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It’s brought down the overall costs and commissions of trading, it improves access to information and it levels the playing field for all who trade on a regular basis.

The flipside is that the internet is also flooded with fraudsters and scammers. People who don’t know how to trade and instead make their money by peddling over inflated trading systems or products.

Social media is a great place for these scammers to hang out as they can get access to thousands of people, even more if their products are shared and liked by others.

Update: Part 2 of how to avoid the scammers on social media

It’s important therefore, particularly if you are new to trading, to keep an eye out and educate yourself about the good and bad.

A Guest Post by FXTM

In general, it’s better not to follow tips at all. It’s better to educate yourself and become your own trading master. When you are online, avoid the shysters by only following certain types of traders:

Traders who trade their own money

Professional traders should be given the utmost respect and traders who trade their own money are the real deal. They have the courage to put their trading picks and results up for the world to see so they should be listened to and respected.

A live trader has nothing to gain by putting up his own results but he does have a lot to lose. He does it to educate and enrich the trading community and even if a trader does lose, you can always learn something from the experience.

Market teachers not gurus

Following on from point one, there is nothing wrong with market teachers who do not trade the markets but there is if they claim to be something they are not.

Individuals have different strengths, so a successful trader does not necessarily make a very good teacher. In the same way, someone might be a terrible trader but a great teacher. It takes many qualities to be a good trader and a good teacher may just be lacking in one or two areas.

Market gurus, however, claim to make consistent profits without ever losing a dime. They quote inflated trading results that are often just paper profits. Often, they may even be photoshopped. Whenever a guru boasts about how many thousands of dollars he’s made on a particular trade it’s usually time to become just a little bit sceptical.

If he was telling the truth he’d be able to back it up with unadulterated, verified trading statements. More often than not, of course, they can’t be backed up because they’re not real, and some individuals fall for it every time.

Further reading:  5 Most Predictable Currency Pairs