If you want to start trading should you sign up for a forex trading course?
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.
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.
Getting started in CFD, Spread betting and Forex online guides
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.
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 still want to learn how to trade forex you can read our guide: Where exactly can you learn to trade forex.
Where exactly can you learn to trade?
What if you actually want to learn how to trade CFDs or get started in spread betting?
- First, things first. Don’t get taken in by glamour lifestyles on social media
- Secondly, be very careful about what sort of trading course you attend.
Free seminars run by independent trading education companies are very rarely free. Normally, the free seminar gets you into a room where you’ll spend an hour being upsold a premium trading course. We’re not in the habit of criticising individual companies but if you google “trading courses” for example then look at the TrustPilot reviews… Well, you’ll get the idea…
If you want to learn to trade you can, of course, read our ultimate guide to spread betting – it’s a little long, but covers most things to help you get started. Or you can read the excellent free technical analysis education material on Investors Intelligence.
But what about decent trading seminars?
Here’s three decent options:
Hosted by Eoin Treacy from Fuller Treacy Money. This two day seminar, usually hosted in London has been running for decades. It’s around £1,500 for private clients, but most delegates are hedge fund managers, tier 1 institutional traders and sophisticated investors.
Go to a seminar held by your broker
Obviously the point of these seminars is to get you trading. But since there is so much consolidation and competition in the brokerage industry, brokers want to form long term relationships with their clients. And an obvious way to do this is to help their clients be better traders. IG (read IG reviews) for example, have quite a lot of education material on their website, but also run free seminars for clients depositing over £1,000. The seminars are held in their offices and run by industry experts like John Sheridan and Simon Clarke. Interactive Brokers has also launched the TradersAcademy which is full of guides and videos for beginners, intermediate and advanced traders.
STA Official Qualifications
Get a qualification from the Society of Technical Analysts (STA). They focus on adding a human element to charting.
Trading Signals & Strategies provided by online trading platforms
Are there any decent alternatives to Autochartist and Trading Central?
If you’ve had a spread betting account or done any CFD trading over the last few years you will no doubt have had access at some point to either Autochartist or Trading Central.
Both technical analysis platforms look at the market and atomically produce trading signals from their algorithms. These trading signals are then displayed and in some cases and analyst will expand on the opportunity.
But, as brokers move away from providing advice or even anything that can be construed and implied advice it’s independent third-party research providers that could provide an alternative.
So, if you find it impossible to keep up with the thousands of signals generated each day and need some professionals to sift through the mist for you. Here are three potential alternatives to Autochartist and Trading Central.
Three potential Autochartists and Trading Central alternatives…
Futurestechs is a technical analysis research provider headed up by Clive Lambert. Clive is on the board of the Society of Technical analysts and been running Futurestechs which has provided research and analysis to banks and brokers for the last 18 years.
2. Acuity Trading
Acuity Trading, headed up by Andrew Lane, provides sentiment based analysis direct and through brokers to traders. Acuity trading has been trading since 2013 and uses a combination of machine learning and natural language processing technology to automate the process.
3. Investors Intelligence
Investors Intelligence corporate solutions, has provided data, signals and analysis to some of the largest brokers in the past including, IG, London Capital Group, Selftrade (now Equiniti), Barclays, TD Waterhouse and ADM to name a few.
The technical analysis is based on end of day pricing and looks for short to medium term trends in the market. Their longest indicator has been running since 1963 and measures professional sentiment (not social media) to show when the market is over bought or oversold, allowing clients to trade or hedge appropriately.
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.