Forex trading is not a pyramid scheme. Forex brokers, ETF providers, and even professional traders all think they are above-board and don’t scam people, but no one actually is. Many people have participated in a pyramid scheme in the past and come out OK. We call them “survivors,” and they claim that the odds of being a survivor of a pyramid scheme are very low. However, the odds of being a survivor in the real world are extremely low. Here are five reasons why forex trading is not a pyramid scheme, along with some empirical evidence to back up the claims.
1. You don’t buy something to make money on the back end.
An investor who buys something for a few bucks only to sell it later for a lot more money has made money on the back end. But such an investor is a victim of a pyramid scheme. In order to get the top 10 forex brokers, you can click here.
2. You do not create a “community” around yourself.
Let’s say we build a garage in our backyard and invite several friends over to drink beer and play dominoes and pool and toss around a Frisbee. Then we reveal the garages doors to our guests and tell them it’s now a sorority house. Now we have a new circle of friends. However, we don’t force anyone to join our sorority. We decide for ourselves who joins. A pyramid scheme requires the members to all join.
3. You will not be buying stock and selling at the same time.
In a pyramid scheme, investors buy stock, and then they sell stock, and the money flows from the current owners to the next group of new buyers, the next group of current sellers, and so on. A pyramid scheme, of course, is illegal because it doesn’t allow anyone to sell their stock to someone else without first having sold it to someone else. However, all this do not happen in forex trading.
4. It does not require that you have a lot of capital.
In the real world, companies often require that you put a down payment on your own investment in order to participate in their stock offerings. This means that you have to have a large amount of money in your wallet or have saved it up to purchase the stock. You have to do the legwork and do the research before you invest. On top of that, you may not even know that the stock you’re buying is in fact a good investment until you have actually bought it and seen its gains.
5. You will not be persuaded by products and lies.
The real world is filled with ads, salesmen, presentations, and seminars from professionals telling you why their product or service is going to be the next big thing. These people and companies have money invested in them, and they have a vested interest in convincing you to buy their products.
But in the forex trading, you have to do the research, take the time to think through each decision, and then live with it. In a pyramid scheme, there is one master pitch man who can show you how the product or service will grow exponentially in value. The product or service might even really be worth something, but if you’re not careful, you could get sucked in.
We hope you get better understanding why forex trading is not a pyramid scheme. Make sure you do the research to avoid getting scammed. Make sure you do your due diligence before buying anything. If you think it is legal and you are sure you are getting the real deal, forex trading is one of the better ways to invest.