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I know it takes time and experience, but you can earn thousands of dollars every year with forex trading. However, there are also scammers out to steal your hard-earned money. This is why you should know what a forex trading pyramid scheme is before making the decision to start forex trading.
The recent emergence of forex trading has allowed many traders to take advantage of the high volatility of the forex market. Inherent with this approach is a certain degree of risk, which some people, mistakenly or otherwise, assume is only limited to potential financial losses.
In reality the real cost is not just monetary but also emotional and psychological. It is for these reasons that it is essential for any individual who is interested in forex trading to fully understand exactly what a forex trading pyramid scheme involves as well as what it means for them, their future and their families.
One of the biggest scams that is perpetuated by the brokers and financial gurus is referred to as a pyramid scheme.There are a number of startling laws that are passed every year and dozens more being considered on a global level due to this one fraudulent activity.
But how do you know if you are with a trader who is operating in cahoots with illegal pyramid schemes? Can forex trading really make you rich? Yes, it is possible. However, it ain’t gonna happen overnight… or even in a year. What are the REALities of forex trading?
- What is forex trading pyramid scheme?
- Is trading a pyramid scheme?
- How is forex a pyramid scheme?
What is forex trading pyramid scheme?
Forex pyramid scheme is a scam that attempts to lure new investors into a fraudulent money-making venture. In reality, there is no investment opportunity at all. Instead, the focus of a pyramid scheme is to attract as many new investors as possible in order to pay off existing ones.
The first investors are paid off with money from new investors, who then become eligible for their own payouts when they recruit more people into the scheme. When no more new investors can be found to replace those who have exited the pyramid, the scheme collapses and everyone is left without any money.
The name “pyramid” refers to how these schemes grow over time. New recruits form layers at the bottom of the pyramid while earlier investors are at the top receiving payments from those below them in return for bringing them into the scheme.
Forex trading pyramid schemes are the worst kind of scam. It’s one thing to lose money on a bad investment, but it’s another thing entirely to be ripped off by someone else.
Pyramid schemes are illegal and involve promising huge returns for little or no work. It’s also called a Ponzi scheme if you’ve heard that term before. In this article, we’ll explain what forex trading pyramid schemes are and how they work so you can protect yourself from them in the future.
Read more article: Learn Forex Trading Step by Step
The Basics of Forex Trading Pyramid Schemes
Pyramid schemes form when someone convinces people to invest in an investment opportunity with promises of huge returns. The person running the scheme then pays out early investors with new investors’ money until there aren’t enough new investors coming in.
At that point, all investors will be left empty-handed and the person running the scheme will have disappeared with their profits (and possibly their investor’s money too).
A forex trading pyramid scheme is just like any other pyramid scheme except that it involves trading foreign exchange currencies instead of selling products or services like most real businesses do. The “investment” usually involves buying shares of foreign currency contracts from an investment company.
In reality, however, these schemes usually collapse quickly because they must rely on a constant stream of new investors to pay the promised returns to earlier participants in the pyramid.
The typical forex trading pyramid scheme involves several levels of participants. The top level consists of a small group of individuals who actually run the scam. They recruit new investors and receive a commission when they make deposits into the scheme.
The second level includes those who recruit others into the program and receive commissions when those individuals make deposits as well.
Third-level participants are those who have recruited others into the program but do not receive commissions from them directly; instead, they pass along part of their own commissions from earlier recruits to their downline members.
Pyramid schemes often use aggressive marketing tactics such as spam email campaigns or spam text messages in order to reach potential investors. They may also use social media platforms such as Facebook or Twitter to spread information about their fraudulent investment opportunities online.
Read more article: Get Funding for Forex Trading
Is trading a pyramid scheme?
Pyramid schemes are illegal. They usually promise high returns for little investment and involve a network of people who pay to join and help promote the company. The company makes money by getting new recruits to sign up, not from any real investment or sale of products.
In this way, trading is not a pyramid scheme because it involves real investment and selling of goods or services. Trading is regulated by the Securities and Futures Commission (SFC).
This means that traders must meet certain rules before they can trade in Singapore. Also, traders must have enough capital to invest in their trading account and not just rely on other people’s money for their trades.
Read more article: Foreign Exchange Market Definition
Is trading a scam?
Trading is not a scam because there’s no guarantee that you’ll make money from day one – just like any other business venture.
You need to do your research before jumping into trading and learn about asset classes and strategies before making any decisions about investing your hard-earned money into it.
If you’re interested in learning how to trade but don’t know where to start, take a look at our Beginner’s Guide to Trading page!
More on this! If a company offers to pay you for recruiting new members and making money from the sales of those new members, it’s a pyramid scheme.
If you have to pay a fee to join, it’s most likely not a pyramid scheme. If there is no fee, be wary of claims that you’ll make money by selling products or services or recruiting others into the program.
Is trading a pyramid scheme or Scam?
No. A pyramid scheme is an illegal business model that has been around for years, but recently received attention because of its popularity on social media sites like Facebook and Instagram.
In a typical pyramid scheme, people are encouraged to recruit others into the program as a way to earn money. Those at the top of the pyramid get paid by those below them in the pyramid who are trying to earn money by recruiting more people into the system.
Pyramid schemes can’t be sustained because they require ever-increasing levels of recruitment in order to pay off those at the top of the pyramid; eventually there aren’t enough people left out there who haven’t been recruited yet, so they collapse under their own weight.
How is forex a pyramid scheme?
The answer is that it’s not. The forex market is a legitimate, albeit highly speculative, way for you to make money. It isn’t a scam.Forex, or foreign exchange trading, is the largest financial market in the world. Every day, $3 trillion in transactions take place in this market.
There are many reasons why so many people are attracted to it: It’s open 24 hours a day, 5 days a week (Sunday though Friday). This means you can do your trading at any time of day or night.
It’s available from home or from anywhere in the world via the Internet or mobile phone app. You don’t need any special equipment or training to get started in forex trading (as opposed to opening up your own business).
It can offer high returns on investments because of leverage (borrowing money) and low transaction costs (commissions). Forex is a zero-sum game where most people lose money. The only way to win is to take money from other people.
Forex brokers charge high commissions for every trade, and you lose money on every trade that has a negative result. There are no rules in forex; there are no regulators, no laws, nothing to stop companies from stealing your money or defrauding you.
The reason some companies are successful is because they put effort and time into their business and they attract good traders. These traders make money while they refer it’s other members.
So when you look at a forex trading pyramid scheme ask yourself this question, “will I make more money being a member or referring members?” If you can’t answer the question with a yes then the company is not an opportunity that is worth your time.
The reason I believe this will be a great business for me is because I have personally been invited to start in 3 other successful businesses over the last few years and I have turned them down because I did not believe in the company.
So a formula for me to succeed would be if I only promote companies that I believe in and would buy from myself, so for me this doesn’t feel like a job but another opportunity I may take advantage of eventually.
Online trading has been growing at an enormous speed. The truth is that many people are taking the plunge into the world of online trading. However, the question remains:
Are you aiming for a fast buck with one of these forex-trading pyramid schemes or is there a real opportunity there? The answer to that question depends on how you define “opportunity.”
Most of these companies will not be pyramid schemes, but you will want to research their business model thoroughly before entering into any sort of contract.
It is also important to note that many of the firms who provide bonuses and other incentives to new traders will expect them to share the profits from their trading activities back with the firm.
You should never have to put any money up in order to open an account with a trading firm or make a profit from your trades. If it sounds too good to be true, that’s probably because it is.
Read more article: Foreign Exchange Market Today
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