![Is Forex Considered MLM? [All Main Facts to Know]](https://fxtradinger.com/wp-content/uploads/2022/10/Is-Forex-Considered-MLM-1200x385.jpeg)
As you know, forex trading gets popularity day by day very quickly. There are various brokers who try to develop the forex trading market by using different trading plans and methods. Forex MLM is also one such method.
Some traders have confused about forex MLM. Is it legal or not?
Let’s try to find the right answer!
Forex MLM (Multi-level marketing) is a type of strategy that works with the help of clients and investors. It is legal on one condition when it is authorized by a legal regulator by accepting all trading rules. If it has a single website page and no registration from regulators, it means it works illegally.
In this type of trading plan, an investor promotes the company’s goods and services. It may do it by advertising it to friends, and adding links to websites, and blogs. It is helpful for brokers because they can easily promote their trading plans with the help of their clients.
There are many frauds or scams in forex MLM. you must be aware of these scams.
Let’s read more about it!
What Is Forex MLM
Whether you are a new or an expert trader in the forex market? The fact is that you must know about Forex MLM. An MLM is also known as a Multi-level marketing plan.
In simple words, MLM can be defined as a process of stimulating products and services with the help of an independent agent. Generally, a company makes its client as an agent to promote the goods and services by using his means.
The company will give rewards in return for these services. In the same way, forex MLM tarts a trader. Moving forward in the forex market without selecting a broker is impossible.
Many brokers persuade clients by offering them attractive terms to boost their services. So, they start promoting that broker’s products with given resources. A trader can advertise that broker’s services on any website, to his friends, share links on blogs, etc.
The main purpose of forex MLM firms is to collect a big number of clients and persuade them to invest in forex trading platforms. Such firms or companies offer different packages and ask their client to invest in any one of them. So, that they may get a reward in return. You must be aware that MLM has bad fame due to scams.
Is Forex MLM Legal
After reading about tons of forex MLM scams, many traders feel fear about it and want to know if is it legal to trade with forex MLM or not.
If we talk about traditional MLM, it is legal in many countries but forex MLM is legal only if it is regulated by an authorized firm. Forex MLM works with investors or company members.
To operate such companies, it is essential to be registered SEC (securities and exchange companies) otherwise your trading activities will be considered illegal and can be banned because of fraud.
Forex MLM and investor providers must have been registered by an authorized company otherwise they will be banned because of breaking the rules of the trading authorities. An authorized forex MLM will follow the rules and provide investors complete security for their capital.
So, investors must check the previous trading ratio and broker’s profile before trading. Don’t believe in these companies’ words. Make your own research work and check proofs legally.
Difference Between Forex MLM and Traditional MLM
There are two types of MLM: forex MLM and traditional MLM. Let’s try to differentiate between them so that you can understand them deeply.
Table of differences between Forex MLM and Traditional MLM:
| Forex MLM | Traditional MLM |
| Forex MLM deals with lending money to the company for further investment. | Traditional MLM companies deals in products and different types of these products in groups. |
| Here investors can earn a lot on big capital which is the return on the investment. | In this type of MLM, a distributor can collect big retail commissions by selling products. |
| Members of forex MLM can win extra rewards after bringing new investors to this platform. | A distributor can earn an extra commission when the downline buys more products than the commission goes to the distributor with a specific percentage of commission. |
4 Main Features of Forex MLM Scam
It is clear after deep research that almost all the forex MLM are fake. A large number of traders are looted by these scams because they are spreading too quickly. It happens because many of you don’t know the reality.
You must be able to distinguish between right and wrong. Many forex companies are not authorized that’s why they make money by making you fraud.
To make you aware of these scams, we are going to clear some factors about forex MLM scams.
1. Return Assurance
Many forex MLM guarantees you to return a handsome amount without any risk. You must be aware of the fact that the forex market deals with volatility. So it is not possible for brokers to return a fixed positive amount in any case.
If they promise you to return that fixed amount it means they are scams. They do it by collecting capital from new traders and giving it to you.
2. Profitable Payment Plans
Forex MLM frauds you by offering many attractive and profitable trading plans. Each plan may provide an assignment to complete and as a result, offers you a big reward after completion. To motivate new users, Forex MLM offers foreign trips, lucky draws, and many other attractive rewards to get more and more members for their website.
In this way, they will be able to achieve their target after collecting a big range of investors who are to invest with them.
3. Single Page Website
Another sign that will make you alert against scam forex MLM is that such firms have very short websites. They have only a few pages to describe their company. All these pages are filled with fake information.
They trap you by showing a false success ratio and exaggerating company performance. You can’t see any type of organization, legal proof of investment, and much other essential information at forex MLM sites. They attract new traders by promising economic freedom and big profits.
4. Circulating Money
A big question comes to your mind how forex market returns your fund when you claim it? It is very simple to understand. Many traders think that they may get their investment back from the market. But actually, the forex trading platform makes it possible by circulating the amount they receive from other traders.
Yes, this is right. They fulfill their promise by returning money to old investors that is actually the capital of new traders. This is a forex MLM scam that is seen in many countries. Brokers motivate investors to invest more and more until they make their way to escape.
FAQs
Is forex considered a broker?
Yes, it is considered a broker. Basically, a forex broker is an economical company that helps traders to get access to selling and buying platforms. It offers complete guidance to its customer.
Is forex trading legal?
Yes, forex trading is legal in all countries where currencies are used. It is the largest financial trading company in the world. Its trading income is estimated on daily basis.
Is forex luck or skill?
If we study forex trading history keenly, we come to know that it is luck more than a skill. How much experience you may get from forex trading, you must have chances of risk. All your profit is based on your luck which may be good or bad.
Summary
Let’s conclude our informative post about Forex MLM. It’s important to have complete info about Forex MLM because your ignorance may lead you to lose and fraud.
Remember that forex firms are legal only if they are authorized by some legal regulator. Otherwise, you have to face problems if you trade with such companies that are not registered by reputed regulators.
In this case, you may lose your all savings. Check the profile of that company keenly and also test the payment proofs as well as investing plans. Legal companies follow the roles of the country where they work.
In this post, we have discussed all the main features that you can check to prove a forex MLM is legal or illegal. So, you can save your investment if you read this post carefully. For further details, stay connected with us.
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