Ep.76- iMarketsLive: A Modern Day Pyramid Scheme That Thrives on Social Media

Read Time: 5 Minutes

TL;DR

  • iMarketsLive (IML) is a modern day pyramid scheme that gets your attention through FOMO.

  • Once you have reached out to an IML person and signed up, they do a bait and switch to recruiting.

  • Anyone that became rich from IML is done from recruiting. None from actual trading.

  • IML’s trading platform is a means to an end, which is ultimately recruiting.

  • IML’s defense “FOREX IS NOT A SCAM” is a non-answer answer because IML is not Forex.

  • Understand the key to win in real financial markets is information, and trading is a zero-sum game.

HOW I LEARNED ABOUT iMarketsLive

Two years ago, I first heard about a company called iMarketsLive (IML), through social media posts from someone I know. Since then, I kept on seeing more and more posts about IML in my feed across all social media platforms. It may have been in your feed by now.

At first glance, the nature of IML is murky at best. To their credit, they are able to capture your attention quickly, because they make you think you can make easy money fast. You probably have googled a little on your own, or even listened to a spiel from someone at IML. Now you are wondering, is IML a foreign exchange platform, an education platform, a pyramid scheme, a recruiting firm, or your best chance to get rich? The chances are, all of them have come across your mind, but out of human nature, you make yourself buy into the belief - this is your chance to get rich quick with minimal effort.

Today I am going to give you my two cents on why it is a pyramid scheme, and why you should stay away, especially if your motivation is to make easy money through currency trading.

THIS IS WHAT IML TELLS YOU

On paper, IML is an online education platform that provides education products in the space of foreign exchange, with four pillars: tv, academy, harmonic scanner and web analyzer. It sounds fantastic and sophisticated, right? Usually, the combination of words like “foreign exchange”, “harmonic scanner”, “currency trading” would intimate us. But IML did the opposite. They drew people in. They did so by taking advantage of our greedy human nature via social media.

Think back about the first interaction you had with anything IML related. That post/picture/video did not advertise the product. Instead it showed someone making a lot of money in a nice car. All of a sudden, we became interested, because they are telling us we can be filthy rich by quitting our day jobs, and trade in our pajamas, pretty much a typical dream for most millennials.

When it is too good to be true, 100% of the time, it is. IML is no exception.

THIS IS WHAT IML ACTUALLY IS

IML is a modern day pyramid scheme that gets your attention through FOMO (fear of missing out). They do so through the following two simple, effective steps.

  1. Social media posts that exploit your FOMO

  2. Bait and switch

Step 1: Social media is their customer acquisition strategy. You typically see three types of posts: money flash, inspirational speeches, and why IML is not a scam.

  1. Money Flash: Most of the posts you see are how IML traders are getting rich through trading. You may see a screenshot of their profit from that day, or you may see a nice car, a nice pool, or a nice apartment in the background. At this point, you are not thinking about how awesome these people are, instead you are thinking about how awesome it would be if you were in their shoes. Now, they’ve GOT you.

  2. Inspirational Speech: The second type of posts is about some kind of life lesson or a generic inspirational speech. A few typical ones are on ‘work hard, be grateful’, ‘showing respect’, or “being a great leader”. None of them have any direct correlation to making money through trading. But they help build a persona of social good.

  3. Why IML is not a scam: A lot of posts are about defending why IML is not a scam. Why do they do that? Because it sure feels like one. I don’t know if “scam” is the right word to accurately describe IML, but it is no doubt a pyramid scheme. The most common response strategy is to divert the question from “ IML is not a scam'“ to “foreign exchange is not a scam”. The latter is absolutely true, but the former is not. I have a section below to explain it in detail.

Step 2: Once you have reached out to an IML person and signed up, they do a bait and switch. Before you signed up, you may have had the idea that you can make money through trading in your pajamas. After you signed up, you learn that being an independent business owner (IBO) is the true way to make money here.

How does it work exactly? You make money through recruiting more people, typically from showing how rich you have become by posting on social media. But first, you have to sign up as an IBO yourself. As of April 2019, it costs $16.71 a month. If you are interested in seeing how much money you can make through recruitment, here’s an old compensation structure to give you an idea.

By the way, did you know, before anyone signs up, you have to enter who referred you? It is not a coincidence. No one who joins IML joins organically. Think about your other experiences in life. If you want to open a checking account, they don’t ask you who referred you. Why do you have to do it here at IML? Because it is a pyramid scheme, the person who referred you is making money off of you.

IML’S TRADING PLATFORM/EDUCATION IS A MEANS TO AN END

IML does a good job of celebrating people who are rich through the company, and posting it on social media. But if you look carefully, none of them became rich because of trading. They did so because of recruitment. I have seen quite a few posts about someone making it into “Chairman x”, which means this person has recruited a ton of people under him, thus making him a lot of money.

The tech/trading piece is simply a means to an end, a veneer or a facade. You can replace it with almost any other random businesses, such as selling GoT mugs, or bouncy houses. It doesn’t matter because that’s not the business. The business is to wave it as a flag to make it seem legit, so you can bring people in for the real recruitment business. That’s where the money really lies.

IML’S MOST COMMON DEFENSE: FOREX IS NOT A SCAM

When people question the legitimacy of IML, its most effective and clever defense is that Forex is not a scam. They often say something like , “just look at the currency traders from all the big trading houses and etc”. It is such a Kellyanne Conway answer, an answer that makes you feel like it’s answering the question, but it is not.

First of all, let’s establish the fact that Forex is not a scam. There’s no doubt about it. But IML is a pyramid scheme. There’s also no doubt about it. IML’s true business is also not in Forex, it is in recruiting people. This is also a fact.

Here is an analogy. Imagine you ask this question to Bernie Madoff, who created a Ponzi scheme, scamming people billions of dollars - is Bernie’s company is a scam? Instead of replying directly, he tells you that investing is not a scam. You probably sense something is off with the logic. And you would be right. This non-answer breaks down because Bernie’s firm is a scam, exactly for the reason that he was not really doing investments. Similarly, IML is a pyramid scheme exactly because it does not really do trading, instead, its real business is recruiting.

TRADING 101 AND WHY YOU ARE UNLIKELY TO MAKE MONEY AS AN AMATEUR

I’ve taken economics classes in college, where the first thing we all learn is that the most fundamental thing about trading in the financial markets is that price moves on information. Asset prices are determined on future expectations discounted back to the present value. The same is true for the foreign exchange markets. In layman’s terms, in order to make money in day trading in currencies, you need better information than others, as you are competing against professional traders who work at large firms. I am not saying you can’t win, but you are at a disadvantage here. You don’t need IML to do that at all.

The other thing you need to know is that, it’s a zero sum game. Every trade you execute has another end. When you buy, someone has to sell. When you make a profit, someone has to take a loss. If you think about it this way, it is just mathematically impossible that EVERYONE wins. Even if IML has the secret to win no one else has, now it’s got tens of thousands of people getting the same information, only a few can win. Even this is resting on the assumption IML’s harmonic scanner is truly a secret weapon, which I do not think so. Why? If it’s that powerful, why doesn’t the owner use it for himself alone? Why share?