups are bought and sold at. Spot trades are the major Forex deals.
2. The Forwards and Futures Markets
This market has to deal with the agreement between two individuals to buy a currency at a predetermined value in the future. Forwards and Futures are different from the spot markets. They don’t deal in currencies; rather, with contacts that replace the currency with a particular price attached. Also attached to the agreement is a future date for the sealing of the contract.
In Futures and Forwards markets, the contracts are bought and sold over the counter depending on the quantity of trade and contract dates.
HOW TO START FOREX TRADING
Forex trading is related to types of trading like Stocks, Crypto, and indices. Trading Forex can sometimes be difficult, and oftentimes traders do not generate enough profits. A new trader comes into the Forex sector with the sole aim of making big profits. When they don’t make enough profits hence the question “is Forex a pyramid scheme?”
HERE ARE SOME STEPS ON HOW TO START TRADING FOREX.
1. LEARN ABOUT FOREX
The first thing is to read educational materials about Forex. Forex trading is not complicated, all you need is some information on how the Forex market works. Learn about the market trends and market predictions. Learn about Margin trading and leverage trading. The amount of leverage you should trade with includes pros and cons. Learn how to understand charts and graphs, and also other important trade signals. Additionally, learn how to generate profits in trades while maintaining good risk management. Many trading robots can pop lace trades on your behalf based on your set orders.
2. OPEN A BROKERAGE ACCOUNT
You can always sign up with a Forex broker or purchase your broker. There are several online Forex brokers, and they are cheap and easy to trade with. Most Forex brokers have a minimum deposit as low as $1-50. They hardly charge a commission but they make their gains through pips of spreads. As a new trader, it is advisable to start trading with a Micro Forex account. This account requires small equity with some trading restrictions and different trading tools.
A standard lot is capped at 100,000 currency units.
3. CREATE A STRATEGY FOR FOREX TRADING
Many professional traders today started with demo accounts. A demo account helps you strengthen your Forex strategies, learn and unlearn before moving to live to trade. It helps you learn more about Forex and market trends and how to make profits without depositing real funds.
It is very hard to indicate the forex market trends. But setting up a strategy can enable you to set procedures and successful guidelines in Forex trading. A good forex strategy is based on your trading method and capital. Your strategy should depend on the amount of risk you’re willing to take. However, forex trading is a volatile market; it is not for the faint-hearted. To make gains one has to be willing to take calculated risks.
3. DON’T TRADE WITH EMOTIONS.
When going into a Forex trade, keep your emotions in check. This is the main problem most Forex traders encounter. They are mainly influenced by their emotions. Like when they lose funds they quickly want to recover by lunging into the next trade. They do these without proper analysis and these could lead to more loss of funds.
It is important not to get swayed by emotions when trading. Remaining disciplined and cautious should be the ultimate goal. Whether gaining or losing, your emotional state should be balanced.
IS FOREX A PYRAMID SCHEME?
As an amateur trader, you’re probably wondering “is forex a pyramid scheme?” Well, the answer is no. However, some fake Forex brokers act as a pyramid scheme. The same goes for other markets like Stock, Cryptocurrency, and real estate. Virtually every legal type of investment has been infiltrated by these pyramid schemes.
The Forex market is a highly liquid and competitive environment. In recent years the market has been infiltrated with lots of multi-level marketing schemes. These schemes promise high income and financial freedom. A trader has to be careful with these pyramid schemes, to avoid falling victim.
These companies entice their family and friends intending to generate regular huge income. The program is made to look easy, with just a simple task of signing up. In this article, titled “Is Forex a Pyramid Scheme?” We will be looking at this new investment method, and how it affects a regular Forex trader.
The main aim of these companies is to recruit new investors and generate earnings through affiliate commissions. As the pyramid rise, so does the income multiply. Most people mistake these companies for Forex trading companies. In a Forex trading company, you don’t need to earn an affiliate commission. You will not be asked to recruit new investors. With Forex trading all you have to do is speculate on currency pairs. You make your profits from buying and selling currency pairs.
Any Forex company that requests you to recruit new investors is nothing but a pyramid scheme. Forex trading is not a pyramid scheme, and can never be a pyramid scheme. Pyramid schemes are considered illegal in some countries. However, some lucky individuals have been opportune to make profits from these schemes. Others have been unlucky and have lost millions of funds to these schemes.
HOW A FOREX PYRAMID SCHEME WORKS.
- MORE INVESTORS ARE RECRUITED
These companies claim to offer financial freedom, and lots of money to be earned through Forex. However, it is correct that trades generate income from market volatility. They do not generate any income from recruiting people or affiliate programs. No reputable Forex company will ask you to bring more investors to be offered a commission.
- PURCHASE PRODUCTS
Once you register with these pyramid schemes you are asked to purchase a product. They could be trade signals, trading modules, educational materials, etc. They sell the idea that your success rate increases once you buy the product. Your recruiter gets a percentage of the amount gotten from the products you buy from the company. The earnings keep increasing as long as the downline grows. With Forex trading you cannot earn money from buying products! Earning are gotten from successful trades.
- LOSE AT FOREX
A study has proven that 80% of traders quit Forex trading after two years of active trading. Forex trading is not easy, it takes a lot of patience, and you need to be ready to encounter some loss. The pure fact is not all Forex traders make profits. Recruiters do not state this. A study has shown that about 5-10 % of traders make a good income.
- FOCUS ON RECRUITING
After a series of unsuccessful trades, you lose the zeal to continue trading. In or worst-case scenario you run out of funds. The investors decide to solely focus on recruiting new investors and getting a commission. The new investors form a pyramid, and the recruiter makes more profits.
- SPENDING MORE ON PRODUCTS
In other cases, the previous investors who want to generate more passive income resort to selling more products. They adopt so many methods of doing this. Some sell forex signals to their junior colleagues. Some of these companies also conduct monetized seminars and webinars for their downlines.
Forex trading is seen as a get-rich-quick scheme by many traders. This is not entirely a lie, however, only about 10% of traders generate big profits. The rest traders either give up on Forex trading or opt for Multi-level marketing.
Joining a pyramid scheme is not a crime, but it’s not advisable. When a forex trader resorts to generating income from MLM commission, the true purpose of Forex trading is defeated. The profits obtained are not from Forex trading, because Forex trading is not a pyramid scheme.
This article is not centered on discouraging intending investors of pyramid schemes. However, it’s important to understand how the system works before signing up.
RECOGNIZING A FOREX SCAM
The number one rule to follow in Forex trading is “if it looks too promising to be true, then it is. Keep this rule at the back of your mind before investing in any Forex broker.
Scam Forex brokers have one thing in common; they offer overly large returns on investments. Large profits can be generated from the Forex market, but it comes with a lot of risks. So if a broker promises a large return with little or no investment required it’s a scam! Avoid it.
Think about it, if an individual had a sure way of trading Forex successfully why would they share it? They will hoard it and keep it to themselves to make lots of profits. And if by some luck a generous trader is willing to share his successful trading method. The trading strategy will be well known.
HOW TO AVOID GETTING SCAMMED.
If you are new to the Forex world, it is difficult to pick a reputable broker. This is because you are yet to familiarize yourself with the trading industry. The best way to avoid getting scammed is to only deal with a regulated or reputable broker. Although, this is not a guarantee. There are some cases of regulated brokers acting as a Ponzi scheme or pyramid scheme. These cases are rare, but still in existence.
A real Forex company can be spotted by its features. Most reputable forex companies are regulated by popular regulatory bodies. These regulatory bodies could be
(FCA) the United Kingdom, (FINMA) Switzerland, and a host of others.
MAJOR TYPES OF FOREX SCAM
They are different forms of forex scams, but let’s focus on the four types of Forex scams. Most individuals that sign up to trade Forex always think Forex is a get-rich-quick scheme. Many individuals take the easy route just to generate huge profits. They sign up with brokers who offer huge ROI or very low spreads and end up being scammed. The less greedy ones that sign up with a reputable broker make moderate gains without loss of funds.
These Forex scam companies are always coming up with new ideas on how to defraud people. But Four major ways are being adopted in the Forex Market.
● Forex Pyramid schemes
● Ponzi Schemes
● Forex Signal Scams
● Forex Robot.
FOREX PYRAMID SCHEME
A lot of traders always ask “is forex a pyramid scheme?” You can’t blame them.
There are a lot of fake Forex companies acting as pyramid schemes. A pyramid scheme doesn’t make profits from trading forex, they don’t trade Forex. They make their profits from the funds paid by the new investors. Hence the name pyramid scheme. The second set of investors will convince others to invest so they can get paid as well. The third set of investors is also hired to pay the second set. The higher up a pyramid you are, the higher your returns. A pyramid scheme is a crime by law, and the founder will end up in jail if caught.
There are Forex brokers that are pyramid schemes. They can be divided into two.
● Classic Pyramids
● Fraud Kent Pyramids.
1. Classic Pyramid.
A classic pyramid is structured in a way that a previous victim is paid by a subsequent user. The profit of the previous user is paid from the deposits of the new user. If the company doesn’t register any new investors the income is halted, and the company closed. The deposits made by the previous users remain with the founder.
2. Fraudulent projects.
These companies are the worst. They do not pay at all. They set abnormal requests to end up frustrating their customers. They could ask for additional deposits before you can withdraw your funds. Or they could come up with excuses and stall for some time.
These companies target new Forex traders who are eager to make huge profits in the Forex sector.
HOW TO DETECT A FINANCIAL PYRAMID
There are many ways to detect a Forex pyramid scheme. If you pay close attention to the company you can easily detect them because they are used by cybercriminals.
TOP 5 WAYS TO DETECT A FINANCIAL PYRAMID.
- The promise of high returns
- They have a vague earning method.
- Deceitful clarity on profit earning.
- Missing or incomplete documents.
- High ROI (return on investment) affiliate programs.
THE PROMISE OF HIGH RETURNS
This is one of the most popular ways used in luring investors. They promise unrealistic high returns. These promised profits range up to a thousand percent per year.
These fraud companies appeal to the greedy nature of their clients. Resisting such huge profits might be difficult at times. Therefore, a lot of unsuspecting clients fall victim and get scammed.
THEY HAVE A VAGUE EARNING METHOD.
Their most popular slogan is “to make money, you have to invest money”. Forex pyramid promoters used this phrase a lot. However, they will never explain the source of the profits.
On most sites, you will see things like
- We trade on Forex.
- We maximize your income by trading in different financial instruments.
- Our professional traders invest your funds in the stock markets.
More often than not, these are just lies without any proper proof. No transparency, and proper explanation on how profits are made. When all these are in place, best believe that is a Forex pyramid in disguise.
DECEITFUL CLARITY IN PROFIT EARNING
Another major trick used by these Forex scams is by playing on the intelligence of the trader. Their method is to allocate a manager that will trade on your behalf while you will be given the profits. Most lazy traders always fall victim to this. They want the profits but are not willing to do the work.
For these statements to be taken seriously, it has to be confirmed. For instance, the manager’s real identity should be disclosed. Most Forex pyramids do not disclose the names of their team members.
MISSING OR INCOMPLETE DOCUMENTS
Any financial organization must be regulated by the state or country they provide their services. And the authenticity of this regulation is verified by documents. If the company does not provide legal documents backing its claim, avoid it.
HIGH ROI (RETURN ON INVESTMENT) AFFILIATE PROGRAMS
Another sign of a Forex pyramid is a company that pays high interest for affiliate marketing. Their main aim is to garner many investors to defraud. They promise huge interest bonuses for old users who successfully register new users.
These companies operate by ranking their customers based on the number of new registered clients under them.
You’ll see something like this
Level 1 Direct invites 15%.
Level 2 Users invited by your downline 10%.
Level 3 Users invited by your online partners 5%.
Each level has a specific bonus percentage attached to it.
FIVE TIPS ON HOW TO AVOID FOREX SCAMS
As a new trader having doubts and thinking “is forex a pyramid scheme?” Here are some ways you can avoid such pyramid schemes disguising as a Forex broker.
- Check the documents of the company
Checking out the company’s documents is very crucial. Conduct a thorough investigation and endure the documents are valid.
- The state where the Certificate is registered.
- Financial license
- Legal address.
The registered License and certificate should be displayed on the website as scanned documents. They could also provide links to the governing websites. The company should be licensed by a popular and reputable regulator. Regulatory bodies such as the USA, UK, and European Union countries.
- CHECK FOR REVIEWS ON THE COMPANY.
Customer Reviews are very necessary during a company survey. Users not only describe their experience but also you might pick something you missed. There could be some questionable terms and conditions stated that you might have missed.
However, if the company does not have a review, that is a major red flag. Avoid the company. A good and reputable company that is time-tested needs to have reviews from its users.
Many pyramid schemes publish their reviews on their sites. They are not to be trusted. Their reviews should be on a neutral website like TrustPilot or Traders Union. You can always find objective and real reviews on these sites.
- ARE THEY TRANSPARENT WITH THEIR SOURCE OF PROFIT?
Most scam companies always provide huge returns without actually stating how it’s gotten. They hide their data on how they operate and just provide profits. Most traders turn a blind eye to this because they are probably getting their returns. Before investing, make sure the company is transparent on how it generates its income.
The investment platform needs to strategically pinpoint how it plans to generate income with the allocated funds. If it is a Forex company, ensure that they provide the currencies being bought and sales performance.
- MAKE SURE THE COMPANY HAS CONTACTS
Any company you sign up with should have available contacts for communication. Most of these pyramid schemes only provide an email and a form to fill.
Before investing in any company check out for these features:
● A physical office address.
● An email address.
● An available phone number.
● An active social media account.
Before investing, it is advisable to check out all the contacts given. Ask questions and also ascertain the level of Forex knowledge.
- REVIEW THE INTERNAL DOCUMENTS PRESENTED BY THE COMPANY
An authentic internal document for a reputable broker should consist of the following:
Terms and Conditions
These documents comprise lots of important data.
Points to note in these documents:
- Blocking of a user account without prior notice.
- Banking of withdrawal funds without any concrete reason.
In cases where the company contains some of the above mentioned, it is a red flag, avoid it.
- ASK FOR PROOF OF PROFITS
Ensure to ask for proof of profits by verified trading documents. They should have data to back up their claim. If they promise you 100% profits they should provide data to back up their claim. A popular website where you can check a company’s data is myfxbook.com.
Don’t provide your data or financial information to strangers either online or offline. Irrespective of how convincing the person is, they will try to deceive you, don’t fall for it.
- DO A THOROUGH RESEARCH
Always do thorough research. If you see any red flags, avoid the company. Finding a real and reputable Forex broker is not hard. Online technology has made everything easy. Many regulated and reputable Forex brokers can be found online.
- TRADE BY YOURSELF
Trading by yourself is the best bet. However, learning how to trade Forex might be difficult and time-consuming but it is worth it. It is the best way to avoid all these scammers. You can learn how to trade Forex by reading up several articles on Forex trading and forex trading for beginners.
In addition, make sure all the internal documents are presented by the company. Most companies do not provide all the required internal documents. If you come across a company with incomplete internal documents, avoid it. It is a clear sign of a pyramid or scam company.
FOREX PONZI SCHEME
Ponzi schemes are fake investment methods. It is a little bit different from a Pyramid scheme. People are enticed by the company to invest in the scheme. The founder of the company claims to be a professional Forex trader. They are promised profits at the end of the month or week.
With a Ponzi scheme, there is no investment. The founder of the scheme pays out the first set of investors. This profit given out is not gotten from any investment made. Rather, it is gotten from the funds paid by new investors. If new investors keep coming, it’s business as usual. However, if new investors aren’t forthcoming the company closes down.
HOW TO DETECT A FOREX PONZI SCHEME
Listed below are the 5 top ways to detect a Ponzi scheme.
- The pressure to reinvest.
- The pressure to act now.
- Abnormal High Return on investment.
- Guaranteed returns.
- Consistent high yield.
- The pressure to reinvest
A typical Ponzi scheme will crash if there are no new investors. They always entice their investors with bonuses and rewards if they reinvest, or if they bring in new investors. They make you believe that reinvesting is a sure way to keep your money safe. This is a lie, your money is not being invested but rather used to pay investors withdrawing their capital.
- The pressure to act now
Ponzi schemes are known for putting up mouth-watering bonuses with an attached deadline. If you don’t act now you might lose a once-in-a-lifetime opportunity. This is nothing but just a ploy to get investors’ money tied down. Some greedy individuals might fall victim. This is why it is important to set your greed aside when investing in a trading firm.
- Abnormal high return on investment
The most evident sign of a Ponzi scheme is the abnormal promise of high returns on investment. You will see a company promising a 50% ROI in a month. This type of ROI is not feasible with a company that is doing a legal trade. No amount of trade can guarantee a 50% profit. Any company promising such high and unrealistic returns is a scam company.
- Guaranteed returns
The word guaranteed is used to lure investors. No man-made company can guarantee you lifetime returns on your investment. Even the most reputable companies still run into unforeseen problems. They appeal to the greed of the investor and hope they will fall for their tactics. Avoid any company promising guaranteed returns on your investment. It’s a lie, nothing is guaranteed, not even the life we live.
- Constant high yield
Every investment platform always has a good time and a bad time. But with these Ponzi schemes, it’s always a good time. Their statistics will show that they are always earning and never losing. This is a huge red flag. They are never transparent, and in most cases, those statistics are fabricated.
WAYS TO AVOID A FOREX PONZI SCHEME
Avoiding these Ponzi schemes can be difficult. Some Ponzi schemes disguise themselves as a forex company and lure investors. Most times investors are oblivious until after they sign up and invest.
LISTED BELOW ARE 5 WAYS TO AVOID A FOREX PONZI SCHEME.
- USE ONLY TRUSTWORTHY FOREX BROKERS
When signing up with a Forex company, make sure the company is regulated. Using a highly regulated broker saves you from a lot of issues. Most regulatory firms ensure the safety of customers’ funds. And they also have rules and regulations put in place to protect the trader’s interest. Any company that is not regulated is a big red flag. It means they can’t be trusted. However, there are still some regulated companies that would scam you. To avoid this, ensure you do a wide range of research about the company before signing up.
- CONDUCT A THOROUGH RESEARCH
Make sure to do a thorough survey of the company. Analyze the operations of the company, ask questions to ascertain their claims. And make sure all the documents presented are valid and original.
- TRUST YOUR INSTINCTS
If you feel skeptical about the investment, then it is. Trust your gut, any investment that looks too good to be true is not to be trusted. If your instincts kick against a company, do not sign up.
- DON’T BE IN A HURRY
Don’t be in a hurry to generate profits. Rome wasn’t built in a day. Take your time, understand how the Forex market works. Read educational articles on Forex trading. Learn about the Forex strategies. Avoid any company that tries to pressure you into investing funds.
- DON’T BE GREEDY
This is the number one emotion that kills a good Forex trading strategy. When signing up to become a forex trader, set greed aside. Most new forex traders see Forex trading as a get-rich-quick scheme. This is not the case, because it takes patience and consistency to generate big profits in the Forex industry. Most times, these scam companies always put up enticing figures to lure greedy traders. They promise high yield returns and the greedy ones always fall, victim.
FOREX ROBOT SCAM
A forex robot is computer software designed to execute trades on behalf of the trader. It is structured to place and close trades for traders. However, the trader has to input some particular orders that the software has to follow. The most popular Forex robots are the MeterQoutes software. They are called the EA’s short form of Expert Advisors. There are two main types; the MetaTrader 4 (MT4) and the MetaTrader 5 (MT5). They are legit Forex robots that make profits for traders by trading for them.
A Forex robot can never be smarter than its inventor. All these Forex Robot creators are looking to make easy money. They are not concerned about the welfare of the buyer. They only care about is their gains. Forex trading is a highly unpredictable market. To automatically place a trade you need a live person who understands the ways of the market.
A Forex robot is considered a scam when these robots are created for dubious means. The creator knows it cannot generate any successful trade yet sell it to traders. They promise traders huge profits but never deliver. The most common method used by these fake Robot creators is curve-fitting. Finding a past trading method is easy. They design these robots to make trades using past trading methods. But the world is constantly changing and evolving. After some time the past methods won’t be useful thereby, rendering the forex robot useless. And in most cases, the past never repeats itself. No trade performs exactly like the last time.
HOW TO DETECT A FOREX ROBOT SCAM
Listed below is some information used to detect a scam Forex robot.
● Fake Marketing messages
● Undiversified Scalping Strategies
● Very unrealistic Percentage yield Returns
● Unregulated Brokers
● Verified Results
● Private Results
● Last Update
Fake Marketing messages
Avoid any marketing messages that state how the Forex robot is a dream come true for traders. If the creator of the forex robot states that the software will help you make big profits, without any result to back it, it is probably fake. Do not believe mare words, there must be results to back it up. However, note that no forex robot can guarantee you 100% profit. If their claims are too good to be true then it is.
Undiversified Scalping Strategies
Some Forex robots offer scalping strategies. This means that the Forex robots make small profits. But in some cases, the fake robots show a high win rate to the new investors. Thereby inflating the results during favorable conditions. However, keep in mind that the Forex market is constantly changing. The market is volatile and not always favorable. All it takes is one bad trade to wipe off your entire funds.
Very unrealistic Percentage yield Returns
Several forex robot creators claim to make big profits for their investors. They display up to 4000% gains in a year. Too good to be true right? Yes, it is! These statistics are unrealistic. The returns being shown could be falsified figures that never change.
Any Forex robots that use an unregulated forex broker should be avoided. There are Forex robots that display good results, but trade with unregulated brokers. These Forex robots should not be trusted. Every reputable Forex robot will always trade using a reputable and regulated broker.
Myfxbook.com offers investors a platform to check the trading results of any website or company. Here is the thing to check out for:
● Verified Results
If the result of the company is not verified they are not to be trusted.
● Private Results
If the company keeps its statistics private, it’s a red flag. A good company with nothing to hide can’t keep its statistics private.
● Last Update
The company’s chart must be up to date. A few hours or at most 4 days old. However, if the statistics were updated one month ago the results are not reliable. The results are outdated and should not be taken into consideration.
WAYS TO AVOID A FOREX ROBOT SCAM
- Make sure to sign up with a reputable Forex robot that uses a regulated broker.
- Ensure that all documents presented by the company are legit.
- Do your research, read up the reviews of previous customers.
- Make sure statistics provided by the forex robot are not static. They have to be updated in real-time. If they provide old results, they should not be trusted.
- A good forex robot must be transparent with its data. And not inflate results.
FOREX SIGNAL SCAMS
Forex signals buy and sell alerts of the Forex market. This scam method is similar to that of Forex robot scams. They are subscription services paid to receive trade signals about the Forex market. There are real Forex signals and there are fake Forex signals. Most people that sell Forex signal services post some restrictions for the buyers. There are authentic sites that sell real forex signals. But in most cases, this is not advisable. Signal service should be taken as a precautionary measure a trader should take. If the signal is so good why is it being sold? Why can’t the signal provider use it?
Note: if the promised profit is too good to be true, then it is too good to be true. Always trust your instincts.
TIPS TO MAKE MONEY TRADING
Options trading is a great avenue for making money. The risk involved is minimal, with little capital. There are numerous tips on how to have successful trades. Most new investors pick options trade because it requires little capital as compared to stocks.
The key to having a successful trade is patience. Starting with little risk, in the beginning, will eventually lead to big profits. A first-time trader should start with little lost size. As they progress in the trading world they can increase their lot size. As a new trader placing a big-sized trade is not advised.
However, some traders treat options trading as a quick source of income and become too confident. It is advisable to always do thorough research before going into a trade. A trader must be constantly informed on the recent market trend. Make sure to analyze how the market is affected(negatively or positively) by the economic events. All this information can be found online.
Furthermore, as a new trader, you need the help of a broker. A broker provides you with all the necessary tools needed to make a successful trade. Most brokers provide a wide range of educational materials. These educational materials will help guide you in your trade journey. Ensure to sign up with a reputable broker. A regulated broker is highly advised. Make your findings of the broker before signing up. Signing up with a non-regulated broker is a bad idea. If an issue arises in the future, you will not have legal support.
In conclusion, the correct answer to the question “is Forex a pyramid scheme?” is No.
The percentage of successful forex traders is lower than the unsuccessful traders. Most of the unsuccessful traders opt to recruit new investors to make up for lost funds. This is what brings confusion, as new traders being recruited end up thinking that’s how the Forex market works. The fact is profits can be made from both ends, but the latter is not sustainable. The profits gotten from the pyramid scheme are not reliable, if investors stop registering; the company will suffer a setback. It’s is advisable to learn forex trading and perfect your trading skills.
The Forex market is a highly volatile market that is unregulated. The Market is highly affected by the economy of the country. It is advised to always trade with reputable and highly regulated brokers to avoid getting duped.
This article is a detailed guide on how to avoid all these Forex pyramid schemes. How to detect a pyramid scheme; how to choose a reputable broker, forex signals, and forex trading tools. Hopefully, this article helps you grow your Forex portfolio.