Not everything with the last word “trading” becomes legal or ethical. One must always and always consider knowing more and more about the trading platform and product where they are putting their hard-earned money.
A few years back, there was a hype around cryptocurrency, and people were blindly trading cryptocurrency on any random platform. In doing so they lost money trading in fake cryptocurrency apps.
Since cryptocurrency is legal but not regulated in India, it becomes impossible for traders to recover their money. However, people didn’t stop and continued looking for the easiest ways to make money.
This gave scammers, who are tech-savvy, the opportunity to create new software and apps that claim easy profits. Ignoring the dark side, people again fall for such scams and lose their money.
One of the newest easy options gaining popularity these days is the Color Trading Platform.
Colour Trading Scam or Not
Let’s get into the details of what it means and how colour trading works. As the name suggests, these platforms use different colors to indicate uptrends and downtrends. For example, the green color indicates an uptrend, and the red color indicates a downtrend.
Traders can take respective positions according to the color displayed.
People often call stock market trading gambling, so what would you call those involved in color trading, who are taking positions based solely on color changes in the app?
Every day, our team comes across at least one case of Color Trading where people lose lakhs of capital.
One such case is of Manik (name changed), who lost ₹1.5 lakh in a color trading scam. Manik said he came across a Color Trading app on Telegram. Initially, he didn’t understand how it worked, but later the scammer reached out to him and influenced him by showing easy gains.
Manik was convinced and registered himself on the app. He started trading with ₹30k and gradually added more, totaling ₹1.5 lakh.
For every trade he executed, the app charged him a ₹300 commission, and thus he ended up paying around ₹40k to the scammer.
He made a profit for a few days, but since it is pure gambling and provides no accuracy or any idea of risk-reward, he soon lost his entire capital.
Like any other scam, when he tried reaching out to the scammer, he found his number blocked, leaving no option for loss recovery.
Unlike other cases, this case can’t be reported to SEBI because neither Color Trading is legal nor regulated. The best one can do is report it to Cyber Crime. But does cyber crime refund money?
Well, it depends upon the documentation & sensitivity of the case. Hence, there is no guarantee of getting your capital back.
And therefore, it is important to become responsible towards your money. One needs to understand that there is no such thing as easy money or quick gains. If this were possible, big businessmen would put huge capital in such apps and get richer.
Real trading demands focus, in-depth analysis, knowledge, and skills. It can give you good returns if you put effort into learning and doing it honestly.
Today, it is about color trading; tomorrow, it could be something else. In simple terms, it will never stop until you stop yourselves from being greedy.
