Is trading a scam?
“Learn how to get rich in less than a month”, “Do you want to earn 200 dollars a day”, “Learn how to earn money from home in a short time”. Typical phrases that are commonly heard in advertisements and trading promotions. However, many are far from being a reality in trading.
Simply put, trading is not a scam, remember that it is simply the action of buying and selling assets in the financial markets, with the aim of making a profit. However, each year, the trading industry has seen exponential growth, so more and more people want to change the way they generate wealth through the financial markets. With this growth have come individuals and companies charged with scamming through false illusions of fleeting and effortless wealth.
The most common example of trading scams is linked to high disinformation, which we discussed in the Trading and Misinformation blog. Because in many cases people believe that trading consists of introducing people and making money from each person obtained (pyramid) or that by investing small amounts of money, such as 20 dollars, in less than a few months you can increase your capital to more than thousands of dollars.
Despite all the dangers that exist for novices in trading and investing due to scams and misinformation, trading is a valid opportunity to generate an important source of income if you have knowledge and experience in the markets.
In order to operate in the world of trading safely you should consider:
1
Large and Trusted Broker: the broker is the one that allows people to operate in the market, is the intermediary entity that executes orders to buy and sell. There are many that invite you in an invasive way to invest your money with them, and even tell you that you have the opportunity that they themselves will give you the signals or invest your money for you at no additional cost. Most of these invitations start with winning signals to get the user to deposit larger amounts of money, and upon gaining the user’s trust, do not allow the user to withdraw their money. Other brokers simulate the market, which means that the trader is not actually interacting directly with the market; some of these may be well intentioned, but others manipulate the data, leading to losses on your trades and thus taking your money.
Before registering and depositing your money with a broker, evaluate the broker’s regulations and trading licences. For example, if you are trading stocks, if a regulated broker goes bankrupt or closes down, your assets are still safe and your money is still protected.
2
High Profitability: as explained in the Trading and Disinformation blog, you should be wary of any promise that tells you that you will have, with a small investment, returns of 100, 200 or 500%. Moreover, that our investment is 100% safe, this is totally impossible, since it is not possible to ensure a fixed return without any risk.
How to choose a trading academy? https://swiset.com/es/academia-de-trading/: a good academy can guide us not to fall into scams and know what really is the world of trading, but a bad academy can lead us to further misinformation, making people believe that by entering your academy will earn hundreds or thousands of dollars every day in trading, which is not something consistent over time.
Pyramid strategy: in academies or brokers, they invite you to bring people, for each person they give you an amount of money, and if that person brings more people they give you an additional amount of money, and so on. This path eventually turns into a pyramid, where at any moment whoever is at the top decides on the capital of the others, and people do not really focus on learning about the financial markets, but on how to attract more people to their referral pool.
3
How to choose a trading academy: A good academy can guide us not to fall into scams and to know what really is the world of trading, but a bad academy can lead us to further misinformation, making people believe that by entering their academy they will earn hundreds or thousands of dollars every day in trading, which is not something consistent over time.
4
Pyramid Strategy: in academies or brokers, they invite you to bring people, for each person they give you an amount of money, and if that person brings more people they give you an additional amount, and so on. This path becomes a pyramid at the end, where at any time whoever is at the top decides on the capital of others, and people do not really focus on learning about the financial markets, but on how to attract more people to their set of referrals.
– In conclusion, in order not to fall for a trading scam, do your own research about every broker you are interested in, every platform, every person or academy that invites you to generate profits from trading. Always remember to be suspicious when they mention fast and absurdly high returns in a short time.-.
David Fiat
DevOps Engineer - MLSA - Flutter Developer
