The digital world has impacted every industry and none so more than the world of trading and investing in the forex, stocks and commodities markets. It is also because of the digital space we now find ourselves in that we also have cryptocurrencies to add to the list of tradable markets.
Rewind to an investing world before the internet and you have images of traders standing in “the pits” of institutions shouting and screaming at each other and signalling signs to each other. There were also telephones involved when entering and exiting trades with brokers.
Watch the 1980s classic, Trading Places with Eddie Murphy, if you have not already to get a feel of what I am talking about.
Those days, of course, are long gone. You still have the Chicago Board of Exchange but it looks like the cockpit of a giant space shuttle today compared to the WWE Royal Rumble feel it had of yesteryear.
With the advent of the internet and the tech age meant the inevitable evolution of investing moving online and with that came huge benefits for the budding private investor. The playing field has been levelled and the opportunity to create a successful investment portfolio was not limited to just those on the inside, it had also been extended to the everyday Joe Bloggs.
However, that also came with challenges. Official broker stats being released confirm that more than 80% of private traders and investors go on to blow accounts and so the question has to be asked, where has it all gone wrong?
The answer is actually quite straight forward and one that you will likely already be familiar with. The online trading and investing space is largely unregulated and so it has become a platform for conmen and charlatans to practice quackery and to establish themselves as experts and gurus through the use of manipulative and unethical marketing techniques.
This quackery is a combination of hyped-up day trading courses, signal services, black-box systems, copy services and more offering quick riches and impossible daily returns which all play their part in why over 80% fail. They vary in price from the free to the cheap to the absurdly expensive and can also have the dreaded hidden upsell which £1000s of your hard-earned money is lost to before even opening and funding a broker account.
But it’s not all doom and gloom if you look in the right places. Buried underneath all this rubble of lies and deception you will find a handful of ethical and highly knowledgeable individuals running trading and investing communities who are guiding those asking the right questions and with the right intentions onto the correct path of investing success.
One of the benefits of online investing is the creation of the online investing community and social investing which has really blown up in a big way in recent years.
Investing is no longer an isolated endeavour. It is one that you can do from the comfort of your home, or anywhere you may be with a mobile device and an internet connection, and be connected to and conversing with like-minded people from around the world sharing and discussing all things investing.
However great this sounds, and it is no doubt a privilege to take full advantage of, it again comes with its challenges that play their part in why so many fail. End up in the wrong forum on Facebook, Whatsapp, Telegram or any other social site and it will spell frustration and disaster for your investing performance.
So to save you a lot of time, hassle and money, let’s go through 10 “Must Haves” any good trading and investing community must have, before you invest into it!
Now before we get into that, let’s lay the foundation of where you are right now, what you want to achieve and how you are looking to achieve this:
Where you are right now:
You are no doubt a busy professional or business owner working the expected long hours, earning a decent wage with decent savings and most likely investments of sorts already in place.
You may be married with kids or in a relationship, you have friends and family to see, you have a social life, you have hobbies and interests that you make time for on a weekly basis.
In other words, you have a lifestyle and time is short and that is not a bad thing if you are enjoying what you are doing. There is also a chance you are tired of the 9 to 5 grind (or 8 to 6 if we are honest) or the self-employed hours which can be longer and are looking for an exit plan.
What you want to achieve:
You want to make smarter investment decisions to get more from your hard-earned money and savings which your current set of investments may not be giving you and you certainly want more than what the banking system is offering you if that is where your savings are currently sat.
You want a side-hustle that you can do from home and that will seamlessly fit around your current busy lifestyle with as little intrusion as possible.
You want this side-hustle to have the very real potential of becoming your main hustle, freeing up a lot more time to enjoy the added money you are making from your smarter investments.
Ultimately, you want to be in a position of choice which the 9 to 5 lifestyle takes away from you. And why not? After years of service to the system, you are entitled to your freedom and investing, if approached correctly, is your way out.
How you are looking to achieve this:
You have done your research, looked at several possible side-hustles and have pinpointed investing as the way forward for you as it seems to tick all the boxes. Well done! It is the correct choice, as investing and specifically trend following, is the perfect side-hustle for everyday individuals like us.
You are now doing your research and looking to avoid the many mistakes that private investors make.
You may already have lost money day trading or trying all the other magic formulas that over-promise and under-deliver but still you persist as you know that there is a way, and my friend, you are very right to persist.
Like any other business, get the foundation correct, be resilient and you can build the empire of your visions that keeps you awake at night.
Key to that foundation is being part of the right investing community, so let’s go through the 10 “Must Haves” you should look out for in a good online trading and investing community.
1. The right knowledge
If this is wrong then it really does not matter what other perks the community may offer. The bottom line is that you are in this to make money consistently and not simply joining a club to have a natter and to spread your ego.
This can often be the case with many of these online communities, particularly day trading communities, where the ethos is often based on quick wins and who has made the most money as quickly as possible.
We know that over 80% blow accounts day trading so this is an unhealthy environment very much based on ego and deceit you want to steer clear of.
The right knowledge for you as a private investor with a busy lifestyle is an investment-focused community based on trend following, not day trading. Trend following is a proven method used by the best investors for decades, going back pre-tech age, that profits from investing in the sustained long-term moves in the market.
It requires far less screen time compared to day trading (which is like having another 9 to 5 alongside your current 9 to 5 and who wants that only to be part of the 80%+ that blow accounts) and so allowing trend following to be easily adapted around your career and private life, and crucially, without compromising on profit by catching the big moves.
If the words “we are a day trading community” are uttered, we strongly recommend walking away.
The best investing techniques are simple to learn and are best shared by starting you on a comprehensive video syllabus which you can go through at your own pace and then propped up with continual support through live training days and live weekly webinars which we will cover in more detail in “Must Haves” 7 and 8.
2. A verified trade log
Next on the list is the community founder(s) being able to back up their claims with solid evidence of the money you could potentially make as a member of their community BEFORE you start subscribing and handing over your own hard-earned money.
Ask for at least a year to 2 years of RECENT, CONTINUOUS and COMPLETE trade history that has been verified by an FCA (or equivalent if outside the UK) regulated platform so you know these results are 100% genuine.
Now, this can be a challenge to get this out of them as there is no requirement for communities to do this because as already mentioned, this is a largely unregulated industry.
What most communities will end up doing is giving you “backtested curve-fitted for best fit” results that paint a pretty picture of what their philosophy would have made. However, remember the disclaimer that comes with that – past results are not a reflection of future performance. Often these strategies that have been back-tested and curve-fitted to produce excellent results are not robust enough to deal with market conditions going forward and so it all falls very flat on its face once you start implementing them in real-time.
Another common approach is to entice you in with screenshots of the few winning days they have from their broker account and hide the majority of losing days. It’s all very crafty and selective but you are aware of that, right?
A good trading and investing community will go above and beyond to show you what is possible if they truly believe in their philosophy and will get their results verified before charging you a subscription fee. Take anything less with a huge sack of salt.
3. Trade all the markets
A good community covers forex, UK stocks, US stocks, commodities and maybe even cryptocurrencies as this shows a solid understanding that money is moved from market to market.
They will help identify which market is in trend through the daily and weekly analysis and support structure they have set up and guide you to build a portfolio around the best looking instruments in that market as we will elaborate on in “Must Have” 6.
Communities that focus on just forex or cryptos or the indices or even a single instrument like Gold or the EURUSD will without a doubt encourage you to day trade with little regard for market conditions and often because they have a different agenda to yours which will be covering in the “Red Herring” section.
What you do not want is to label yourself as a “forex trader” or a “crypto trader” but a “TREND follower” or an investor which shows that you have no unhealthy attachment to any single market or instrument but instead move to where the money is and trade whatever is in trend.
Tip: Your attachment to any investment/market/instrument should only be for as long as it is paying you. Once the trend ends, say thank you, take your profit, let go and move onto the next high-probability setup. A good exercise is to cover all the ticker symbols of charts and just focus solely on price, ignoring the instrument name, to drive your investing decisions.
4. Direct access to mentors in a closed forum
Alongside the right knowledge, you want access to a closed community where all members apply the same trend following philosophy and move and grow as one with all non-trend following influences and distractions kept out.
You want to be part of an environment where the community invests together when trends are in play and markets are looking favourable and stand aside together when markets are moving sideways and not looking favourable.
You want to execute this with confidence through the continual guidance and direct support of the founders, mentors, admins and moderators who must all be experienced and highly competent investors themselves with proven track records.
What you don’t want is to be part of a community where there is no unity and instead, the forum is one big ego-fest.
Instead of calm and logic and a desire to learn, improve and make money, members instead bring their own unproven day trading strategies and philosophy turning the community into complete mayhem.
It’s a sad state of affairs when ego comes before the importance of time but that is what you will have to deal with in a lot of day trading communities.
Admins will often create communities like this as they have a different agenda such as some form of multi-level marketing scheme or they have an IB agreement in place. If you are unaware of what an IB agreement is, don’t worry, we have you covered in the “Red Herring” section.
5. Trading & Investing tools
All industries require specialised tools to complete the job, investing is no different. The community should have a dedicated charting package that they not only recommend to their community members (which should come at an affordable cost) but have developed a bespoke set of investing tools that they give to their members, ideally the same tools the founders have used to get the results they have achieved in their verified trade log.
These tools will bring a number of benefits with them such as:
Removing all subjectivity
Aligning all members with the same analysis process
Speeding up the analysis process
Highlighting the all-important edge the whole community invests on
Highlighting entry points
Highlighting stop-loss levels
Highlighting exit points
Displaying the exact numeric values to insert into your broker account
Overall speed up and simplify the analysis and investing process
What you do not want is to be part of a community that encourages you to use free broker software and charting tools as they are very limited in their capability.
They have no long-term benefit for your investing and it also shows little to no investment into the community by the founders themselves.
6. Live training days
A good community should not limit communication to a video syllabus and an online forum.
These are great starting points for new members of the community to get into the groove of things and start building momentum at your own pace but the knowledge shared should be consolidated on well-structured live days of training.
This is where you get to meet the founders of the community as well as the other members to really bring that tribe feel because ultimately, a good community is a tribe of like-minded individuals who have the same investing goals.
The live days of training are designed to compound and accelerate your learning phase and to consolidate what you have learned on the video syllabus.
It will give you the opportunity to ask those pressing questions that really are best-asked face-to-face as well as picking up nuggets of information from what other members have to say. These days are a great way to start expanding your own network and building bonds with those who are on a similar journey to you.
7. Live training webinars
A well-organised community will recognise the importance of a live weekly point of contact and there is no better way of doing this than through webinars. They are organised at a convenient time and are recorded for those that could not attend.
These weekly webinars should be designed to ensure that all community members are fully prepared for the markets and have all the right instruments on your watchlist. They are also a great opportunity to ask questions to your trading and investing mentors and a place to suggest and analyse instruments you may have found yourself, such as a stock in your own country, and get confirmation on if they are worth investing or not.
Ultimately, a whole community investing in the same way means many eyes viewing the markets in exactly the same way for potential opportunities and, as a reminder, it should be from an investment and trend following point of view. However, a community that is on top of their game will have that covered as I explain in “Must Have” 8 next.
An environment you want to steer clear of is a high-paced live, day trading room where you are seeing and being encouraged to place multiple live “trades” a day. I use the word “trades” here quite loosely, as often what you see is more inline with gambling with a focus on quick wins rather than good risk management.
Tip: Day trading is more akin to a winning v losing mentality which does not fair well at all in the markets. There will only be one winner and that is the markets. Trend following, on the other hand, is more in line with an investor and business approach where we think in terms of profit v loss, where losses are small and managed and profit large and life-changing.
Tip: A good investor focuses on protecting their downside and establish high-probability market environments first and hence letting the investments and the money come to us. A bad investor or a gambler chases money through multiple trades with little regard for market conditions and risk management which is a surefire way to losses and blown accounts.
8. Scanned watchlists and analysis videos
There are over 10,000 stocks in the US stock market alone, throw in UK stocks, forex, commodities and cryptocurrencies and you have a huge list that needs to be sifted through on a daily and weekly basis to find the best looking setups.
This is a near-impossible task to do manually and so this is where scanners come in. Good scanners cost money. However, a good community with a proven system will already have subscribed to scanners, which were used to achieve the results in their verified trade log, and so a good community setup will involve sharing the results of the scans with the community either in the form of watchlists or videos.
As a member of the community, this will save you £1000s in subscription costs which you can add to your trading and investing account. You will also save hours of time daily and weekly looking for the best instruments to invest in, time which you can spend elsewhere.
What you don’t want to happen is to be given a strategy which is unproven or has been curve-fitted as explained in “Must Have” 2 and then for you to be left to your own devices to find instruments to invest.
It’s a combination with a guaranteed unhappy ending for you but most likely not for the community owner(s) whose intentions will most likely fall into the “Red Herring” section coming up shortly.
9. A copy service
The final piece of the puzzle for a good community setup is the ability for you to see and copy the very investments that the senior members or the founders of the community take. As already mentioned, the bottom line is you want guidance on how to build a successful portfolio to make money and that only comes from taking the right investments. The complete process should go something like this:
Learn the trend following philosophy using the video syllabus
Compound the learning with the live training days and live weekly webinars
Given weekly, ideally bi-weekly, video analysis of the very best instruments
Be able to understand why they are good setups using the bespoke trading and investing tools
Copy the investments taken from the shortlist
Be supported in the management of the investments from entry to exit
Many services will offer to train you then leave you to find your own setups while other services will sell you signals but with no explanation of the logic behind the signals. The reason for this, yes you guessed it, they are selling you a day trading system which has a close to zero success rate and so by selling you only part of the story, they avoid taking full responsibility of your results.
A good trading and investing community will give you complete support from the learning to the implementation and with complete transparency.
10. An onboarding process
Now I have put this as “Must Have” 10 as to get to this point, you have done your extensive research and are ready to move forward with a community that is meeting all the needs mentioned above.
A respectable and professional trading and investing community is one that has a thorough onboarding process. It should involve a call with the founder or a key member of the community to determine if you are suitable not just for their community but also if you are in the right place in life to start investing. As keen as you are to get started you may actually be better off applying a little bit of patience and waiting until you are in a stronger place financially which will put you in a much better position long-term. The onboarding process should determine:
Your investing history
Your investing goals
The timeframe you want to achieve your goals in
Your time commitment to the learning phase
Your financial situation
Your starting amount
The onboarding process should work both ways with you being able to ask questions about the community and the founders and you should be able to walk away confident in that they have been answered correctly and not shrouded in mystery.
Questions such as:
How long have you been investing for?
Who did you learn from?
Do you have verified results that I can see?
Do you have successful members?
Can I speak to one or see their testimonial?
The onboarding process must determine if you are not only a good match for each other but for you to get a gut instinct if the community can and will deliver on their promises. A good community will also not be afraid to turn you away and refuse to take your money if they think you are not suitable.
If there is no onboarding process, I would be concerned. Their priority is most likely taking your money through their subscription costs rather than delivering a quality service.
Definition: “A piece of information which is intended to be misleading or distracting.”
A good community is one that has been created by accomplished private investors for aspiring private investors as an environment to efficiently guide you through the investing landscape.
Let’s go through some points that we consider “red herrings” that you should very much be aware of that will put you in a better position to understand if you are dealing with the right people to guide you or not.
1. IB agreements
“IB” stands for Introducing Broker and effectively is an agent that brokers use to recruit people to use their trading platform. An IB will often dress themselves up as a trader or investor, create some kind of community, get people to join their community, train them on some kind of basic strategy and get them to open and fund an account with their preferred broker.
An IB makes their money by splitting spreads and commissions with the broker and this is usually based on every trade that you will take.
And so, yep that’s correct, the more you trade the more the IB and the broker make between them and so what basic strategy would they give you? One based on day trading and what do we know about day trading? That over 80% fail as confirmed by official broker stats. So you, the investor, have very little chance of making money but are likely to keep funding the account with small sums of money each time you blow one. The result is that the IB and the broker are consistently making money whether you win or lose. Slimy, I know!
Luckily, it is not too difficult to spot an IB. Their website will be plastered with banner ads from brokers and if their main focus is on you opening and funding an account as opposed to learning how to invest, then something is fishy (pun intended).
It should be obvious from this that anyone who has an IB agreement in place and more often than not, hiding behind the guise of a trader, will have a very different agenda to you and just to be clear, it is not your investing success. Stay clear.
2. The hidden upsell
The hidden upsell has been part of the forex trading world for as far back as I can remember. I was suckered in by this back in 2007 during my early days when I was totally unaware that these misleading marketing practises existed. I also know that this very same company operates today, just rebranded, given all the negative publicity that builds up on the internet.
And they are not alone, in fact, they have spawned a whole number of “traders and investors dressed as marketers” using the same manipulative hidden upsell business model that can cost you in the 10s of £1000s.
Investing is a business and requires investing but it does not have to be ludicrously expensive to learn. Paying 10s of £1000s for a course that over-promises and that will certainly under-deliver is a disastrous start they many do not recover from – goals, dreams and ambitions all gone up in smoke.
I know people that have taken out loans and credit cards to pay for these courses, encouraged by the boiler room over-the-phone sales techniques, which is absurd. Now taking out loans and cards to invest is not a bad move in itself if you are in the right position to do so, in fact, it is a powerful choice to leverage if done correctly, but not for paying for a hidden upsell that will only let you down and with no funds of significance in your investing account to make that money back.
If you think about it, if the course is that good, there is no need to hide it. A good trading and investing community will have 100% transparency on all aspects of their set up and that includes the investment needed to join. So make sure you ask for full disclosure on ALL the costs involved before joining and get it in writing if needed so there are no nasty surprises further down the road. Everything we have covered in this post should be packaged and available to you at one reasonable price.
3. “Find a strategy that suits your personality!”
This is a very bad piece of advice, finding an investing strategy that suits your personality will almost always be sold by someone who has little to no idea of what good investing is and is pretty much guaranteed to lead you down the route of day trading
Think of driving a supercar around a circuit, to get the most out of it and to push it to its limits you have to learn to appreciate the mechanics of the car and the way it has been designed. You will learn how it handles, how it takes corners, braking distances, the torque it pumps out and more.
With time and experience, the better you become at driving it and pushing it to its maximum potential and that is because YOU are getting better at ADAPTING to the way it drives. The same goes with driving around the road network where you live. There is a way to drive from A to B by adapting to the code of the road, which granted, is certainly more aggressive in some parts of the world compared to others, but YOU still have to ADAPT rather than trying to adapt a whole road network around your personality and way of driving. And if you drive through Europe as I have done on numerous occasions then you have to be quick at adapting when crossing borders.
The point here is shedding your ego and adapting to the environment around you and investing is no different. To be successful, you have to adapt yourself and your personality to the market to be able to get the full potential, in this case, profit, out of the market instead of trying to adapt the market to you. Adapting to the market means aligning yourself with the natural movement and flow of money from market to market which will lead to effortlessly extracting profit. Trying to adapt a trillion-dollar market to your personality will lead to forcing investments which will only lead to losses and disappointment. Don’t fall for this tomfoolery.
4. Institutional techniques
The final red herring to be aware of is those teaching you or claiming to teach you institutional techniques. “Invest like a hedge fund” or “Learn from an ex Goldman Sachs investor” are some of the straplines used to rope people in. These individuals may seem like the right people to learn from but are really not well-positioned to teach you, THE PRIVATE INVESTOR.
Institutions have vast reserves in the billions of your hard-earned money to invest with, have rules and regulations to follow, are privy to getting news early through the terminals they pay £1000s for monthly and are well-positioned to invest both short-term and long-term.
As private investors, we often start off with £1000s, have to make up our own investing rules to follow, focus purely on the charts and ignore the fundamentals and should really only be investing long-term trends for the reasons covered in “Must Have” 2.
As private investors, we need to be aware of certain institutional techniques such as how money is moved from market to market to be able to identify where the money is but the approach to extract profit from the market is very different for the private investor compared to the institutional investor.
To be a profitable private investor, you want to learn from someone that is best-positioned to teach the techniques needed to be a profitable private investor. That can only be from another private investor with a proven trend following strategy backed-up with results in a verified trade log.
In short, treat investing as a business, nothing less. It requires an investor and business mindset and do not let anyone tell you differently.
However, compared to any other business, the starting investment and the annual overheads are low compared to most other businesses, especially compared to the time commitment involved on a daily and weekly basis and the potential profit that can be accumulated. Trend following, in particular, is the perfect side-hustle for everyday individuals like us who want to remove the banking system and have a very viable route out of the 9 to 5.
So here is a summary of what we have covered in this article and what you should be looking for in a good online trading and investing community:
The learning phase:
An investment approach using trend following principles
A concise and succinct video syllabus covering the whole trend following philosophy
A year to 2 years of full verified history to prove that the philosophy works
Bespoke trading and investing tools to speed up the analysis process
A closed community where all abide by the same philosophy and take the same investments
The implementation phase:
Live training days to consolidate what you learn in the video syllabus
Live weekly webinars as a point of contact in the week for investment setups and questions
Watchlists and videos of shortlists of very best investing opportunities
A signal service for you to see, copy and manage investments from entry to exit
I hope that helps you make a more informed decision on what to look for when looking to subscribe to a trading and investing community.
As always, keep it simple, keep it Sublime!