Pyramid schemes in investing and trading

Pyramid scheme stock market

Scams and lies have formed part of humanity since the beginning but I think there never was such an amount of lies as nowadays.

That is to say, as the world of technology and comfort has grown there are more possibilities to lie in all levels.

Before any seller had to go house by house trying to sell his products, with not very much success normally.

The scam was evident.

Today we have sellers trying to sell all type of scams through the internet, the perfect mean to develop the most effective lying techniques.

Pyramid scheme Forex

One of the fields with more development in this respect is the Forex market.

A market that has great results due to the easiness to promise “great wins without risk” and without experience.

Fraud pyramid scheme

The naïve people of the world see things like that and join quite happily, not knowing that have been scammed.

“Finally I have found the way to get rich” think many.

These kind of promises come normally surrounded by beautiful girls, smiling men, paradisiacal beaches, dream life, etcetera.

Compared to that those who promise to return a 10% annually seem like idiots.

Who wants to win 15% being able to win 500%?

Therefore you have the psychological construct from which all the uncountable pyramid schemes have been created, the same as Ponzi, “the king of marketing lies”.

These kinds of businesses populate the online market everywhere, whether in specialized pages, blogs, or adverts in any of the big names of the net.

It is not difficult to find them.

This kind of pyramid schemes works this way:

A representative of the service will try to contact the potential customers to give them the idea of a great investment opportunity.

After contacting hundreds or thousands of potential customers, some of them will join the race to riches and buy the “service”.

As many of the first customers supposedly have won 15% monthly with the product and they promote it, more and more customers join the service.

A bit of marketing and self promotion finds tons of customers in that stage.

The company will have made enormous amounts of cash that supposedly is dedicated to “investment”.

The scam will maintain itself as long as the number of participants grows.

While the tendency of new customers is growing it could happen that some of the initial customers want to cash out, which some of them could even attain. With that they speak well of the product in forums of all kinds, giving more publicity to the idea (1).

When the trend to get new traders decreases or when the number of traders requesting withdraws is too big it is the moment to close the system.

In that moment the investor and principal developer of the idea disappear of the scene with, for example, 80% of the money cashed up.

The only customers who saved some money were the first 1 or 2% who ordered withdrawals.

The rest will not only not see 15% returns a month but no money whatsoever.

A pure and full blown scam.

It is obvious that there was no investing plan of any kind.

Another problem with this is that some people who entered in the first stages of the game think it is legit and start persuading other friends or family to join.

This type of phenomena is so common in the online financial markets that if we do a search online we can find dozens of these schemes, especially in the English speaking market.

Always beware of promises of too much money easily.

  1. Sometimes there are “real testimonies” because it is very simple to hire actors to appear in videos talking about how good the product is. In fact, this is the favourite way of the scammers. The web is full of this kind of testimonies. It is difficult to find the genuinely good.

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