Be Careful With Fake Investment Funds! They Can Be Ponzi Schemes

The only winner is a scammer

Money attracts all kinds of people. Some want to make money working hard and those wish to make them fast and easy. Some companies aim at helping others to invest and develop, and businesses that only feed on others.

Trading is the field where a lot of money is involved. Traders are earning and losing money. Even when they lost a few times they are ready to try again. And this is the place where the Ponzi schemes come into action.

The Ponzi schemes are the scammers, although they advertise themselves as trading investment funds. The latter are legit, the Ponzi schemes are not. This article is written to present the way the Ponzi schemes operate and what you can do to protect yourself from it.


finance pyramide

The Ponzi schemes overview

Typically, there is a leader on top of the business ladder. He has two or more people below who also have at least two people below them. This is the model of the Ponzi scam.

The thing is that each new participant is requested to pay a fee and this equals your investment. You pay, you join the group, and receive the leader’s assurance that you will get high profits from the derivatives trading operations.

In fact, your money is not used in derivative trading. They are shared between people in higher positions instead. You will not get the return from trading activity. You can only get some money when new members join the group and pay their fees and they invite a few more people. If the new members do not show up, the whole pyramid falls apart and the money is gone.

Now you know how the Ponzi schemes work and that they are not real investment funds. They attract new members only to get their investment money. The real investment funds, on the other hand, make it possible for you to generate profit from your investment.

What makes the Ponzi schemes seem appealing

The Ponzi schemes, to be able to function, need good advertising to cover their true intentions. Naturally, you will not find them under the Ponzi scheme’s name but investment funds rather. They will promise high profits, even 30% daily from their $10 million funds. And to be honest, who would not want to participate in such a share!

Remember, nobody can guarantee such a return. 30% in derivative trading sounds impossible. 3-5% a day can occur but still, cannot be promised.

There is always risk involved in trading any sort of securities or assets. Trusting a total stranger with your money does not even sound right. To make more, you should always take care of what you already have, thus transferring huge amounts on some stranger’s account is not wise behavior. They may as well lose all your investment and you will never see it again.

My point is, do not fall easily for high returns promises. If you are keen on trading financial derivatives, open a trading account, and do the work yourself. This way you will know exactly what is happening with your money.

Ponzi schemes have no profit

So if you happen to sign up for a Ponzi scheme, leave it as fast as possible. Their business model operates in such a way that they will insist you bring new members. You may be pressed to invite somebody from your family or your friends’ circle. In the end, you may not only lose the investment money but also the trust of your loved ones.

Secure the Olymp Trade account

In addition to the Ponzi schemes, you may encounter the traders declaring they will help you increase your balance account. But to do that, they need to obtain access to your account. They may try to gain your trust by sending proof of their successful operations.

Never share your account details with anyone. Only you are the person who should have access to your account. If someone calls himself a professional, he should not insist on getting your account details. He should rather share his experience and strategies that worked well for him with you so you can use them in trading.

Secure your account

Be careful. Do not make hasty decisions. If someone claims he can help you make a fortune in a day, stay alert. When you really think about trading derivatives as a way of making money, proceed as the successful traders do. Gather the knowledge, read, practice on the Olymp Trade demo account, and have patience.

Wish you success!

How useful was this post?

Click on a star to rate it!

Average rating 3.8 / 5. Vote count: 12

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Bart Bregman

Full time day trading, and helping out with Olymp Trade wiki in my spare time to create an awesome platform for beginners. I'm a digital nomad that travels the world while working from everywhere!

Recent Posts

This is default text for notification bar