Should you enrol on a trading course to learn trade forex, spread betting or CFDs?

No is the short answer. You should not trust a forex trading educational course as far as you can throw it.

Chances are it will be a scam.

Forex trading educational courses make money by either charging you for some hopeless basic training on technical analysis. Which is incredibly difficult if done right. They will probably try and scam you into paying a fee so you can trade from home and for some sort of flashy lifestyle. Or they will refer you to a broker and get a payment when you fund your account.

We’ve covered the instagram forex scams, five key lessons and where exactly you can learn to trade in previous articles.

Most spread betting customers lose money because they run before they can walk.  If you are considering enrolling on an educational spread betting course it is a clear sign that you are not experienced enough to be trading on margin.

If you want to learn how to spread bet read our ultimate guide to spread betting or our guides to Forex trading or CFD trading.

Scam forex courses are usually free to attend and do cover the basics of technical and fundamental analysis. However, the main purpose of the free courses is to try and sell you access to a private trading tutor or another investing course that could cost thousands of pounds. Or they will refer you to an unscrupulous broker and then split the proceeds when you lose all your money be being B-booked.

Even though forex trading and spread betting makes the market accessible to everyone, it doesn’t mean that it is appropriate for everyone.

To learn about investing and trading the financial markets it is important that clients get the fundamentals right first.  If you feel you need help with your trading you will lose money.

If you want to learn about the financial markets with the intention of becoming a professional trader get a job in the city.  Entry-level jobs at spread betting firms and stockbrokers are easier to get than you think.

Or if you are not quite ready for a career change yet read these books on spread betting as a starting point.

Better still read our guides on ten things to understand before you start trading…

1.    How to use support and resistance levels in trading
2.   Using Moving Averages Effectively – Part 1
2.5 Using Moving Averages Effectively – Part 2
3.   Momentum indicators and trends change
4.   Understanding Price Breakouts and its Significance
5.   Q&A On Price Patterns With Jackson Wong PhD
6.   The Importance of Group Analysis
7.   Three Chart Characteristics That Precede A Trend Change
8.   Thoughts on trading the market via Breadth
9.   Six Market Trends To Look For Outside Individual Price Action
10. The Key To Long-Term Investment Success – Know Yourself…

Forex, CFD & Spread betting courses – the best and worst!

Spread betting educational and courses are big business but are they actually any good?

There is a plethora of companies out there who claim the “streets of London are still paved with gold”.  They also suggest that trading the financial markets is a sure-fire way for generating quick profits and earn an income from home. These companies claim to have secret formulas that can predict trends in the financial markets and turn even a novice trader into a hedge fund superstar.

The trust of the matter is this.  Speculating on the financial markets is extremely difficult.  There are very few people that actually make money from spread betting and CFD trading.

Making money on the stock market is possible. In fact, it is pretty simple.  You have to invest in value companies in the long term, through a professional fund manager.  There has in fact never been a period of more that twelve years when an index tracker fund would fail to make money.  So if you want a guaranteed way of making money in the stock market that is probably it.  Buy into a historically risk-averse index-tracking funds and wait fifteen years.

However, derivatives, leveraged spread betting and CFD trading are types of investment that are not actually investing.  They are market speculation in the short term.  The rewards can be high, but of course so are the risks.

About 20% of spread betting customers make money and they do it by being good at it.  Being good at trading is part luck, part natural talent and part discipline.  The best traders in the world only make about 20% gross a year.  These are hedge fund managers trading with billions of pounds and earning millions a year because they are the best in the business.

If any Forex, CFD and spread betting education course says they can turn your £500 in to £10,000 they are talking rubbish.

Spread betting is a very high-risk form of speculating (or gambling on the financial markets) and should be reserved for sophisticated investors who are allocating a small percentage of their net worth to high risk investment strategies or hedging a portfolio.

Just because spread betting exists to open up the financial markets to everyone, it does not mean that it is appropriate for everyone.

The spread betting brokers will provide some limited educational tools about the mechanics of how the markets work.  But the best possible spread betting education can come from experience.  If you are new to spread betting start small, only trade with money you can afford to lose (as when you are starting out you will lose) and never borrow money to trade and be away that you can lose more than your initial deposit.

You can, of course, follow the golden rules to profitable spread betting, but that is only a starting point.

If you have been on an education course let other’s know in the comment section below if has been helpful or a waste of time!

If you still want to learn how to trade forex you can read our guide: Where exactly can you learn to trade forex.

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Trading Risk Warning

ALL INVESTING INVOLVES RISK. Investing, Derivatives, Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.
ESMA & FCA Risk Warning – “CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 68-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Capital at risk”