How legal is Forex Trading?
Have you ever been on social media and gotten a message from a stranger asking if you want to connect on a business level? Typically, these sound as shady as scammers congratulating you on winning the lottery. However, this scam is a lot more “sophisticated.”
Forex Trading is advertised as a way of getting rich quickly. The only problem is you must really understand what you are doing.
And even at that, you’re still not guaranteed a profit. Forex Trading is a complicated matter. People with PhDs, working in trading their whole lives, can’t beat the system. What traders are doing on social media platforms is persuading you to join a pyramid scheme. You are invited to join an “Academy” where you will be taught how to trade on the Forex market. You will be asked to make a payment to join the academy and a monthly subscription fee.
Most importantly, you will be asked to recruit your friends and family as new members. You’re enticed to do this by promising that you will be rewarded by receiving payment for each member you recruit. This filters through the entire academy. This leaves the people at the top of the pyramid receiving the most profits. While the people at the bottom fight for scraps.
This YouTube clip tells the story of another investigation into the legalities of Forex Trading. For more insight, check it out!
In order to go in-depth on the matter of trading, we sat down with Matthew Colclough, a VP at Fisher Investments. Fisher investments is a multi-billion dollar investment firm. Matthew strongly disagrees with the actions of Forex traders and their sales techniques, coercing the helpless into paying for their service. Here’s just some of what Matthew had to say:
Q: Why is Forex Trading dangerous?
Matthew: So, when you’re talking about investing – the Forex market is a lot more volatile. Which means the downside of investing is more severe.
Q: What is a Pyramid Scheme?
Matthew: A pyramid scheme is essentially a scheme where people go and sell a product to others and then those people go and sell it to others too. The people at the start reap most of that benefit. So, for example, Forex is a pyramid scheme because these people are working on behalf of brokers and websites. These websites are offering services such as copying people’s trades. So what happens is I’ll go out and get four of my friends involved and then they’ll go out and get four of their friends involved but that magnifies so the people who signed up first will reap most of the benefits and the people at the bottom of these pyramids tend to get stung.
Q: Can you explain what a Forex Academy is?
Matthew: So the HFX Academy, for all intents and purposes, is you could say, an “educational platform”. People upload educational videos and tutorials. They show you how to trade or how to copy other people’s trades. So essentially this is a platform to educate their users, but in this case, the users have to pay to get on the platform.
“These people promise you the sun, moon, and stars, and if it were that easy, everybody would be doing it.”
“Put it this way – if these people are taking time out of their day to speak to you, then that means you are the product. They’re not doing this out of the good of their faith. They’re doing it as a business proposition.
“The thing about Forex Academies is that you’re selling them a product that isn’t guaranteed to work. So basically, they’re selling you a sh#t product, and they’re setting you up to fail.”
You can listen back to the full conversation below: