There have been many debates about whether Forex is a pyramid scheme. In other words, there are people who say that it is not. These arguments usually revolve around the definition of the word “pyramid”. The main question is why pyramid scams are bad or not important. The answer is both, yes and no.
Forex is not a pyramid scheme in the strictest sense of the word. It is true that the majority of traders fall under the model and that most people involved in the forex-trading business are, indeed, engaging in what is called “pyramiding”. The main function is to recruit more new members; and therefore, revenues are generated through affiliate commissions. However, as the pyramid gets larger, the profits also get larger Forex a pyramid scheme. The authors often do not mention if one can actually make money through pyramid scams.
Forex is much like other investment opportunities. You can buy into a Forex brokerage firm and learn how to trade there. You will be offered a variety of training materials and you may even have a professional on staff to help you. However, you will not be allowed to recruit new partners on your own. This is where the danger of Forex pyramid schemes comes into play.
If you take the time to do your homework and learn about the various investment opportunities, you can avoid falling into the traps of Forex scams. You should be aware that not all trading firms are scams. There are some pretty good companies out there with legitimate professionals who are willing to help new traders understand the ins and outs of Forex trading. In fact, the best way to become a successful trader is by having a mentor to teach you what he knows about Forex trading.
Other Forex scams are put into place by novice traders who try to make money off their inexperience. They believe that they can shortcut the learning curve with the promise of high commissions. You will find that inexperienced Forex traders will start with a very small investment. As time goes by, they will increase their investments until they have enough to quit their day jobs. When the company realizes that they are losing money, they will de-value the currency that they hold, delist it from the market, and then try to sell it off.
It is important to realize that there are many legitimate ways to earn money through Forex exchange. A great many of these opportunities can be described as the “perfect job”, and many of them can be considered a “dream job”. If you are looking for a lucrative way to make money in your spare time, Forex is a good place to start. However, forex scams are unfortunately common place. Many people will give up on the market before they realize that they have been tricked.
The best way to avoid forex pyramid schemes is to become educated about the investment opportunity. Education is the first step towards avoiding any investment opportunity that does not offer you a step-by-step plan to investing your money. Education will also help you learn how to spot legitimate financial service providers. There are many websites that offer helpful information, tips, and education for newcomers to the investment world.
Finally, my last piece of advice is to avoid any investment opportunity that promises you that you can retire young. Legitimate financial service providers will not promise you anything. As with any other investment, when you find that the company is pyramid schemes, avoid the opportunity like the plague. Remember – education is the key to avoiding forex scams. Educate yourself!