By Dave Landry
I hate to waste one minute on these scumbags, but as a public service, I plan on writing an article on red flags. The bottom line is, if it sounds too good to be true, it probably is. If I showed up at your house with some sort of magic elixir, you'd kick me off the porch. Yet, trading Koolaid is served up daily on the net and you drink it up. Here are my random thoughts and questions:
1. Are they "one-hit-wonders?" Is there claim to fame that they parlayed a small account or hit it big on one trade? Could you "rinse and repeat?" And the bigger question is, could they? This isn't to take away from them what they have accomplished (allegedly?). The point is that you can't sell a lucky streak (or lucky once), being in the right place at the right time, a loophole that has since closed, etc. Repeatability is key. If I could turn 10k into $1,000,000 consecutively, you'd never see my fat arse again.
2. Are they selling you a lifestyle through rented Airbnb homes or standing in front of a private jet on a tarmac? Or worse, do they tell you that you can easily go from being heavily in debt to a millionaire? Said alternatively, do they prey upon the destitute? Trust me, if you're broke, trading isn't going to get you out of your hole. If anything, it'll dig you deeper.*
3. Do they show you cherry picked trades and not show warts and all? Do you tell you what they are going to do before they do it and then do it-or, do they "pump and dump?" (i.e., are the profitable because they are selling their positions to you?)
4. Do they have a criminal background or are they currently indited? "Sunlight is the best disinfectant." And, the Internet can be pretty good sunlight, especially watchdogs such as the BBB, SEC, FTC, and other official 3-letter organizations. Never underestimate the ingenuity of a con artist. Some of the best of the worst have taken to publishing reviews which by the headline make you think that the person truly is disingenuous, but are actually (fake) glowing reviews. Take forums with a grain of salt.
I'm not saying I'm the Grand Poombah-far from it. What I am saying is based on reality. I get my ass handed to me frequently. I'm occasionally right big, but in the meantime, I grind it out and spend a lot of time "less wealthy."
5. Are they selling the "system of the month?"
System du jour seller: I have a great trading system. And, if you give me $1,000 of your hard earned cash, I'll sell it to you.
I just developed this new great trading system. And, if you give me $1,000 of your hard earned cash, I'll sell it to you.
Wait, come again? What happened to the system that were selling last month? Obsolete already? That one month really flew by. This new system must be even better!? (sarcasm implied-BTW, it's my second favorite "asm." My first? enthusi-ASM of course!)
6. Are they being sued by the FTC for $137,000,000 for bilking custormers?
Okay, this was "low hanging fruit," but these are the exact guys I had in mind when I started writing about these scumbags.
*DO get educated though. And, education doesn't have to be expensive. Shameless plug, for less than 50 bucks a month you can gain access to a plethora of trading knowledge and bounce ideas off of other traders.