Financial markets scams have been here for quite some time now, and all of these have just one objective – to escape with your money. ‘Double your Money in Just 24 Hours’ – Forex traders and social media users often come across these ads in variations, but all of these have the same message – your money will double in a day, in a few hours, or even in a minute.
Such scams regularly hit financial markets, and people fall prey quite easily even after being aware that such scammers have flooded the markets. These ads are quite appealing, with the pictures of people grinning with the money they made. The harsh reality is that there is no safe way which can double your earnings fast.
Why financial frauds and scams attract people
Online financial frauds are designed to deceive customers again and again with the same kind of lucrative proposals. The same kind of scheme attracts different sets of people who have a common desire – to double their money as quickly as possible. Everyone looks forward to a short-cut to increase their money, and this is what attracts people to the proposals and promises of the scammers.
Scammers and frauds are quite innovative and creative in their scams. They offer schemes and options which seem lucrative and new. It is tough to recognize scammers because they recruit people to fraud others. In a new disguise and with a new set of promises, these scammers approach people and target their weak emotions. It is the shortage of money that they will help you to get rid of. They talk about a unique proposal that has worked for so many people that can change the destiny of people facing a severe monetary crisis.
For traders and investors, it’s an opportunity that shouldn’t be missed. Everyone wants to give it a try and get lucky. In the end, it’s nothing more than just another financial loss. The reason is simple – there is nothing that can help you to double your money.
Doubling your money with huge leverage – does it work?
One of the most common types of scams going on in the trading world is the promise of doubling one’s money with huge leverage. In reality, only a very small percentage of such advertised products work.
When trading with leverage, it allows one to gain greater exposure to larger financial market positions using a small amount of cash to begin with. Generally, it can range from 5 to 100 times or more. There are several Expert Advisors that promise exponential returns advertised as trading on leverage. When combined with flashy advertisements and a decent website, such scams can attract unsuspecting traders easily. These programs or platforms usually work with high leverages of 1:100, 1:500, and even 1:1000.
A trader has to realize that trading with leverage, even when using a legitimate get-rich-quick scheme or a profitable Expert Advisor, can still have dangerous outcomes. The nature of leverage is such that it acts as a double-edged sword. If the market moves against the trader and they are using a fraudulent broker with a faulty trading strategy or platform in place, traders can easily see their account depleted when they least expect it.
Because of the dangers posed by such fraudulent EAs and trading platforms that offer to trade on high leverage, several regulatory authorities globally, including the European Securities and Markets Authority, have put limitations on leveraged trading. This means that legitimate brokers and Expert Advisors must follow the guidelines such as not offering such high leverage rates such as 1:100.
Doubling your money – risky and speculative ways
One of the fastest ways of doubling one’s investment is through the use of margin trading, penny stocks, or options. Unfortunately, there are many scams operating in this area as well. The most common methods used include using options, as well as trading on margin. Generally, these methods allow investors to essentially borrow money from a brokerage house to get control over a larger amount of money.
Are the chances good enough to try doubling money with huge leverage/ crypto assets or risky investments?
In general, the question implies the answer: the lower the chances, the higher the risks. But how exactly does it work? Let us look at the two possible scenarios.
Trading with leverage
Normally when a trader opens an account with a small amount of capital, such as $100, it usually means that he/she is trading micro-lots. Micro-lots means trading in cents, which allows the trader’s account to withstand big movements when a trader is multiplying cents, i.e., 10 cents per pip.
However, traders should always be mentally prepared to have their accounts wiped out, even when they are working with a legitimate broker. That’s the nature of leverage. Experienced traders have almost always suffered four or more instances where their accounts have been blown. Thus, the chances of succeeding in leverage trading depend on the trader’s or investor’s understanding of leverage and calculating the risks involved.
Speculation with crypto-assets
The cryptocurrency market emerged as a viable investment option, just 4 or 5 years back. It can be said that the market is still in a fledgling state. Thus, it does not guarantee profits all the time. Additionally, there are a lot of risks involved, which are explained in brief below.
- The volatility of cryptocurrencies is such that unexpected changes in market sentiment can lead to sharp and sudden moves in price. If one is caught on the wrong side, it is not uncommon to see losses amounting to thousands of dollars.
- As cryptocurrencies are, in general, unregulated, there are still some legal loopholes that need to be discussed. Not all countries allow crypto trading freely, as crypto-assets can be subject to various withdrawal limitations.
There are no guaranteed ways to double one’s money, especially in a small-time period such as 24 hours. Almost in all the instances, brokers and services who advertise these claims turn out to be frauds and scams. Thus, traders should approach such claims with caution whenever they come across and reject them if any red flag is noticeable.