By definition, a pyramid scheme represents a risky ‘get-rich-quick’ business model that recruits members through promises of payments or services to enroll others into the scheme rather than supplying investments or selling products. If there is a business based on marketing and promotion, pyramid schemes can exist. Maybe you often hear and even wonder is forex trading a pyramid scheme? Read on to know the answer!
Is forex a pyramid scheme?
Forex trading is not a pyramid scheme. Forex trading is a legal business whose main purpose is buying and selling currency pairs and not pyramid stock marketing to list other people in the forex business. However, pyramid schemes can exist if scammy sites promote forex products using multilevel marketing. Traders can avoid MLM forex pyramid schemes if they use a regulated broker and learn to spot scam ads. You can find all the reports regarding trading on well-known websites, one of the best is tradersunion.com.
So, How Do Recognize A Pyramid Scheme?
Unfortunately, many people tend to create vague and false rumors about forex. Some might even say that forex trading is a pyramid scheme. But, in reality, that’s not true! Forex trading never follows a pyramid scheme. The best part is that forex trading gives you complete control so you can hit the buy or sell button according to your personal decision. You have full privileges to close the desired trade according to your preference. As a trader, you can carry out a comprehensive analysis of the available forex signals and choose the most profitable positions that can help you earn an income.
How to Avoid Forex Scams
The best way to avoid investment scams is to use your time. Don’t rush into a decision and make sure to assess all the pros and cons first. Finding a trusted Forex broker is not an easy task, but in the long run, you will benefit from investing your time. The first step you should take when you find a Forex broker or agent is to do a Google search for their business name.
Look for customer reviews on trusted websites. If there is none of the brokers look like a scam, you should stay away from that service provider. Apart from that, you can browse forex scam reviews and see if the Forex broker is as reliable as it promises. Also, be sure to find out if any legal action has been taken against the broker.
For example, you can:
• Visit Forex forums and see if there are any complaints about withdrawals, and if so:
• Make contact with the user who posted the complaint and ask for additional details.
Maybe the user misunderstood or misunderstood, but it never hurts to ask. A proper background check will also minimize your risk.
Stay Away From Forex Scam Opportunities That Seem Too Good To Be True
Easy money? Impossible! Don’t believe anyone who tells you it’s easy to make money with something like ”20% profit per month”. This is bullshit because trading Forex & CFD (contract for difference) requires a lot of monitoring time, education, patience, and intelligence to make a profit. No easy money is made here. If you dedicate your time and learn how to trade properly, then you may get an additional source of income.
Further Steps You Can Take To Protect Yourself From Forex Scams
Be sure to compare the regulations of the regulatory authorities with the provisions on the broker’s website to find if there are any inconsistencies or irregularities in the broker’s terms. If you don’t trust your judgment, or you don’t have the time, seek advice from a licensed financial advisor. In addition, you can request proof of business registration before registering with a broker. Be sure to read all terms and conditions when opening an account. Sometimes forex scams use bonus funds as an excuse when it comes time to make a withdrawal.
As an example:
• If you receive bonus funds and wish to withdraw them, forex scammers may deny you rights due to their terms and conditions.
Don’t forget that when you start trading life, always trade in small volumes for short periods at first, and then try to make withdrawals. If all goes well, then it is safe to save more funds. Demo account availability is another indicator of a good or bad broker. If you are not offered this option or prevented from demo trading, this is a strong indication of a forex scam.