Beware! That ‘forex trading’ may be a scam
Foreign exchange (forex) trading is no doubt a thriving business/investment in Nigeria. A report released by Dailyfx (a forex research firm) earlier in 2020, confirmed this when it found that Nigeria’s forex traders trade currency positions worth as much as $1.25 million on average, daily.
This volume is huge enough to build an industry; however, it is also mouthwatering enough to attract quacks or scammers, whose mission is to fleece unsuspecting investors of their hard-earned money.
To curb the operations of scammers, who promise their unsuspecting clients unrealistic/mirage returns on investment, an entrepreneur with business interests in technology and investment management, Dr Tayo Oyedeji shared his experience and offered some valuable advice.
He shared, “Early this year, a young man walked into my office at @Overwoodng and offered to “help” us make 5% per month on all the investments in our portfolio.
“I did the math and saw that our $1million will quickly become $1billion in 15 years at 60% per annum from this gentleman. What a deal!”
But unlike several undiscerning investors, he asked about the underlying asset and was told forex trading. “I asked him about the underlying value he is creating. He said “nothing”. We are just trading currency.
“I asked him about his track record. He said he has made 7.5% per month for the past two years.”
Please note that 7.5% per month is 90% per annum, which means he almost double his principal every year.
In this scenario, it means you can start with N1 million and have almost N40 billion in 20 years.
“He showed me his financial records that reflected the magical 7.5% per month and got my whole team excited about the prospects that we could all become magically rich without doing much work.
“Just give this magician $1million and we are set for life at 5% return per month,” Oyedeji added.
Experience, they say, is a better teacher (if not the best one). At this point, the founder of Overwoodng, an investment management firm, decided to allow his instrinct from experience guide him.
“I am a little older and more experienced so I asked him to log into his trading platform so that I can see the magical gains. Of course, he suddenly got antsy.
“I promised him a lot of investments if he would show me the gains from his platform. PLATFORM, not records. He logged in and showed me his Q1 2019 record, and he actually gained about 30% in Q1 2019. Absolutely magical!!!
“I insisted on an expanded date range and sure enough, he lost all the gains in Q2, Q3 2019 and made a loss for the whole year. My team was shocked but I just grinned knowingly,” he added.
But why had Oyedeji grinned? According to him, If you can make 7.5% per month, you don’t need investors and equally don’t need marketing, or to sell a teaching course. All such an investor needs is a small amount of money and 100% focus on your craft.
“The reason they are propositioning you to invest in their magic venture is because they don’t make 7.5% per month and they need your money to fill a gap.
“Anyone who can consistently make 7.5% a month will be the richest person in the world in a few years. Be careful, guys. I can assure you that less than .01% of FX traders can make more than 2% per month.
“If 2% per month is so difficult to achieve, how can these magicians offer you a 5% return? You will lose your money. Don’t do it.”
In all, Oyedeji and other investment analysts that have warned unsuspecting investing public against making hasty decisions, are not saying investing in forex trading is not real but expect you (potential investor) to ask these questions:
* Show me your 2-year trading PLATFORM gains. Remember, PLATFORM, not REPORT.
* If you make 7.5% per month, why are you NOT the richest guy in the world?
* Why do you need my meager $1000?