I’ve had the opportunity to meet a lot of different stock trading experts during my fifteen year career as a stock trader. Most are top notch, but there are others that give our profession a really bad reputation. Sadly, they are the ones that can greatly disappoint a new stock trader and turn them off from the profession forever. In the hopes of warning you away for some of the slime before you go through what I did, here are a few of my experiences, and a couple suggestions for avoiding the encounters yourself.
I’ll never forget my worst experience with a stock trading service, the ultimate in “slime” and an incident that changed my life. It, finally, taught me the important lesson that some people are just in it for themselves, regardless of who they hurt along the way. It also made clear to me that I would have to be different than that, and cemented my personal creed that if a business opportunity requires me to hurt someone else, I just pass it up.
This service, like many others, provided a daily listing of recommended stocks to buy or sell short each day. And, like many others, they had impressive statistics to prove that, in most cases, the stocks they chose would do what they said they would. I was impressed, and said “sign me up!”
But, unlike many others, this particular service had an ulterior motive I was not aware of at the start. Turns out, the folks running the service were making recommendations to their subscriber group for the sole purpose of manipulating the prices for their own profits.
Let me give you an example. First, the owners of this service would buy IBM stock through their account. Then, they would send out a recommendation to the subscriber group, telling us to buy IBM. Once the 3000 + members started buying the stock, the stock price would rise as a result of the activity. When the price per share increased to a point that these slime were satisfied, they would cash in for a profit.
I couldn’t believe that this service was using its subscribers to front run their own orders. Their purpose wasn’t to help the subscribers as promised, but rather to make their money and exit. This was not only immoral, but they were collecting monthly fees from the subscribers to make it happen!
I must admit, most stock services do not subscribe to that slimy form of business. However, less offensive, but more prevalent are those services that convince the new trader that stock trading is way to risky to go it alone. But if you sign on for their monthly program (at a hefty fee, I might add), they will do all the work for you.
True, stock trading is complicated at first, until you have found a system that is right for you. However, if anyone tries to convince you that you can never gain enough knowledge to eventually go it alone, they are probably just in it for your monthly subscription fees. These systems are typically pretty generic and don’t take into consideration your personal risk tolerance or trading preferences.
Now granted, some people don’t want to bother with stock trading on their own, and are content to pay the monthly fee, be told what to trade, and be right some of the time. While the return is usually okay, I have found that finding a system that works and structuring it around your risk tolerance level will always result in higher returns and a more satisfactory trading experience.
It does take some upfront legwork to find someone to help you learn the ropes without taking control over from you. But there are plenty out there and you will be pleased with the result as they will take the slime out of the profession and help you help yourself become proficient at stock trading. I guarantee, you will enjoy the results for many years to come.
To read about other lessons I learned in my fifteen years as a day trader and coach, as well as tips and techniques for becoming successful at stock trading, read my free report “From Video Junkie to Day Trader,” and learn more about how you could be trading stocks profitably in as little as two weeks.