How To Spot A Phony Trader
With all of the stimulus being thrown around during the Coronavirus, thanks to unemployment some people have a little bit of excess cash. Most of these recipients aren't used to having extra cash lying around and want to be smart not to waste it. This is blood in the water to a scammer.
Three separate times over the last 7 months I have been accosted by a supposed FOREX trader looking for funds for his trading account. They've promised returns of 5-10x the initial investment in a matter of weeks, claiming to have an unbeaten algorithm that can always make money and never fail. This is red flag number one. Anyone saying they never fail or that they have a foolproof way of making money, or my all-time least favorite "this market always goes up", ugh FUCK YOU. I led a team that placed 1st in a worldwide investing competition, I know the craft incredibly well, and I can tell you with absolute certainty that even the best investors can be wrong. So again, this is red flag number one.
Number two, they don't like talking about the specifics of their investing strategy. Even if you aren't huge into finance, and maybe you don't know the terminology all that well (fuck the terminology btw) just asking general questions about how the algorithm works will be enough. If they get angry or frustrated, obviously this is red flag number two. If they seem to be able to explain how their process works they're probably legitimate. But always, always, fucking ALWAYS ask what their investment process is. Ask them how the algorithm works and what it looks for.
And lastly, ask them why they need the funds. If their investment process or strategy is so good then ask why they don't take out a loan or manage money for a bank. If a strategy is really that good, I promise you that the big boys on Wall Street have heard of it or use it regularly, so just know you'll never beat them in that regard. If they can't explain why they need your stimulus check instead of managing money for millionaires and billionaires, then this would be red flag number three.
At the end of the day, if something seems to be too good to be true, then it probably is. The great news is that investing for yourself actually doesn't take much skill. Check out my other posts to find the best way to invest your money, the answer is almost always "invest for the long term."