交易考試新手指南

FSMA Warns Public About Suspicious Practices of Prop Firms

High-Cost Investment Cycle

The Financial Services and Markets Authority (FSMA) has issued a warning to the public about the risks associated with prop trading firms.

According to the regulator, these firms engaged in prop trading are under scrutiny for questionable practices that exploit consumers' financial ignorance and lure them into high-risk investments.

FSMA points out that prop trading firms operate by allowing consumers to trade various financial products, including stocks, bonds, commodities, cryptocurrencies, contracts for difference (CFDs), and forex products, without using their own funds.

However, the allure of these seemingly risk-free opportunities often masks complex financial traps.

FSMA states that those wanting to join prop trading firms must first complete expensive and difficult courses. These courses are not cheap and are designed to filter out less serious individuals while also generating revenue for the companies.

As a result, many people find themselves trapped in a strange cycle: continuously spending money on courses without ever getting the chance to actually start trading. It's like paying tuition fees indefinitely without ever graduating or finding a job.

After completing the courses, consumers receive a "certificate," which is essentially a diploma issued by the company itself, allowing them to participate in simulated trading activities.

This so-called investment is actually like playing a game - it's all fake. Prop trading firms give you a simulated account, and all the trades you make on it are not real. You think you're trading, but it's all controlled by the company behind the scenes. Worse still, you have no idea whether you can actually make money from these fake trades, like playing a game where you don't know the rules or if you can win prizes.

Surge in Prop Firm Ads Raises Concerns

FSMA has noticed a worrying trend of increased advertisements for prop trading firms on social media platforms, as well as the emergence of websites offering paid courses to help consumers meet the companies' challenges.

These companies often promote complex investment products like CFDs and forex trading. These may sound impressive, but they're actually extremely risky, and you could potentially lose all your money.

Seeing this situation, FSMA is essentially shouting, "Everyone be careful!" They're warning people to be wary of these prop trading firms and related organizations.

FSMA particularly emphasizes that if you really want to deal with these companies, you must be especially cautious. They repeatedly remind everyone that this type of investment is inherently very risky and it's easy to lose money. It's like saying, "Think carefully before you get involved, don't regret it when your money is gone."

Reference:FSMA Warns Public against Dubious Practices of Prop Trading Firms