Dear Trader: ask the expert





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Question:

Over the weekend, I received an email titled “Earn 100k as a Trader”. Before this, I attended a free workshop after I had responded to a stock market training advert in the newspaper.

I am interested in learning, but in your experience, can a new trader go from debt to millionaire in 3 years of trading as some of these guys say...I’m a bit wary, but are these sorts of returns plausible? [- Simon]

Spread bet trader’s response:

Simon, this is an interesting question. I have to say that it is the question that I get most frequently.

Of course, if you were one of the clever guys that set up YouTube, then you could conceivably have gone from debt to pretty much multi-millionaire status in barely 18 months never mind three years!

However, to do the same through spread betting or any form of stock market trading is practically impossible for most investors including the people who write, and sell seminars off the back of the headline-grabbing adverts that you refer to.

You have to give it them...they sure know how to write headlines!

By “most investors”, I mean something like 99.999% of investors and traders out there. Of course we can all dream. In my humble opinion, that is what those adverts are preying on…they are dream merchants, selling dreams and little else.

As you aptly mentioned in your email, these ‘free evening seminars’ are led by professional motivational speakers whose only aim is to make you feel good about yourself for5 long enough to part with the best part of £3,000 for their ‘trading secrets’!

Oh, my mistake, it’s not actually £3,000 per person, they will give you an early bird 2 for the price of 1 discount if you bring your mate along too! Just like Tesco! lol

These spread betting claims ought to be criminal!

Now, let me address one or two of the crazy claims in this particular email that is doing the rounds:

Crazy Claim 1:

”Did you know private Foreign Exchange traders take home £100k to £2m per annum, with many traders starting with less than £10k in their trading accounts”? :

— What amazes me is that people fall for such bull**** without asking for evidence. Before you spend a penny on such courses, ask the ‘guru’ to provide evidence that he/she actually went from debt to millionaire status in three years through using the trading skills that they propose to teach you.

Ideally, these gurus would be able to present a line up of such private traders that:

(1) They have taught
(2) Now make £100k to £2m per annum
(3) Started with less than £10k in their trading accounts

If they can provide 5 such people, NOT 50, just 5, tell them to contact me immediately because then I will recommend their training course to the thousands of people who visit my website everyday. No kidding!

Crazy Claim 2/3:

”How to make 30-100 pips (that's £300 to £1000) per day, with incredible success rate... You can limit the risk on any trade to less than 1% of your account balance”:

Now, I have addressed these two points together to help you best make sense of what they actually imply!

If 30-100 pips = £300 to £1000 per day, this implies that you would be trading £10 per point in the forex market. £10 per point for new traders! I see no other way round it...these guys MUST BE MAD!

Furthermore, since most spread betting firms would not accept stop losses that are too close to the entry level. This makes perfect sense since the markets are volatile and none more so than the currency markets. So you can assume that your stop would be at least between 30—100 pips from the trade entry level.

This means that you stand to lose between £300 to £1000 per trade if you are trading £10 per point. If as the snake oil sales men say, you can limit the risk on any trade to less than 1% of your account balance, this means that must have at least £30,000 to £100,000 in your account balance to start with!!!

Again, I see no other way round it...these guys MUST BE MAD!

For a start, in my opinion, no one who is in debt should be thinking of stock market investment anyway, let alone getting further into debt in order to pay the exorbitant costs of those dodgy 'courses'! You will find that the marketers of those courses only make money from selling courses and probably don’t even have trading accounts let alone ever make a dime from the stock market themselves!

Here's my £3,000 tip: Delete their email. Never attend another 'completely free workshop' and for your cash's sake NEVER pay up for their course.

Have a great day,

Alex

Please keep the messages coming, I love to hear from you all.


Name: Paresh

Comment: Hello. This is a brilliant site. It does what it says on the tin.

I wondered if you could recommend some resources that would help me understand the charts and also any software that you think helps a spread bet trader. I am fairly new to this and want to see if I can get £200-300 pw.

------------------------------

Spread Bet Trader’s response:

Hi Paresh,

Thanks for your comments. It’s always nice to get such feedback from the users of the website.

I get a lot of questions from people asking me to recommend software. Unfortunately, the reality is that there is currently no software out there that a beginner needs to bother spending any money on. This is not because there are no useful software products on sale, but rather because most fail the basic requirement of actually helping the new spread better learn the ropes and move up the required learning curve.

As for resources, you obviously found the best of them: www.spreadbettrader.co.uk. Of course I would say that but don’t just take my word for it, a recent article by the FT gave spreadbettrader.co.uk glowing reviews. Jokes apart, everything you need as a beginner is provided on these pages for free.

Don’t make the mistake of focusing on how much you want to make per week. It’s one that so many novice spread betters make. Instead, start with the basics, learn the techniques involved, attend the training class if you want to speed up your learning process, sign up for the free spread betting opportunities newsletter, subscribe to the Market Timing Update when you’re ready to start real life trading…

Here are some resources to help you along the way:


Training class:

Ready to raise your game? Learn to spread bet like a pro


Spread Betting Articles

Basics of financial spread betting

Understanding the spread betting process

Articles to get you further down the spread betting learning curve


Free spread betting opportunities newsletter:

Free financial market analysis outlining spread betting opportunities


Market Timing Update:

Professional financial market analysis to take your spread betting to the next level



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