“A man who commits investment fraud”
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It’s quite a sharp title, but if you think about it proportionally, saying “almost all” might not be an exaggeration. There might be no need to specify “with solicitation.” In any form, it’s something that’s done in business.

If you look hard, there might be some conscientious schools or services out there. Even so, when you think about the motives of the people who run these schools or services as a business, that is, the operators, you can’t help but have doubts.

It might be something that can only be said specifically in the field of investment (including speculation like FX), but there are simple questions like, ‘If you’re so good that you can teach others, why don’t you make money in the market?’ or ‘If it’s such a good service that you offer, why don’t you use it yourself to earn money?’ This is a field where these naive questions hit the mark.

Their sales tactics

One of the most effective excuses (or justifications for running schools or providing services) to the aforementioned issues is the “hobby of the wealthy.”

Statements like, “I’ve already made enough money. Now I want to focus on nurturing investors,” or emphasizing that they have reached the societal or acknowledgment stages of Maslow’s hierarchy of needs are common.

Then there’s the “search for comrades” type. They convey sentiments such as “I want to create a team that earns” or “I desire a situation where we can all hone our skills together.”

For instance, in the U.S. or Europe, prominent investors might host workshops for exorbitant fees, or major banks might hold seminars (this might also happen in Japan).

However, from what I know, unless organized by notable individuals, corporations, or institutions, it’s typical to utilize one or both of the two appeal types mentioned above.

And the vast majority of these, based on my experience over the past decade, are either scams, quasi-scams, or simply a waste of effort and money.

…By the way, even when organized by notable individuals, corporations, or institutions, there are many times when they offer content that can essentially be deemed as scams.

In the realm of cryptocurrencies, scams related to ICOs (Initial Coin Offerings) that claim a particular coin will appreciate in value became popular during the cryptocurrency boom.

In summary, the “hobby of the wealthy” and “search for comrades” methods are common sales tactics in the field of investments and speculation. In addition, the “crypto ICO” and “notable” methods also exist.

To sum up this page…

While the discussion is quite negative, if I write on this topic in a blog called “investor’s failure notes”, it’s only natural. Moreover, I too have been victimized in the past by such harmful investment-related products, losing both time and money, which inevitably leads me to adopt this tone in my arguments.

That being said, it’s not that I have stories of being defrauded of a large amount of money or any incident-level tales. To put it simply, all I want to say is that the investment-related products and solicitations that cling to you everywhere, from SNS to search markets, are annoying.

And, seeing them in so many places probably means that there are just as many people falling for them. It’s a sentiment that’s difficult to put into words.

My encounters with suspicious investment products

Automated trading software

Around 2013, after moving from the U.S. to Europe, I started getting interested in Forex (FX). With my naive thinking that FX was simply about “buying low and selling high,” the first thing that caught my attention was “automated trading.”

When I Googled it, a myriad of FX automated trading software was being sold. I found one that seemed good after some research, but my judgment was solely based on what was written on its landing page.

In other words, I was thinking of purchasing it without even checking external reviews or doing any basic background checks. Back then, I didn’t have a set process or checklist for making decisions. Essentially, with my lack of information, I was the perfect prey.

What held me back from purchasing it was the software’s price, which was around 800,000 JPY (approximately 7,000 USD). I didn’t have that kind of disposable income at the time, but I was thinking of somehow saving up for it. And once I bought it, I was under the illusion that money would come in automatically.

It sounds ridiculously naive, but I knew nothing about investment or speculation and had low internet literacy. Looking back, I think it was understandable given the circumstances.

Eventually, as I searched more about FX, I realized that it was a scam product and didn’t buy it. By the way, the company selling that software seemed to have kept changing its name and product names while selling high-priced software. I’m not sure if they’re still around now.

Automated trading software 2

However, I did try my hand at 2-3 other automated trading software that were priced more affordably. I believe one of them was named something like “Wallstreet …”, and it cost around 20,000 to 30,000 JPY (approximately 180 to 270 USD).

I purchased them through a Japanese blog where the author conducted backtests on several automated trading software.

The results of every software I bought were terrible, making me wonder what those backtest results were all about. After a few months to a year of such outcomes, I discreetly stopped their operation.

There was one software that was profitable for several months, but when the market experienced sudden fluctuations, it had a significant drawdown. Eventually, by the end of the year, it consistently showed negative returns.

Automated trading is indeed a trend

…To be fair to the reputation of the automated trading software industry, I believe that the method of using a program for automated trading is not inherently flawed.

In fact, it seems that nowadays, there are no humans in the dealing rooms of major banks; instead, high-speed computers carry out automated trading continuously.

However, this means that from the user’s side, there’s a demand to discern and identify quality software (assuming it’s being sold to the general public).

This includes recognizing current market trends and verifying whether the software is adaptable to the current market conditions. Deciding things like, “I’ll stop operating the software under these market conditions.”

If you’re programming the software yourself, even more trading skills are likely required.

Moreover, since the results can change based on parameters and other settings, there’s a need for continuous trial and error, including technical approaches.

Considering the effort and time spent on this, I felt it would be better to allocate resources to learn manual trading methods. This is the reason I gave up on automated trading.

Mirror trading

Next, I became interested in mirror trading. Mirror trading is essentially a service that automatically copies the trades of skilled traders. It is provided by FX-related websites and exchanges.

The one I tried was that of a certain FX website.

When you go to the mirror trading page, traders are listed along with their performance data, and you choose the trader you want to copy from there.

So, when that trader takes a position, the same position is automatically taken in your account in real-time. The same goes for settlements.

The reasons I stopped using it after a few months are as follows: First, as expected, the performance was not particularly good. There aren’t many traders who can consistently win.

And even traders with a decent streak might disappear. So then you have to look for someone else. In other words, you become dependent on that particular site or service.

You’re risking your own funds on a trader you know nothing about, and in the end, nothing remains.

If I were to tell automated trading software providers, “Why don’t you earn money with it yourself?”, I’d say roughly the same thing applies to traders registered for mirror trading. Why go through the hassle of registering in the first place?

If that person or product truly can make money, they should be able to earn more and more on their own without the need for customer support, registration, or other troublesome tasks.

Online school

The same can be said for running a school. But if presented with the kind of pretext I mentioned at the beginning, there’s nothing to do but accept it.

That being said, I once enrolled in an FX online school. I believe it was about 200,000 JPY for six months.

The reason I decided to join that school was largely because I had been reading the instructor’s blog and emails for a considerable amount of time.

I didn’t think that just listening to someone talk in a course format would make me profitable, but I thought I could at least gain some foundational knowledge about day trading.

Having experienced the online school, my candid impression was that it was neither particularly good nor bad.

I learned enough about day trading to not feel deceived, but it was still not enough to become what you might call a consistently winning trader.

As the school also pointed out, you can’t continue without verifying your methods. Realizing this clearly was a takeaway in itself. When interpreted positively, that’s how it seems.

Then again, in a world where most things are scams, perhaps achieving a result that’s neither particularly good nor bad should be considered commendable.

In the end, it’s up to oneself

My interactions with dubious investment-related products ultimately stemmed from the psychology of wanting to earn money by relying on others. The desire to make it a bit easier, to have it a bit more comfortable.

I believe there’s a correlation between how quickly one can break free from such thinking and whether one is truly suited for investment and speculative actions.

Given that, I suppose I would be classified as someone who took quite a long detour, which isn’t a comforting thought. …Well, I do believe there’s no point in comparing one’s aptitude with others.