The negotiations through ‘trade’ have gained ground in recent years. More and more people are investing in the purchase and sale of stocks, cryptocurrencies and precious metalsamong other advantages.
(Trading Forex, a new way to invest).
Likewise, on the web and on social media, offers of digital trading platforms have exploded, along with examples of people claiming to have gained financial independence through stock trading.
However, there are unsuspecting people who enter the world of trading who, out of ignorance or overconfidence, end up losing their money in a short time or being scammed by illegal money collectors.
For this reason, Javier Hernández, lecturer, investment expert at the New York Stock Exchange and founder of “Invest to Earn”, An online school that has educated more than 7,500 students in 67 countries for over 14 years, shares the four most common trading scams that new investors should avoid at all costs.
Scam 1: illegal brokers
To operate in a market, people must do so through a broker, i.e. an intermediary financial entity or company that executes orders to buy and sell assets on stock exchanges and charges commissions for this service.
(Equities: a globally overvalued activity).
There are many brokers or stockbrokers who have a business license. However, there are also many that are illegal. How to recognize them?
Here are the things to look out for and suspect:
-They are generally established in tax havens or in countries with little or no regulation where the laws do not protect investors.
-They contact their potential customers with great insistence. start a “investor persecution” put pressure on the delivery of capital.
-Use promises like “you put the money in and we invest it” or “we are the experts, you don’t have to worry”. A legal broker does not perform operations for people, it does not even generate suggestions. It is limited only to executing transactions that investors decide themselves.
Before choosing a broker, you must find out about its origin and its solidity, explore where its parent company is located to verify that it is governed by the laws of a country with regulations in this area, know in detail the guarantees it offers to protect the money and make sure you have excellent customer service.
Scam 2: Guaranteed 100 X 100 return promises
It should be suspected when a platform or entity provides a fixed return whether daily, weekly or monthly. “It’s impossible. A certain percentage of profitability or a specific amount cannot be guaranteed. warns Hernandez.
Scam 3: Referral Programs
Another very common form of scam occurs when you are asked to invest a certain amount of money and in turn attract or recommend other people.
Here, the typical sentence is “You invest $500 and if you invite two friends or relatives we give you another $500, if you invite 4 you get $1000…”. This is the typical model of a pyramid. So, at the first sign of this type of offer, it is better to flee.
Scam 4: Low investment, high profitability and in a very short time
Another red flag appears when they promise that by investing a certain amount of money, usually not very large, they will get returns of 100, 200 or 500%.
It is possible that the promise will be kept on the first occasions to generate confidence and credibility and to continue to motivate investment. However, such “profitability”in reality it is generally the result of the investment of other people who are in the pyramid.
Tips for investing in the stock market and not dying trying
1. Get trained. The ability to trade on the stock market can be learned, but it takes time, discipline and perseverance. Learning from experts, reading financial education books, watching tutorials or taking online courses are great options and an essential requirement before starting an investment.
of them. Practice. Before rushing to open a real account with a broker and put your capital in it, try a demo or simulator account. Practice various trading strategies, train your ability to do the corresponding analysis and learn from your mistakes and successes. Once you are ready to trade with real money, do so in small amounts.
3. Manage risks. Only invest what you can afford to lose without affecting your quality of life. Do not invest more than 30% of your total capital in a single transaction. It is advisable to have a diversified investment portfolio and to define your level of risk tolerance.
4. Make a plan. This must be tangible and operational, based on a list of tasks to be carried out which includes the objectives to be achieved, the time to achieve them, the procedures for entering and exiting operations, the rules for managing capital, among others. .
5. Prepare to win, but also to lose. Losses are inherent in trading on the stock exchange. The important thing is to get more winning trades that cover and exceed the losses. Similarly, it is important to know how to protect the capital by establishing the closing prices of the operation.