Forex trader Raymond Omosa, popularly known as Kenyan Prince has explained how some alleged forex scammers make money by convincing unsuspecting traders to deposit cash into trading platforms, while displaying balances that may not represent actual funds.
According to Omosa, the scheme can become profitable for the people behind the platform when thousands of ordinary traders are brought together.
“Let’s say mko 1,000 kila mtu aweke $5. Hiyo ni $5,000 kwa site,” Omosa explained.
“Let’s say mko 1,000 kila mtu aweke $5. Hiyo ni $5,000 kwa site,” Omosa explained.
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He claimed that some of these platforms are designed in a way that gives the operators an overwhelming advantage, with the system allegedly structured around a 90% loss rate for ordinary traders.
Omosa also questioned the authenticity of some of the large balances displayed on such platforms.
“Ukiona mtu ako na $1,000 kwa balance, most of the time sio real,” he said, arguing that the figures displayed to users can allegedly be created by the people controlling the platform.
He claimed this is one reason why it can be difficult to see users successfully withdraw large amounts of money.
“That’s why ni ngumu uone wakiwithdraw more than $500,” Omosa said, adding that some users may struggle to withdraw even $30 because the balance they see could simply be a figure generated by the platform.
The 90% Loss Rate
Using an example of 1,000 ordinary traders, Omosa claimed that the system could be structured so that approximately 900 traders lose their money while only 100 make winning trades.
“For every 1,000 ordinary traders, 900 will lose,” he explained.
He further argued that even the traders who win may not necessarily make significant profits.
According to Omosa, if a trader risks $5 on a trade, the potential profit could be as little as $1 or $2 under the alleged setup.
“Imagine risking a trade of $5 to make $1,” he said.
