There are dozens of Forex brokers in the world. Some of them have existed for more than 10 years, and some have just started to make their way on the exchange and over-the-counter markets. Often the competitive advantage of young companies are more attractive trading conditions, but there is no guarantee that the broker will not deceive trusting clients.

Below, we have prepared for you an overview of the main features of the pyramid, which relate to both brokers and investment projects (venture startups, crowded extension platforms, etc.). Most of them are documented in the Central Bank.

Signs of the pyramid: how to recognize a fraud broker

MMCIS, Forex Trend, Pantheon Finance, Iron Fx – many people remember these innovative companies that offered new technologies for trading and PAMM-investing. Alas, the first three were pyramids, Iron Fx – scammers. And if investors knew the signs of the pyramid, they could have avoided problems.

Signs of the pyramid:

  • Guaranteed fixed income. Any investment is a risk and there can be no guaranteed income here (the exception is deposits). If the project (broker) promises to pay a fixed income, for example, once a week or a month, then most likely the profit will be generated at the expense of other investors.
  • Planned yield above average market indicators. Theoretically, venture startups (investing in securities) can bring 50-100% per annum or more, but this is rather the exception. Forex is a closed system at all, where there is no generation of an additional product, but simply a redistribution of money on fluctuations of quotations. Do you still believe that the best traders of social trading really earn more than 1000% per annum? A sign of the pyramid is the lack of understanding of the principles of profit generation.
  • Obsessive advertising. It’s not just about the media, but also about social networks, forums, etc. And most of all advertised project profitability and ease of earnings.
  • No registration documents: charter, offer, financial statements. Many brokers declare that they are checked by auditors, but for some reason they do not show statements. Some even do not have an offer on the site – another sign of the pyramid.
  • Lack of fixed assets. Broker is an electronic platform, because this sign of the pyramid refers rather to investing in a business according to a business plan (through equity participation or lending). This can be seen on the financial statements.
  • No actual address, including phone numbers. True, the presence of real representation does not always save from fraudsters.
  • Emphasis on ease of earning income and large percentages. Marketing trick – to convince a person to invest money, convincingly promising profit, but never telling about the product itself.
  • Emphasis on affiliate programs. If a broker (start-up) convinces to make money on attracting new customers and shows perseverance in this – this is a sign of a pyramid.
  • Other features: website errors, text with errors, lack of licenses, replenishment only through anonymous wallets, etc.

These are common signs of the pyramid, which should be considered all together. But the presence of one or two signs is already a reason to think.

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