Forex Prop Trading - A Goldmine for Scammers
A normal working day, you have a phone ringing, an unfamiliar number on the screen. "Hello! I represent the financial company XXX ... "- you have already opened your mouth to, as usual, in the case of offers from left-wing companies, send an interlocutor on an erotic foot trip, but here he says that" they will give you capital for trading. "
All. You are on the hook. You listen very carefully to “Cat Basilio” and understand that success is near) Finally, at least someone has understood all your potential and is ready to give you millions to manage. Your time has come!
But what is really hidden behind the offer of a “good uncle”? Now there are a lot of offices advertising the so-called "Prop trading»In the forex market. Today we look at the standard schemes of divorce, which are used by these guys, inviting gullible Pinocchio on the Field of Miracles.
What is prop trading?
If you look at Wikipedia in search of the meaning of this phrase, you will come across a completely harmless definition. This is the name of a broker who sells instruments, mainly at his own expense, and receives a basic percentage of profit from speculative profit from transactions in securities and derivatives, and not from "client spreads", interest from account servicing, etc.
In fairness, it is worth noting that such offices honestly providing capital for trade exist. If interested, I advise you to read the book "One good trade." True, trade is conducted in such offices in the stock and derivatives markets. And abroad. In Russia, as usual, they perverted everything and turned it into a scam.
At some stage in the sphere of the financial market, a certain Great Combinator appeared, who came up with a simple scheme regarding the "legal withdrawal of funds." The idea was simple to the point of genius: to make sure that clients themselves invest money in a brokerage account, in the hope that they will add “mule” from above. If you are an active trader, then you undoubtedly came across a lot of calls from various forex dealers who somehow hunted for your funds. Usually, you answer “No” to all of their offers to open an account, because dozens of such offices pop up that collected money from customers and subsequently disappeared into oblivion. But what will happen if, one fine day, telephone calls do not begin with a request for a deposit, but rather, they offer you money in trust?
Free cheese - only in a mousetrap
Each trader dreams of money received in trust. His dreams are based on the fact that wherever you throw, the trader will get only advantages from such management: you don’t need to worry about the triggered stop order (not trading for your own money), they will give a lot of money at once (color trading dreams look exactly like that), and the most the main thing is fun for vanity, for the trader DU (trust management) is like a reward recognizing his merits. Think and feel these sweet sounds of the phrase: "I have in trust 100,500 million."
In general, having received such an offer, your morning dream will be brushed aside or instantly relieve everyday evening fatigue. And you will not have time to look around, as in intense silence you will already listen to such attractive terms of the transaction. Of course, you will be blinded by such an unknown luck that will make you think that you need to prove that you are the one and only trader to whom you can trust a decent amount. And since the company is solid, it just needs to be convinced of your good intentions, but they are ready to take your word for it, even despite the long-term statement you have collected (the results of your tenders) with the signatures and seals of your broker.
If you were "bred", as grandmothers are bred, under the pretext that they allegedly received help from the state and that it is simply necessary to pay 13% of taxes from this (not yet received !!!) amount. But you would have known exactly what to do in this situation, you would not have bought it a hundred percent. But in fact, they begin to breed you. They tell you that a certain insignificant amount is required of you, and it must be paid in order to open an account for a large amount, as a result of which you have to bargain and thereby prove that you are the best. Are you listening carefully at this moment? Of course not, at that moment you already choose the "yacht of your dreams", immediately with lifeboats and photo models in addition. And just at that moment you “stuck”.
You will not stick out soon, because all the video content and just “thank you” letters from the benefactor “prop”, from the lucky ones, will repeat your dreams in a completely strange way. Here they are those who “went and got”, those who “received 100,500 million” in management, here are their yachts and photo models. And it doesn’t even occur to you to “google” the image search in order to understand where these photos came from or even answer your own question why these lucky ones whose “true story” are so densely published on the “propa” website do not have our century of your Instagram?
At the end of the 20th century, the idea of such a "divorce", when a trader skipped and repeatedly carried money to an open brokerage account, was called "prop." The methods of the "funny 90s" for "hilling" the people and promoting the loot, many craftsmen took into service, inserting the "bait DU" into the formula. Forex traders catch this “bait”, taking their funds, and in return giving not the promised amounts, but only hope.
Psychologically, the blow was dealt correctly, because the caste of traders consists of people who even simply blindly carry money for their personal ephemeral dream, replenishing and merging deposits again. They go for it, even though they are very familiar with statistics about 90% of the "mergers" in the market. And then the dream was presented, visualized and served on a "silver platter". So they don’t ask for money, as it were, on the contrary, they offer it, but you just have to give a little to “technical expenses”.
What's the catch?
The essence of the "props" is what? That the path beaten by the trader to them never healed. So how do you repeat the trading fee?
The fact is that "props" organize a competition with various stages and conditions, levels of losses and profits, while everything is limited in time. Flew in the competition - the deposited money burned. Do you want to continue to participate in the attraction of unprecedented generosity - deposit the amount in a new way, but what if they leave? In order that the trader does not get off the hook, he is promoted, namely, they will tell the story about the “train that could”, so they will show a real person what to say? Any self-respecting scam in the service always has psychologists, because without them - nowhere.
A separate topic is the “near market”. He brings a considerable income. Here the trader is offered to learn and give systems for gaining the very “grail for earning a yacht,” plus they will give lectures on the topic: “make money in the market like two buttons,” but all for money, and, of course, under the pretext that study is better when you pay. Moreover, funds for study go much more than your first deposit was.
But the fire of greed and greed flares up in us, but in our usual everyday human condition it is just a lamp, however, someone should settle in our souls "faith in the Golden Mountains", as it flames up in a fire, burning sanity and prudence.
The business of “propov” brings decent income, therefore, experts are drawn up who develop “offers that cannot be rejected” at the psychological level; also, for the greater confidence of the trader in the correctness of his decision, there are a lot of authoritative opinions on thematic forums that “prop - it’s good that they are an incentive to strive for profit, but the limits on losses serve to foster “trading discipline”. None of the traders mind. Prop is a kind of test. If you had passed the IQ test and you had, say, 40, would you have boasted? Or would they be outraged that the test is rigged and cannot be such a low figure? You would not tell anyone, but you would have passed the test again, and then again “again and again”. Revanchism is also one of our negative qualities.
Why are prop-trading offers insincere and why will a trader always lose?
First, you have to pay money. Why do they need it, but you pay, where is the logic? If you are looking for talented traders, you are investing. Everyone knows that our personal data is floated to other companies and then "muddy" companies, which are also brokers, start calling us. So, if the broker was looking for "talents", then he could find trading statements with positive equity using the same system as personal data, and this does not include PAMM accounts, which you don’t even have to look for statement, but it remains just to find out personal data.
Second - the competition is limited in time. If the stipulated loss, then why stipulate the size of the profit? The desire to prevent the limit of loss will make you act more conservative at times, while you can never reach certain parameters for profit. Since, based on all conditions, these parameters of the prop are calculated and laid in the condition.
Third - the "propovy" trading terminal. Why not Metatrader, and why "propam" reinvent the wheel, spending money on their own software? I think no need to explain.
An objection of the type: “they undertake to teach them how to profitably work and only then give money” does not stand up to criticism at all. If the prop had really working algorithms, do you think it would be difficult to write a robot, and not look for beginners who, like all mortals, can make a mistake?
Fourth, there are props that really add their money to yours. That is, if you contributed a hundred dollars, then they gave a thousand, and you trade on "their money." This is the most classic divorce. You trade until your hundred disappears. Next - the account will be blocked. At the same time, “prop” remains with its own people (it didn’t have its own, because you simply traded with a huge leverage, and if all operations were carried out on a “propovy” terminal, then maybe your orders were not brought to the market at all? )
In general, a film with a plot like “The Wolf from Wall Street” can be made about these guys. By the way, companies of this kind exist to this day, as well as a scheme by which they earn money by providing "penny" shares with their very high remuneration. Prophes do not even give shares in return.
Along the way, earning on all kinds of near-market things (training, paid software, etc.), using the accumulated experience of Forex kitchens, they play against you on their kitchen terminals. And the contests were created only because if you take away all the money at once, then you can scream - “Guard!”, And subsequently they will pay attention to the scream. Isn’t it better to "bring" the poor trader to the sink, because then he can be blamed on the type of "The Fool Himself", moreover, you will agree with this statement in 9 out of 10 cases and bring your funds again.
In fact, there is no sense in smelling, because there are no good uncles giving out money on the Internet. Didn’t you been taught in childhood that if a stranger uncle gives candy in the street, then you shouldn’t take it? Of course, you are already an adult, and the innocent "uncle sweetie" on the Internet will result in a loss of money for you. Only in such a case will you become a simple donor for some time, contributing funds again and again, without even thinking to draw an analogy with MMM and other money-luring offices. "You are not like that, they are not like that ..."
An alternative to prop offices
PAMMs could serve as an alternative to all this. An account will be opened for you, investors will deposit money, your conditions, there are no restrictions on the deposit. All that remains for you is to trade, while attracting an investor with your results. Do not forget to develop PR skills, because it is difficult to attract an investor, but you can. Our Pamm Manager course can help you with this.
Do not know how to trade? There are a large number of dealing centers, ready to teach you for free, providing personal managers. There are also really trading philanthropic traders who publish their methods in the public domain, they are also difficult to find, but again it is quite possible (there are such on our forum).
No money for start-up capital? This is also solvable. There is a system of no deposit bonuses, of course, you need to look for which offices they can actually withdraw from the account, but if you are a beginner, then at first you will still "merge", and the first bonuses will be "for training."
If you are an established forex trader who has been working in the market for a long time, then you certainly know that a transaction can be successful only when it takes place on your conditions, the entrance is at your chosen level, and profit is designated based on your own considerations, while stop with the alleged losses you personally chose. Now, imagine for a moment your trading, where you are told what to do, where you go in and constantly lose money on these transactions, the result is a minus, but they tell you that here is another transaction and everything will be fine, it will definitely cover all losses and fulfill all your dreams. Stupidity, right? It is so, because the strategy of propov - "lure and merge (in your pocket)."
Look for what suits you personally, always invest only on your own terms, take care of yourself and your money, do not engage in self-deception, critically honestly evaluate your trading opportunities and remember - “It’s better to be than to seem.”