What is a pyramid scheme? Pyramid scheme is one of the scam methods that people are using to lure other people into giving money to them using the chain referral method. With the pyramid scheme, you will need to recruit new participants to earn sign up money from them, and then the new participants need to recruit other participants, so they can also earn money. You will go up your level the more downlines or new participants you are recruiting. Here are some characteristics of a pyramid scheme:
- It doesn’t offer any products to sell. With the pyramid scheme, you will not sell any product. You will only offer investment opportunities for the new participants, and then the new participants will do the same to create the pyramid-type of downline network.
- The emphasis is on recruiting downlines. Downlines are the people you recruit, which will get positioned below you in the pyramid scheme. In this fraud system, the emphasis is on creating downlines, so you can go up the pyramid network. Once you are on top, you will earn your income from your downlines.
- The promise of a massive return on your investment. Pyramid schemes often promise their participants a massive return on their investment. No matter what type of investment product they offer, they will promise you plenty of profits just from the small investments you make.
No, Forex is NOT a Pyramid Scheme!
When you look at the characteristics of a pyramid scheme, you can’t regard forex as a type of pyramid scheme, as forex is a valid investment opportunity with valid markets you can follow on a global network. Just like any other types of online investments, forex offers you the opportunities to trade or invest in currency pairs and make profits out of your investment in the forex market. So, no, forex is not a pyramid scheme.
With forex trading, you will need to put your investment on your forex account, which will get managed by the forex broker platform. You will use your forex account in your daily forex trading activities, such as when you request the bid and ask price on certain currency pairs. You will also use your forex account to use various features offered by the forex broker platform, such as leverage, margin, and copy trading.
Things You Need to Avoid before Starting Your Forex Trading Endeavor
Despite not being a pyramid scheme, there are still various frauds that you can find online today, which use forex as their investment opportunities. This is the reason some people consider forex to be a fraud or a pyramid scheme trick, since there are some fraudulent people who are using forex to scam other people online. This is something you need to keep in mind before starting your forex trading endeavor, even more so if you are just a beginner in the forex trading scene. Here are some things you need to avoid before starting a forex trading endeavor:
- Fake forex brokers. In the forex trading scene of today, you can find many fake forex brokers who will entice you to use their services. In the end, you will deposit your money on their platforms, lose all your investment, or it might be impossible for you to retrieve your funds later. These fake forex brokers are rampant today, so you need to keep in mind about these fraudulent brokers.
- People who will promise you big money with forex. Forex is an investment opportunity, just like any other online investment opportunities, such as stocks and cryptocurrencies. With forex, you will need to put some initial investments, but you can’t expect it to bring you massive profits in a short period. You will need to use your investment funds with forex in the right way if you want to earn some good profits from it.
- Illegal forex trading platforms. Forex is not legal in all countries around the world today. So, if you live in a country where forex is illegal, you need to watch out for some illegal forex trading platforms in your country. These illegal forex trading platforms will allow you to trade in the forex market, but it will be quite impossible for you to withdraw your earnings later.
- Other scams related to forex. There are many other scams related to forex that you can find online nowadays, such as the binary option fraud, which uses forex as the basis to scam the investors for their fraudulent practices. You also need to keep in mind various other investment opportunities that promise you to get rich quick with forex, such as by using high-risk forex trading strategies, forex robot trading, and many others.
How to Spot Scam Forex Opportunities
Forex trading itself is a legit online trading and investment opportunity you can use to earn some good profits from your investments. It has the global markets that you can follow, and each trading activity gets monitored by each forex trading platform. However, there are also some forex scam opportunities you need to avoid. Here are some tips on how to spot scam forex opportunities:
- Keep it rational and realistic. You will need to keep everything rational and realistic when looking at any promise you get from forex brokers or any other people who claim to have any expertise in forex. Exaggerated claims of massive profits will often lead to frauds and scams.
- Legal and regulated forex broker. The forex broker you are using needs to be legal and regulated in your country. Otherwise, you are dealing with illegal and non-regulated forex brokers, which often leads to scam forex opportunities.
- Easy deposits and withdrawals, with fund security and privacy guarantee. The forex trading platform you are using also needs to allow you to deposit and withdraw your funds with ease, with no restrictions. Also, your funds need to have a guaranteed security and privacy from the trusted financial institutions in your country. Dealing with the forex trading platform that won’t allow you to withdraw your funds means you are dealing with the scam forex opportunities that will only cause you to lose all your forex investments later.
Forex is not a pyramid scheme. However, you need to keep in mind that there are also many scams and frauds in the name of forex, which might cause the misperception and misunderstanding about forex for some people.
It’s important for you to deal only with legit forex broker platforms when you are conducting your forex trading activities, so you can guarantee your profits in your endeavor. Good luck!