# Online trading is like swimming – don’t jump in the deep end without having lessons
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-22
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: Beware of Instagram Money Gurus
Meta Description: Beware of false promises of easy trading success on Instagram. Discover the truth behind the glitz and glamour of online trading.
URL: https://financedigest.com/online-trading-is-like-swimming-dont-jump-in-the-deep-end-without-having-lessonshtml

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_By **Sam Fuller,**_ _Director of_ [_Financial Markets Online_](https://financialmarketsonline.com/)

With their flash cars and Rolex watches, Instagram’s self-appointed money gurus make online trading look easy.

Their pitch is beguiling. Just follow their ‘foolproof’ trading signals and you too could soon be living the millionaire lifestyle, drinking chilled fizz, reclining on a bed of money or roaring around the Med on your speedboat.

Sadly, many of those who have fallen for this _contrepreneur’s_ pitch are now discovering to their cost that all that glisters is not gold.

The rise of the Instagram ‘get rich quick’ merchants comes against the backdrop of one of the pandemic’s more surprising legacies – a [surge in the popularity](https://www.financedigest.com/us-senate-leader-schumer-calls-for-ai-rules-as-chatgpt-surges-in-popularity.html "US Senate leader Schumer calls for AI rules as ChatGPT surges in popularity") of online trading and the emergence of a new generation of armchair investors. One [trading platform](https://www.financedigest.com/stock-trading-platforms-for-beginners.html "Stock Trading Platforms for Beginners") saw its customer base grow from 50,000 to 500,000 in barely a year.

More [interesting still was the profile of those first-time investors](https://www.financedigest.com/a-tale-of-two-central-banks-what-the-latest-interest-rate-decisions-mean-for-investors.html "A tale of two central banks – what the latest interest rate decisions mean for investors"). Two thirds were under 35, while a fifth were 18-25. For decades, investing in [individual stocks or trading forex](https://www.financedigest.com/how-to-trade-forex-and-succeed-as-an-individual.html "How to Trade Forex and Succeed as an Individual") was all too often the preserve of a wealthy elite.

But [online trading has put the world’s financial](https://www.financedigest.com/5-steps-to-strengthening-your-online-financial-security.html "5 Steps to Strengthening Your Online Financial Security") markets within everyone’s reach. Meanwhile the evolution of Contracts for Difference (CFDs) – a cost-effective financial instrument based on the price movements of an asset – now allows would-be [investors to gain market](https://www.financedigest.com/thoracic-drainage-devices-market-rising-new-business-opportunities-for-investors.html "Thoracic Drainage Devices Market Rising New Business Opportunities for Investors") exposure for a more modest initial outlay.

Rapidly falling trading costs, coupled with improvements in both technology and trading infrastructure, have encouraged a far wider demographic, including women, to embrace [online trading over the past few years](https://www.financedigest.com/whats-in-store-for-2016-leading-online-trading-services-provider-easy-forex-reveals-predictions-for-the-new-year.html "WHAT’S IN STORE FOR 2016? LEADING ONLINE TRADING SERVICES PROVIDER EASY-FOREX REVEALS PREDICTIONS FOR THE NEW YEAR").

The boom has been accompanied by an explosion in free [online guides](https://www.financedigest.com/setsquared-guide-to-pitching-online.html "SETsquared guide to pitching online") and not so free trader gurus peddling the promise of instant, easy riches.

Many of those who fell under their spell have since given up on investing feeling disillusioned, or even ripped off.

News that there are charlatans lurking on [social media](https://www.financedigest.com/why-social-media-should-be-your-business-top-priority-in-2018.html "Why Social Media Should be Your Business’ Top Priority in 2018.") won’t come as a complete surprise to everyone. Show me the Instagram whizz kid with a Lamborghini parked outside his mansion, and I’ll show you someone with a [hire car](https://www.financedigest.com/car-hire-for-smes-things-to-consider.html "Car hire for SMEs: Things to consider") who has rented an Airbnb for a photoshoot.

In this era of Bitcoin, however, the promise of a quick buck has never burned more brightly and ‘get rich slowly and steadily’ never seemed so quaint.

Social media has given the oxygen of [publicity to those trying to sell the dream of instant financial freedom to a growing swathe of society desperate to escape the humdrum of 9-5 work](https://www.financedigest.com/the-new-fangled-normal-of-working-from-home-to-push-the-public-cloud-service-market.html "The “New-Fangled” Normal of “Working from Home” to Push the Public Cloud Service Market"). Not everyone sees beyond the props, and too many have been blinded by the bling.

Exciting as their sales pitches are, you seldom hear these whizz kids refer to any of the tried and trusted [financial metrics](https://www.financedigest.com/how-financial-metrics-can-drive-the-subscriber-experience.html "How Financial Metrics can Drive the Subscriber Experience "). Notions of ‘lasting value’, ‘managing risk’ and old-fashioned patience are usually absent from their lexicon.

Something else they usually neglect to mention is how little skin they have in the game themselves.

And therein lies the deceit, for many of these self-proclaimed experts will have little or no experience [trading the markets](https://www.financedigest.com/the-benefits-of-social-trading-in-a-volatile-market.html "The benefits of social trading in a volatile market") themselves, and their wealth (assuming it exists all) will have come in large part from commissions paid by brokerages for each new punter they can serve up. As long as they [keep churning through new sign](https://www.financedigest.com/keeping-business-safe.html "Keeping your business safe : How to spot the signs and avoid the latest scams") ups, what does it matter if no one makes any money?

And yet, in a strange way, this [Wild West](https://www.financedigest.com/taming-the-new-wild-west-how-biometrics-can-help-the-ecb-deliver-a-secure-digital-euro.html "Taming the ‘new wild west’: how biometrics can help the ECB deliver a secure digital euro") behaviour is proving a boon to the trading sector’s genuine educators and trainers.

By highlighting just how easy it is for the uninitiated to accrue losses very quickly, the sharks’ cavalier approach unwittingly proves the [value to beginners of getting some truly impartial training](https://www.financedigest.com/how-much-council-tax-train-tickets-and-rent-voted-worst-value-for-money-things-in-the-uk.html "How much!? Council tax, train tickets and rent voted worst value for money things in the UK") from experienced traders.

While today’s [online trading platforms](https://www.financedigest.com/jetlearn-the-worlds-first-web-3-0-online-academy-for-k-12-raises-e1-2m-in-seed-round-to-launch-its-platform-in-the-uk.html "JetLearn, the world’s first Web 3.0 online academy for K-12, raises €1.2m in seed round to launch its platform in the UK") make the execution of trades effortless, they don’t make success easy.

Anyone who’s serious about trading [forex](https://www.financedigest.com/10-fundamental-forex-trading-tips-for-beginners.html "10 Fundamental Forex Trading Tips for Beginners") – or the markets in general – will need a trading education if they are ever to be successful.

If you don’t learn [early on how to manage risk](https://www.financedigest.com/early-detection-of-mismatched-trades-is-key-to-managing-risk-and-maximizing-profits-on-the-pl-desk.html "EARLY DETECTION OF MISMATCHED TRADES IS KEY TO MANAGING RISK AND MAXIMIZING PROFITS ON THE P&L DESK"), then you’re all but certain to learn, the hard way, a much tougher lesson; how quickly things can go wrong.

While technologies may change, the best strategies often remain the same, and those who trade with [short-term horizons can expect to go on losing](https://www.financedigest.com/in-planning-for-today-dont-lose-sight-of-tomorrow-avoiding-short-termism.html "In planning for today, don’t lose sight of tomorrow – avoiding short-termism") money.

More often than not, I find the [successful trader will be the one who recognises the need to build](https://www.financedigest.com/building-or-maintaining-a-successful-business-with-recession-on-the-horizon.html "Building or maintaining a successful business with recession on the horizon") from the ground up, and believes in the value of hard work.

Of course, [trading is inherently exciting and the potential for big financial rewards can tempt inexperienced traders to take unnecessarily big risks](https://www.financedigest.com/wto-sees-subpar-2023-trade-growth-with-multiple-risks.html "WTO sees “subpar” 2023 trade growth with multiple risks"). But losing discipline in pursuit of the [big score](https://www.financedigest.com/how-barclaycard-scored-big-by-setting-customers-a-challenge.html "How Barclaycard scored big by setting customers a challenge") is all too often the undoing of those who are starting out.

As Jack Bogle, founder of Vanguard liked to remind people, “Time is your friend, impulse is your enemy.” Or in other words, don’t get too greedy.

Sooner or later, those who get burned will either turn their back on investing or [seek the advice](https://www.financedigest.com/some-credit-suisse-at1-bondholders-seek-legal-advice-law-firms.html "Some Credit Suisse AT1 bondholders seek legal advice -law firms") of a reputable, expert trainer who has been there and done it themselves.

It’s hard to overstate the value of an experienced mentor. Who better to teach not just the theory, but also the practice, of [investing than someone who has worked in the industry for years](https://www.financedigest.com/liverpools-new-chinatown-perfectly-positioned-for-property-investment-this-chinese-new-year.html "Liverpool’s New Chinatown perfectly positioned for property investment this Chinese New Year") and knows it inside out?

Good trainers will show new [traders how to spot not just the trading](https://www.financedigest.com/bitcoin-traders-can-now-trade-on-lows-and-highs.html "Bitcoin Traders Can Now Trade on Lows AND Highs!") opportunities, but also the red flags to watch out for. And great trainers will be willing to share their knowledge, giving one-to-one encouragement and [support as the newcomer starts their trading](https://www.financedigest.com/belgium-supports-energy-price-caps-suspending-trading-in-eu-power-crunch.html "Belgium supports energy price caps, suspending trading in EU power crunch") journey.

That’s why our training team has more than 50 years of trading experience between them, and we offer students a range of both [online and in person courses](https://www.financedigest.com/prince2-and-msp-training-the-rise-of-online-project-management-courses.html "Prince2 and MSP Training: The Rise of Online Project Management Courses") on our London trading floor.

Like I always tell my students, you wouldn’t jump in the deep end of a swimming pool if you hadn’t taken swimming lessons.

So why would you behave any differently with your money?


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