See these ten online financial trading rules for beginners.

Fancy yourself as a successful trader? Thanks to technological advances making financial trading more accessible to all of us, you could make your fortune online. But, be warned, there is a plethora of scam artists on social media who trick punters into believing they are trading experts and offer wrong advice.

James Bentley set up digital trading platform Financial Markets Online aiming to end the ‘wolves of Instagram’. His site educates people on the ins-and-outs of financial markets, a daunting topic for most people. Bears, Bulls, UPS, cryptocurrencies, Forex… the vocabulary alone is enough to make most of us feel queasy. We asked James to tell us ten rules for financial trading online for beginners and how to avoid the online con artists.

1. Don’t believe the hype

Instagram traders/scammers’ usual marketing ploy is to show off their expensive cars, watches, clothes and wads of cash they have managed to generate from trading. 99% of the time the guys that are promoting this do not own these items and if they did it would be highly unlikely it would come from trading the financial markets.

2. Can you speak to them or are they a myth?

Fundamentally if you are going to learn from someone you want to be able to speak with them over the phone, email and the most important face-to-face. If they are going to hide behind their Instagram cover then that is a massive red flag to not learn from them. Transparency is key when starting your financial education so make sure they are open enough to deal with you on a regular basis and not palm you off at the first chance.

3. Proven track record

Find out the experience of the person you are speaking to or going to be learning from. Don’t be afraid to quiz them on how long they have been trading, their experience and how they got into the industry. If they are going to be difficult in providing this information or something does not sound right – it more than likely is because they are not bonefide.

4. Successful clients

Can you openly see successful client results? As an educator, if one of our students is successful we like to shout this from the rooftops, if they are not doing the same then it is a concern. If they are posting student results then do check the validity of these by seeing what date these results were achieved. Showing something from the year 2000 and not someone more recent is not someone who I would want to believe.

Another way to check their success is to ask, are they willing to let you openly speak to one of their “successful” clients? If not, then this is a massive warning. We have open client groups meaning our members can speak to clients on a day-to-day basis and able to share contact details. Trading is a very lonely place so it’s important you have a network that can support you both from the educator side and as a client of their services.

5. Positive Reviews

Do they have a good reputation online? With the likes of Google, Trustpilot & Facebook and other independent review sites, you should do your research and see what other people have said about their company. If there are no reviews that would be a concern, secondly if they are all negative, stay away! Companies have been known to post fake reviews on these sites but often slip up by forgetting to change the name of the reviewer. A spot check on this sometimes reveals that they are employees of the actual company. The moment you see this, I would run!

6. Company set up

Are the owners of the business, if they are based in the UK, registered on Companies House? Is it easy to find their information online about the business? We would recommend staying away from companies who are based outside of the UK. There is often a reason (not a positive one) why they wouldn’t chose to register their business in the country they are operating in.

7. Did they approach you?

Instagram scammers and wolves tend to bombard with you with comments or direct messages. Reputable companies will not try to chase you on Instagram leaving comments or messages to promote themselves. Either you will hear about them or they will use the traditional methods of advertising their services. Stay away from anyone who says they are “teaching people to make millions online” or they “managed to change their life once they met @fx_ben (one I just made up) and learn how to trade with him.”

8. Do they have an office?

Can you go and see them? Do they have a premise you can find? Can you meet them and learn how to trade? The best Instagram scammers claim to work from home or say do not need to, as they have a trader lifestyle. This is not true. The reason for this is two-fold. Either they want to make a quick escape or actually they do not want you to see them in reality.

9. Who are their partners?

Educators will refer you to their partner brokers. This is not a problem. The concern should come if the partner they send you to have a bad reputation or is not regulated fully in the country they are operating in. Again similarly check the broker they want you to work with and see if that broker has a good reputation, is FCA regulated (so you money is protected if you are a UK/European citizen) and also that there are not huge spread volumes when using the broker. As how much they charge to trade certain assets.

10. Risk management, trading strategy & signals

Last but most definitely not least is how is there education built. Are they going to teach you correct risk management techniques? At the very most, a new inexperienced trader should not be using more than 2% risk on their account. If they are telling you to do otherwise, question them. What is their trading strategy? Can they explain their trading strategy to you comfortably and do you get confidence from what they are telling you? If no, then stay away. Its important to know the people you are learning from believe in what they teach and have good reasons to use such a strategy. It’s like when learning how to drive you wouldn’t learn from someone who has never passed his driving test.

Be also very careful with any “signal” service providers. They are often copying the signals from other people. It is not their own and will encourage you to place trades with high risk. This is often the cause for people to blow their accounts and lose money. Only work with people who know their own strategies and trade those very same strategies.

If you like this, you should read:

AYU – the app for the hedge-fund world
Revolut – Ditch those dog-eared cheque books, never queue in a bank again
Interview with Christ Morling, the tech entrepreneur behind

May 2019