There are many ways that the scammers try to part traders from their trading capital. One way is the “pump and dump” scam, which is used on low priced stocks, which are also known as penny stocks. Technology and the Internet have created some new variants of this scam, which stock traders need to be aware of. This article helps you identify a pump and dump scam and understand how they work so that you can avoid becoming another victim.
Sometimes we are offered an opportunity for investment that seems too good to be true. How can we tell if it is a scam? A recent case called “Chartwell Enterprises” illustrates the main points of a scam.
A managed account is where you have an account with a broker (a stock trading account, a futures trading account or a forex account) and you let someone else trade your account. In addition to the brokerage, they also extract a performance fee. This is called discretionary trading. Another term for this is a CTA managed account.
In theory, you have a professional placing the trades and managing your money, they are trading tested systems, so you can just sit back and watch the dollars roll in. Is it this good in practice, and what do you need to know before signing up?
It is often said that if something seems too good to be true, then it usually is. This is the case with many of the trading systems offered for sale on the Internet. Many unscrupulous promoters prey on the desire of traders for a shortcut to riches. Learn how you can avoid becoming another victim of the scam artists