Abstract：The biggest problem with forex trading that contributes to its constant conspiracies is a lack of transparency and unclear regulatory structures. Though there are forex brokers that run a legitimate business operations, there are also many forex brokers that are unregulated and are pyramid schemes in disguise.
The forex industry has gotten a bad reputation in recent years due to the mushrooming cases of forex scams by unreliable forex brokers.
Is forex trading a pyramid scheme？ A straight-up answer is “no”.
However, pyramid schemes are commonly found in the world of currency trading.
Pyramid schemes are illegal in many countries. The reason is that only a handful of people who belong to the peak of the pyramid scheme can actually make money. They are constantly “recycling” the funds as new people are invited to join with new deposits. Some pyramid schemes last for a long time, but some unstable ones go bust fairly quickly. Therefore, it is not uncommon to see some newly established forex brokers go missing after just 1-2 years of being in business.
A pyramid scheme falls apart when the top ones are not making money, and not enough new funds are being pumped into the scheme.
One evident sign that allows you to distinguish if a forex broker could be a pyramid scheme, look at how it markets itself. If it tells its clients that they could also earn some money off referring and recruiting newcomers into the broker with deposits, it is highly probable that this is a pyramid scheme.
Don't be duped by promises of easy and “guaranteed” profits with no risk. Most importantly, never deposit any money unless you are confident you are dealing with a well-regulated online forex broker.
To do this, simply download the WikiFX mobile application and look up the broker of your choice before registering and depositing with them.
In summary, Forex trading is a legitimate form of investment, but it is not a one-way ticket to easy money.
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