Is Tradera a pyramid scheme? This is the question that so many ask these days. The short answer is: yes, it is. I joined Tradera to find out how it worked. I liked their concept, but then I preferred not to work with them for the reasons I am going to clarify here in this article. I will reveal everything about Tradera and will also give you a general criteria that you can use to distinguish whether a program is pyramid scheme or not. I will also explain about the legal and illegal forms of pyramid schemes and MLM marketing.
Is Tradera a Pyramid Scheme?
First, please note that not all pyramid schemes are illegal. It is the same with MLM programs that are almost the same as pyramid schemes.
Pyramid or MLM programs are not necessarily illegal. Multi-level Marketing is a proven kind of marketing strategy that many well-known companies have been doing for decades, and they are still working and no government has stopped them.
What makes a pyramid or MLM program illegal is offering no product/service and making money through the membership fees only. It becomes worse when top level members make money through the membership fees that the lower level members pay, and they make money only because they are at the top while they do nothing.
In illegal forms of pyramid schemes, members must refer and recruit new members in order to make money. As a member, if you refer people who sign up for an account and pay membership fees, you will make money, while you also have to pay membership fees. If you stop referring and recruiting, or if those you’ve referred stop paying membership fees and referring new members, your income will go down and you will stop making money. So, in order to make money in an illegal pyramid scheme, you must (1) sign up and pay membership fee, (2) refer and recruit people, and (3) push them to duplicate what you do to grow your team. There is no product or service offered. Membership is the only thing they offer.
Not all of those who sign up for a pyramid scheme are able to refer and recruit. Therefore, they pay the membership fees for a while, but they don’t make any money. So they stop after a while. Also, many others do their best to refer and recruit and they make some progress, but as they cannot do it strongly and consistently, they don’t make the money they expect, and so they stop referring and recruiting and paying the membership fee as well.
That’s why all illegal forms of pyramid schemes collapse after a while: Top members keep making money through the efforts of the lower level members. But lower level members give up because they keep spending time and money for a while and they can’t make any money, or they don’t make the money they expected. So they stop referring, and so their higher level members stop making money and they also stop paying membership fees, and so on. This goes to higher and higher levels gradually, until the whole system stops.
In legal forms of pyramid schemes, still you must refer and recruit to make money. However, the difference is that membership is not the only thing they offer. They offer some products/services that you can sell to earn commission too. Sometimes, they combine these two. It means, you pay a membership fee while you must also buy some products to become eligible to earn commission or increase your commission rate.
Therefore, it is a little hard to distinguish legal and illegal forms of pyramid schemes from each other. That’s why most people prefer not to join any forms of pyramid schemes at all because they don’t want to get involved.
Now, let’s go back to Tradera. Is Tradera a pyramid scheme?
Yes, it is because you must refer an recruit to make money as a Tradera member. They offer two kinds of membership:
- Client Membership
- IBO Membership
As a client, you can have access to what they offer as their Forex-related services:
- Trade Academy (training)
- Trade Alerts
- Live Trading Sessions
- Fundamental Analysis
- Market Forecasts
- Member Support
Indeed, what they offer as “Client Membership” is the product they sell. As a client, you won’t earn any money through their referral program. If you want to earn money as a referrer, you must sign up for their other membership as well which is called IBO. In order to have access to their Forex-related services and earn commission through their referral program, you must have both the client and IBO membership at the same time. Their client and IBO membership cost $99 and $15 per 28 days respectively.
There is nothing wrong with it so far. However, the question is: how can you earn commission through their referral program and compensation plan? The answer of this question proves that Tradera is a pyramid scheme:
They have 12 levels or ranks in their referral program:
- Duke / Douches
- Prince / Princess
- King / Queen
- Emperor / Empress
- Legend 100
- Legend 200
- Legend 500
You become a Founder if you personally refer three new members. But you won’t earn any commission as a Founder. However, if your three referrals also refer some others and you collect ten clients in your team in total, you will upgrade to Knight level and will earn $128 per week.
Please note that all referrals must have a client membership which is $99 per 28 days, otherwise you won’t reach the rank/level. Your team must grow and grow until you finally have 75,000 clients in your team. If so, you will be in the Icon level and will make $250,000 per week or $1,000,000 per month. It is not only that. There are some distribution requirements that have to be met to reach the levels/ranks. Therefore, Tradera is a pyramid and MLM scheme definitely:
Is Tradera Pyramid Scheme Legal or Illegal?
A lawyer can answer this question precisely. I am not a lawyer. But now I think that Tradera is close to the illegal form of pyramid scheme because the product they offer (client membership) is not indeed a real tangible product. It is a virtual product that is there only to pretend that they are offering a product.
Other pyramid scheme companies like Herbalife try to sell tangible products like weight loss or nutritional supplements, just to convert the illegal form of a pyramid scheme or MLM marketing into the legal form. In spite of this, everybody knows that people don’t buy the Herbalife products because they are good and useful products. People buy them because they have to do it to become able to make money through Herbalife’s referral program and MLM compensation plan.
It is the same with Tradera, with this difference that unlike Herbalife, Tradera’s product is not even a tangible product. Members also have to buy Tradera’s product if they want to make money through Tradera’s referral program compensation plan. When it is a must for members to buy a product to become able to earn commission, the pyramid scheme becomes closer to the illegal form. And it becomes even closer to the illegal form of pyramid schemes when referring and recruiting new members is the only way of making money, which is true about Tradera. In Tradera pyramid scheme, you must refer and recruit and your referrals must buy the client membership for $99 per 28 days, otherwise you won’t make any money.
Will the Tradera Pyramid Scheme Collapse Like All Other Pyramid and MLM Schemes That Work Based on Referring New Members?
I think it will. The reason is clear and was explained above. 99.99% of those who join are not able to refer anybody. Therefore, they will pay the membership fees for a while and then they give up, and so the top earners will stop making money after a while.
When these programs are new, they grow so fast and the early members who have joined when the program was launched will make a lot of money. People’s excitement and enthusiasm promote these kinds of programs very fast at the beginning because all members think that they will become rich and millionaire through the program. But 99.99% of them are wrong because they can’t refer anybody or enough number of referrals to start earning a reasonable amount of monthly income. Therefore, they will give up and stop paying the membership fees, and so the program will start collapsing.
The only thing that can save Tradera from collapsing is the quality of their client membership. If they offer really strong Forex trading training, alerts, analysis, etc. as they claim, then Forex traders will keep paying the $99 client membership fee just to receive these Forex-related stuff. These people are not after making money through referring others. They just want to trade Forex. Therefore, these members are the ones who pay and will keep the program alive as long as the Forex-related stuff they receive is exactly what they really like to receive. If not, they will also stop paying the $99 client membership fee.
So it is possible that Tradera pyramid scheme doesn’t collapse because of the Forex traders who may like what Tradera offers through their client membership package. However, the number of these people who can afford to pay $99 every 28 days is not that high. Many of them will stop if they see that they are not making money through the Forex-related alerts and analysis they are receiving from Tradera. It is not easy to provide consistently profitable Forex trading alerts that make money for people consistently, and this is one of the other big challenges that Tradera will be faced with.
Is Tradera a Ponzi Scheme?
No, it is not. Ponzi schemes have a different structure: Ponzi Scheme Explained in Details
As I mentioned above, I joined them few months ago and were a member for 1-2 months. Their concept looked good to me at the beginning. But then I saw so many technical problems. Their site went down for a few days sometimes without any prior notification to members, which means they don’t consider any value for the members who have eagerly joined and paid the membership fees.
Later, they revealed that thousands of their members’ personal information, including their payment and credit card detail had been stolen, which is a disaster for a company that is dreaming of becoming huge and the best.
Their founders are way too young and inexperienced for such a project, and so they will make lots of mistakes and can be in trouble. They have already made lots of mistakes.
Therefore, I stopped my membership and left them alone with their problems.
Launching such a program is not everybody’s bread and butter. It needs lots of knowledge, experience and wisdom. Wanting to become rich and famous is not enough to run a scheme. It needs lots of other capabilities and qualifications. Everybody wants to become rich and famous. But those who can launch and manage a strong program are rare.
Instead of joining programs like Tradera pyramid scheme that will make money for you only when you refer and recruit which is something I guarantee that 99.99% of people cannot do, join programs like The LuckScout Club that make you a real online entrepreneur and earner. As a member of The LuckScout Club, there are so many things that you can do to make money. This program is developed in a way that it works for everybody, not just for those who can refer and recruit. You can make money even if reading our articles and web pages is all you can do. However, you can publish contents on our website and make even more money. You can sell your own products on our website and make a lot more money.
There is no higher and lower levels in The LuckScout Club program. Indeed, there is no level at all. Members of The LuckScout Club are all the same and they all start from the same line every month. The LuckScout Club system is not based on referring and recruiting, and your income is not dependent on your referrals’ activities, although all members’ activities help the community to grow and make more money.
The LuckScout Club system turns you into an online entrepreneurs who makes money consistently and independently. While your participation in programs like Tradera pyramid scheme only make other people rich, your participation in The LuckScout Club will make you a proud online business owner.