Should I trust this Forex trader?

Discussion in 'Forex' started by Learning2Trade, Jan 13, 2011.

  1. I stumbled across this guy "A Forex Manager" on the internet who promises solid returns using some sort of automated Forex trading system. He wants you to put $10K into Alpari UK and then he trades your money, assuring you that you thusly maintain control of your money. He cheerfully forwards me statements for other accounts he is working on to demonstrate how successful his system is. He is apparently located in Belgium and prefers email communication as English isn't his first language (??). He doesn't appear to be incorporated as a company (no company logo that I can see; email account is a simple gmail account).

    Am I world's number 1 sucker for believing there might be a threat of truth to his story? Has anybody else dealt with or heard of him? Is this some sort of classic scam? I am tempted of course to give it a try, but it seems a bit of an odd way to do business. Any feedback is greatly appreciated!
  2. heech


    Scam. He gets two accounts: goes long in one, short in the other. Half of his clients make money, half loses. He always wins.

    If you want a money manager, find one that's regulated by someone and has a proven/audited track record. In the US, that means starting with the NFA.

    Note: I don't know of him personally, just talking generally.
  3. cvds16


    I am from Belgium, just ask him if he is registred with CBFA, (which he won't be, but has to be) that'll scare his ass off ...
    rest assured it's not legal ... no doubt about it ...
    if he was any good, he would be trading the stuff himself ...
    Also I find it very funny he doesn't speak english as most people here speak it very fluently ...
    red flags all over the place ...

    EDIT: see

    EDIT 2: as I see it's not so clear in english, his company name should be amongst one of this list (I took the dutch version, but that counts for the whole country)
  4. Hi guys,

    Thanks for your responses, I really appreciate it. I emailed him inviting him again to talk on the phone (I do after all speak French) and he indicated he is from the north (Antwerps) and speaks flemish, so nogo on that one.

    I then asked him if he was a member of CBFA, and this was his response:

    "No, our activity (rental of trading software) doesn't fall under the bankcommission.
    We don't keep your monies, the broker (ALPARI UK) does and they fall under the control of their country.
    Check their website"

    Does this make sense to you?

    Every few days he emails me (no doubt via automated email) a statement of some account he started up on January 6, 2011, that shows amazing cumulative results. He also includes an attachment listing each and every transaction executed as proof as to how the account is making profit. The attachment gets longer and longer of course each time he sends it, with more and more transactions listed. I'm not sophisticated enough to understand how the transactions work, but it looks completely legit to me (?!).

    I then emailed him to ask if all his clients experience this level of profit, and/or if some take a loss using his system? (He had previously indicated that the trades, of course, are not guaranteed). His response:

    "As I told you in my previous mail, all clients are on the same system and all make the same profits.

    Who or what makes you doubt about that?

    I'm sending you every day my daily track record so you can control that I'm not only short (sell) or only long (buy) in my accounts.
    I have always as well long as short positions open in every account (you can check that on the statements).
    On the summary you can see that the amount of short trades almost fitts the amount of long trades."

    Again, am I crazy here or does this look legit? It is very tempting. After reading this, what do you think about it? Do you think I would lose my money with this fellow?

    Thanks again for your time and expertise!
  5. cvds16


    First really find it strange that he doesn't speak any english: litteraly everybody in Flanders speaks good english as it's mandatory at school ... especially someone with a higher education level like a programmer should have a good knowledge of the language ... that's not normal in my eyes ... and a big red flag ...
    seems like they found a kind of (legal ?) way around the 'providing investment advice' by calling it 'renting out software' ... seems the same difference to me ...
    my main point would be ... if it's so great, why doesn't he just trade it ... and why does he need you ...
    I'd never do it ... but then you might be missing out on the opportunity of a lifetime ... or an opportunity to get thaught something ... :D
  6. rosy2


    is it possible to get a list of people who invest with guys like this. that would be a goldmine.
  7. "Promises solid returns" is the tip off.
  8. olias


    Excellent point. The operative word is 'promise'. When you see/hear that word, walk away.
  9. It doesn't matter if it's a scam actually.
    It probably isn't a ponzi type scam, since it's a managed account
    at Alpari.
    He may not be regulated, Belgium is still at the development stage when it comes to regulating those type of services I believe. Same thing in other countries.

    What matters is the history of returns, no matter how good they are it's worthless if you don't have more than 3 years of it , ideally more. Beside a lot a lot of systems turn to crap after a few months, years. So if the returns are very high, too good to be true, well they may be true for some accounts, but it won't last anyway. So with a guy who can't give you more reassurance about his track record and strategy, and who is in Belgium where one or two local traders are notorious on ET for their wild claims , you should just take a pass on that one.
  10. Buddly, please, please tell me I am not wasting my time.

    "No, our activity (rental of trading software) doesn't fall under the bankcommission."

    SO what he is saying that he is renting his software to you and the software automatically trades your account, and he gets a fee from this. Now doesn't that sound a weeeeee bit strange.

    CVDS mentioned registration and not licensing, I don't know but to me if all you have to do is register, maybe pay a fee and do some additional paperwork each year don't you think a trader would do this to boost the clients trust and reach a larger pool of clients? HMMMMMM

    Also this is the kind of underground trading that gets folks in trouble, allow me to elucidate.

    What happens is the trader has his clients open up an account at a legit broker, this puts a firewall between the trader and the money, in other words, by way of POA he can only trade the account, but cannot touch the money except for a predetermined % and or fee each month that gets deducted from the clients accounts.

    Now all of these accounts are put into a block account, and each account is given a percentage, so that all of the accounts add up to 100%. Obviously the larger accounts use more % than smaller. This is basic, there are circumstances where an account can be over leveraged and more than 100% but I'll keep it simple.

    Now you think hey thats great, if the account makes money the trader and I make money!

    Weeeeeell maybe not, the trader has an agreement with the broker that gives him a "rebate" on trading fees or a kickback. This is not just for clients he has but mostly for the volume he does. So he writes a program that churns the life out of the accounts, he does not care whether you make money as long as he can "churn" not earn a living. If you run out of money, he finds someone else, and the beat goes on. Also don't discount what was said earlier about 2 accounts.

    So Da VIPER pulls back another FOREX Curtain.

    Also does he have an independently audited statement??? I would guess no.

    SO beware, the woods are full of Lions, Wolfs, and VIPERS

    The Ever Trying To Help VIPER
    #10     Jan 27, 2011