Over the last 50 years the world has progressed at a staggering speed. Not too long ago life was much simpler. Paperboys roamed our streets in the mornings. We were less connected and life was just slower paced. Then came the internet, the information superhighway, web 1.0, that fad. Not much really happened in the early internet. It wasn’t until web 2.0 started that things got interesting. Immediately the internet world jumped from colonial times to the new wild west. Now it would seem we are in the gold rush and the land grab is in full swing.
There’s a reason I describe the web in early American terms. The American frontier was a virtually lawless place. Crime ran rampant and the people on the front lines had to learn to live and survive in their new world. Often times this was all through trial and error learning who and what they could trust on the way.
Much like today’s Internet.
As business owners, we learn and relearn how to build communities surrounding our brands. We learn how to survive and thrive online. As consumers we learn who and what is trust worthy on the web. The internet is a wonderful place. It allows you to create almost any persona online. You can be the person you’ve always wanted to be or always knew you were deep down inside. It doesn’t matter if you were nerdy, shy, bully, goth, know it all, you can completely turn it around.
Therein lies the problem.
You can be almost anyone online! The helpful veil of anonymity keeps people from seeing if the online persona matches the offline. Cue the internet gurus. I know I’ve written once or twice about this scourge of the internet but this will be more in-depth. I’ve had some recent first hand experience with scammers err I mean gurus.
I’m going to attempt to leave out names as much as possible but here’s my story.
A couple years ago I was turned on to trading binary options and the foreign exchange market, by a good friend and former business partner. The idea of making money online by making educated predictions on market movement was too interesting to ignore. Put simply trading the forex market is like trading stocks on a super short term basis. Where stocks you hold onto for months and years forex trades range from minutes to months at the most. Anyway I was stoked to learn the skill of trading. Then I realized just how much time I would need to dedicate to learning. I wanted to make money fast, I didn’t have time to study market movements and patterns. So like any other impatient person I looked for shortcuts.
Backtracking a bit.
Prior to the implosion of the network marketing company Wake Up Now. Many of its’ IBOs (independent business owners) discovered the world of forex trading. Some put in real time and effort to learn the skills necessary to profit off of the markets. Others did alright but learned enough to make inconsistent profits. In either case Facebook groups emerged where “experienced” traders taught you what they knew about trading. It was great if you wanted to cut your learning curve down significantly. These Facebook groups ranged in experience and often had an entry fee or membership attached.
My friend had had a lot of success and set up a free group to teach people what he was doing. Bless his heart he believed in making money off of the markets not people trying to learn the skills. It’s funny because now that I think of it almost all the groups that are “pay to play” are ran by former network marketers. Anyway some of his students branched off and created their own groups to teach people the ways of the market. I ended up joining one of these student’s groups because he was having a lot of success and others in the group were as well. We’re going to call this student turned teacher “D.” In fact my buddy recommended D because of all the great results floating around online.
$150 later and I had access to the group. It was not a bad deal I got a bunch of short videos detailing different methods of trading. I made more money than I had made before. However, I still wasn’t maintaining a profit due to a inconsistent and low win ratio. Realistically to profit in forex it seems you need to maintain at least a 70% win rate. Otherwise you’ll just chip away at your account. I was dissatisfied with my results so I took a break from trading to focus elsewhere.
A new solution.
It was around this time that the idea of a trade copier was pitched to the group. The way it worked was the 2-3 experienced traders of the group would take trades on their personal accounts. Their accounts would be logged into a program called Signal Push. Signal Push would log the host trade and push that out to anyone else with an account a split second. It was a no brainier for me. For $300 a month I would get to copy the trades from people actually making good money in the markets. It almost guaranteed I would make a lot of money. And it started out that way.
The first month.
The first day of the copier there we 6 wins in a row. Some with risky money management made $1000s in a day. I put $300 into my own account and made an extra $200 that first week. Then came the loses and inconsistent trading schedule. Some weeks there were 10-15+ trades some weeks it was lucky if we got 5. The first month I think the win rate was 67% not that great for “experienced” traders right? That plus issues with signal push dropping trades or lagging on trade execution lead to a lot of people losing money. Some even blowing their accounts.
Very few people ended that first month in profit. Still a lot of us were understanding so we went in for another month. If you’re not keeping track that’s $900 invested now. Month 2 was much of the same month one problems. Infrequent trading even though they added a third trader. Between the 3 people we still couldn’t maintain a decent amount of trades per week. I think I had $200 left when the second month started but by the end my account had $6 left. Now don’t get me wrong due to greediness my money management was horrible. Some trades I risked half my account and most of the time I had my trades set between 15 and 25%. Still the win ratio was no better than my own so I said fuck it. “If I’m gonna lose money I’ll do it without help.” That was my last month using the copier.
After that I was kind of jaded about trading so I took some more time off. Not too long after that my friend started another free signal group with another trader. They were posting up great results between the 2 of them calling signals. They had win ratios of 75%-80% some days even higher from what I saw and experienced. D accused my friend of trying to siphon off his following and kicked him out of his group. Then D tried to expose him as being a sham trader not worth following. Words were said back and forth but the drama died down after a few days.
So what happened next?
Month 3 of the copier was offered at a discount and I think some people actually took the offer too. I didn’t though so I don’t know how well that third month went. All I know was that toward the end of that month talks of a group trading account began bouncing around the group. I was still a paying member so I stuck around of course (haha). The premise was that everyone would invest money into a single account. D would do all the trades and distribute the profits at the end of the month. Sounds like a good idea right? Yea I didn’t think so either so I passed.
Around this time a former group admin started his own signal service. He was one of the signal push traders as well but was having good results solo. Again D lashed out and accused him of losing trades on purpose. That way when he started his own group his results would look even better compared to the old group. Facebook live bashing ensued and finally flat-lined. I think a month went by after that. The group trading account was apparently doing really well. So well that D was only going to accept a few more participants before it was closed permanently. I Didn’t quite understand the point of limiting investors. Must have been a hype tactic…
Something interesting happened recently. Right around when it was time to pay his investors back, there were delays. Rumors started circulating. I heard different excuses ranging from waiting on the deposit to a grandparent in a car accident. Finally to having to leave town for a while to handle family stuff. Needless to say nobody got paid. A few days ago the group mysteriously was deleted and D’s personal Facebook page was deleted. Seems like D bounced on his investors a la Bernie Madoff. Was this the best Ponzi scheme run online by a 20 something year old kid or just a gross misunderstanding?
I’ve heard that D still plans on paying people and I checked to see his Facebook page is back but has no new activity. All I know is I’ve contacted PayPal to try to get some of my money back. For me there are just too many coincidences for me to think this guy is legit so I’m not going to deal with him or his associates anymore.
What did I learn in this experience?
Anyone can get scammed! I’m usually very cautious online. I use multiple passwords, only shop on reputable websites. And have never cashed a check from a Nigerian prince. Anytime I have a bad experience with someone it can usually be traced back to me ignoring some obvious red flags. To be fair my friend originally endorsed the group and I trust friendly endorsements.
Here were the red flags I overlooked.
- Disparaging and negative comments were religiously deleted by admins. They only wanted good results posted not people complaining about losing money.
- Members were kicked out for various reasons. Some were accused of leaking the trainings. Others for certain associations online. And even some for publicly calling into question the group’s results.
- The blame game was real. When it came to losing on the trade copier, news was blamed, the traders were blamed, accidental trades were blamed, and poor money management was blamed. The traders rarely owned up to the poor results and refused to discount the second month.
- Inconsistency online. I don’t know how many times group trading sessions or proof of results never happened. D even welched on a NBA Finals bet he made publicly on Facebook for like $300. Why if you’re so successful?
- Bashing people. How do you bash somebody that played a hand in your successes. Getting into online beefs with other traders like this is some sorta competition.
- The group trading account. I may have avoided it but I still didn’t see it for the pump and dump strategy that it was and that is so obvious to me now.
I definitely entrusted the wrong person but you can learn from my mistakes. Guys be careful who you trust online. Just because people call them an Expert or Guru doesn’t mean they are one! Do your due diligence before you give anyone online your money even if you are referred. You’d be surprised what a Google search and some pointed questions can teach you.
So have you ever been scammed or know someone that was? Share your story through the comments or via email. I’d love to hear it! Onward and upward!
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