Never before have the words "buyer beware" been more applicable than they are today. Wherever I turn I am being inundated with ads for the following products:
- How to start your own Amazon business
- How to become a millionaire forex trader
- How to become a millionaire options trader
- How to make at least $1,000/day guaranteed by trading futures
- How to become a penny stock millionaire
- How to become a social media influencer and travel the world for free while making money from your social media content
You know how the pitches begin: "I'm well known as the top stock trading trainer in the entire world...." OR "I turned $12,000 into $5 million...." OR "I'm one of the top real money options traders in the world"......And the latest one... "I'm a MENSA verified genius trader who has made millions in the stock market."
And don't even get me started on the crypto scams which are more numerous than ever.
I could go on but I'm pretty sure you get the picture at this point. These people are selling hope to people that want to buy hope. The problem is there is little chance that the buyers of the above products will be successful, and that concept is the genesis of this blog post.
As someone who could potentially profit from novices falling for at least a few of the above pitches (I am an active market participant and may be on the other side of some of these novices' trades), let me be the first to tell you that all of the above sales pitches are fraught with peril and they are not close to being as easy as the salesmen make them out to be.
Last weekend I wrote a few Tweets about this topic after several of my friends began asking me about trading and getting into the stock market:
Because my field of expertise is the stock market and not selling on Amazon or being an Instagram influencer, allow me to address what the stock/option/forex market pitches aren't telling you:
- They won't tell you that it takes money to make money and they won't address proper bankroll management and what it takes to be properly capitalized as a trader. Trading success is out of reach of 98% of the population simply because they are undercapitalized.
- They might even promise to bankroll an aspiring trader who completes one of their $3,000 trading courses but they won't tell you about all the costs involved with trading through them until you're already too far into their game.
- They won't tell you that 95% of new traders lose money their first year of trading. Trading is the furthest thing imaginable from a get rich quick scheme.
- They won't tell you that they can't guarantee you anything. Your success or failure in markets is entirely up to you and your ability to master your own mind/psychology and develop a system that works, then follow that system while intently managing risk.
- The forex guys won't tell you that a novice forex trader has a 0.0% chance of being successful in their first few years. By successful I mean consistently profitable.
- They won't tell you that trading less and being extremely selective with trade entries/exits is the key to being consistently profitable, because they will likely want to be your broker and they make more commissions from more active traders.
- They won't tell you that bankroll management and position sizing are far more important than trade setups and technical analysis.
- They won't tell you that in the 2020 market environment that most chart patterns don't work the way the textbooks teach you.
- They won't tell you that all of your innate human instincts and cognitive biases will cause you to do the wrong things consistently and in turn lose money in the markets.
All the scammers have come out of the woodwork in order to profit from $1,200 stimulus checks, $600/week unemployment payments, and a huge portion of the population that is now unemployed with time on their hands.
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