Foreign exchange (Forex ) trading has become one of the most popular trading and investment platform where Nigerians trade with their stocks.
A report released by Dailyfx ( a forex trading research firm ) earlier in 2020, it shows that Nigerians forex traders has about $1.2million worth of trade on the average.
This huge value has led to the influx of people into the trade and at the same time opened up opportunity for scammers and trade con artists to defraud unsuspecting investors /clients with seemingly unrealistic returns on investment. These unrealistic returns on investment has made forex trading a potential home for scam.
In a bid to curb and enlighten potential investors from being a victim of forex trading scam, Dr Tayo Oyedeji, an entrepreneur with business interests in investment management and technology, shared his invaluable experience and encounter with one of these forex trading scammers through a twitter thread obtained by Naijtech.
1/ 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 $1m will quickly become $1bn in 15 years at 60% per annum from this gentleman.
What a deal! pic.twitter.com/1vTQB2tAf0
— Dr. Tayo Oyedeji (@tayooye) September 3, 2020
His experience and caution to Buyers
The business expert narrated how the young man (forex trader) offered to help his company make a 5% per month return on their investment.
“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 $1m will quickly become $1bn in 15 years at 60% per annum from this gentleman. What a deal!” he narrated.
He was excited by the prospect of the huge return on investment, however, he quizzed the young man further to have a knowledge of the investment platform, and the values to be traded.
“So I asked him about the underlying asset. He said 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 doubles his principal every year. “
“In this magical scenario, you can start with N1m and have almost N40billion in 20 years. That’s amazing. “
“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 $1m and we are set for life at 5% return per month. “ he explained.
However, with his experience in investment management, he requested the forex trader to show him his trading platform.
“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.
“I insisted on an expanded date range and sure enough, he lost all the gains in Q2/3 2019 and made a loss for the whole year. My team was shocked but I just grinned knowingly.”
“If you can make 7.5% per month, you don’t need investors. You don’t need marketing. You don’t need to sell a teaching course. You just need 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.”
He warned investors about the potential scam that lies in forex trading as most forex trader can not earn more than 2% per month, hence why it is a scam for them to promise their clients a 5% per month returns.
” Be careful, guys” he warned.
“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.”
Furthermore, Dr Tayo Oyedeji offered his advise to those who are interested in investing with a forex trader to be cautious and ask the following questions before investing.
“Finally, before you pay the tuition for a FOREX class, ask the teacher:
1. Show me your 2-year trading PLATFORM gains. Remember, PLATFORM, not REPORT.
2. If you make 7.5% per month, why are you NOT the richest guy in the world?
3. Why do you need my meager $1000? ” he advised.