The internet has brought us untold change. For those who remember the world before the internet, it isn’t easy to put it into words for somebody who doesn’t know a world without it. Although many industries have changed forever – and some have disappeared altogether – one industry that has benefited as a whole is the trading industry.
We say as a whole because it’s not all fun and games. While you can find some excellent advice online, there are also a lot of pseudo-traders who are selling snake oil. Social media is littered with people looking to take advantage of people by charging them money for investment advice.
You can start with the basics, and they are free. Learn basic economic terms like market cap, what drives the price of an asset, and other variables, such as what is deflation and how it works. Today, we will give you a few tips on avoiding lousy advice online and what to look for when it comes to trading tips.
Check Credentials
Check their credentials if you are taking trading advice from somebody online. Do they have a proven track record in the industry? Are there people who have taken their advice in the past, and what do they have to say about their methods?
These are vital things to consider, as you want to ensure the decision to trade your money comes from hard work and adequate due diligence. If somebody is selling a course via Instagram and they can’t prove any of their credibility, these are the people you want to avoid.
Checking resources online like LinkedIn or YouTube, or performing a general media search will help you harness the best results for the individual or business you plan to use.
Reputable Website
As we touched on in our previous point, if somebody has a handful of followers, no online presence and is offering to give you trading advice but wants you to pay, do you think they are acting in good faith?
Research the company or individual by checking out their website, and see if they’re registered to provide investment advice. Establishing whether or not they can provide evidence for having a proven track record in the industry usually starts with a simple website and online visibility. If a website has had a genuine SEO audit, it will rank well and have good visibility on top search engines.
Literature
Back before the days of the internet, people used to read books on how to trade. Honestly, they did! Some would head down to the local library or the bookstore and order books to help them understand how trading works.
These days, you can find all of this literature online at the click of a button. You can also download e-books and you can search for the credentials of the authors, too. Top trading books are written by finance professors at leading universities or people who have made millions in the market.
World-renowned traders often give insights in interviews; sometimes, you don’t even need to purchase any of their books. However, if you want to find bona fide advice and truly want to build your knowledge on the topic, literature is usually recommended.
Join Forums or Follow Prominent Traders on Social Media
Follow this particular tip with some caution. However, as long as you apply the other points we have made today when you look to join forums or seek out prominent social media traders, you will most likely find one you can trust and learn from.
It is complicated to trade any market successfully on your own. All markets are volatile and dangerous places to place your money. It is a slippery slope if you aren’t well equipped and are doing your own research and supplementing it with advice from professional traders online.
However, even by performing all of the tips we have touched on today, you can still be in a position where you will lose your money. This is because there is no way to guarantee a return in any market. It doesn’t matter if you are trading commodities, forex, cryptocurrency or stocks.
Your capital is always at risk, even if you’re a professional trader. Therefore, you should not overleverage or invest with money you can’t afford to lose. Ensuring you have an effective plan that gives you little exposure is a good starting block for learning about trading and managing risk.
A good knowledge base and community will help you up to a point. However, if you don’t know what to look for and haven’t performed adequate due diligence, you are only one or two trades away from losing your money.
