The truth about online investing

Online investing was never as easy as it is today, unless you live in North Korea or Cuba.

The variety and facility of investing is so big that it may drive us crazy.

The truth is that we are novice traders it is not difficult to fall prey of one of the uncountable scams that are on the net. The fact is that it is not easy to get rich investing.

Online investing trading

Normally, you have to be rich “already” to success in investing you own money.

The use of internet is widespread for online trading. There are not many people who still call their broker by phone.

The great majority of young and middle aged people do their trading online.

The truth is that it is much comfortable, easy and secure.

Scams are more related to the dubious investment products than to internet security issues. Online theft is not as common as it may seem. You are more likely to be robbed in the street actually.

Online investing scam

The real danger comes because of the thousands of swindlers that are on the net.

Internet has brought better competition and trading conditions, but it has also brought a big cost. A lot of online investments are pure swindles.

Most small investors want to join the get-rich quick crowd and believe all the aggressive marketing campaigns of the swindlers.

There were never so many short-term trading vehicles as today:

  • HYIPs
  • Stocks, options, binary, futures and forex signals.
  • Expert Advisors and trading robots.
  • Courses to make you a “professional day trader”.
  • Day trading in general.
  • “Prop” firms.

If we think for a minute we will realize that most of those “investments” are related to short-term or day trading. That term seems to be surrounded by some mysticism.

Countless people fall prey to the false believe, promoted by the multimillionaire industry, that day trading is the best trading approach.

They all go straight to the slaughterhouse.

Online investing for beginners

The great majority of those courses, signals, robots, experts, et cetera, intend to offer day trading products.

There are not many medium or long-term trading being promoted out there. Most of the offers are of the type of “cut your profits” (and let your losses run). Doing that, they get impressive short-term gains. With those gains they get a fantastic promotion of their products, which they take advantage of.

Beware that there are also swindlers that promote long-term investing, but you will find more serious people there.

get rich investing online?

Consequently, the first thing that someone who starts online trading should consider is to run away from get rich quick schemes and things like: “make one per cent per day without risk” and farces like it.

The next step should be to inform you as much as possible.

The best is to read some of the best trading books. The classics are probably the bests.

Then, if someone has plenty of money, making a course or going to a seminar will not harm. But, do not believe in those “experts” that label themselves as “professional day traders”. Those ones are in 99% of cases a lie.

Courses about basic swing trading notions, long-term investing, options selling (no binaries!), futures spreads, and things like that may be fine as long as we remember that we are not going to get rich with any of these soon.

Later on, when we have some notions about trading and with our bank account intact, then we could try to find the best way of online investment.

Online investing stocks, futures, binary options, forex..

Some people prefer trading stocks, some forex, some futures, some ETFs, long-term investing, short-term, and an increasing number of people are trading 60 second bets in binary options. Bets, in which they are wiped out mercilessly.

If we want to lose money in the long-term we should do day trading. The more, the “better”, so we may lose all our money and have a season to think calmly about what happened. Some will conclude that day trading is not the correct approach.

If we decide to invest for the long-term, the best and “safest” is to invest in stocks, ETFs or index funds.

It is difficult that we lose in the long-term if we invest like that, unless the civilization ends. And, even so, investing for the long-term, there will be periods of great loses when bear there is a big bear market. A lot of people cannot bear a 50% fall in their assets, but in the last two hundred years of capitalism stocks have always traded higher. Well, except in some cases like Russia and China in 1917 or 1949.

online investing broker

For long-term investing there are good traditional stock brokers. They are not the cheapest, but they are fine and quite “safe”.

If we want to invest in the medium term, aka trading, we have a very big amount of brokers around us (1).

There is no impediment if we want to open an account from Spain with an Australian broker, which are some of the best in the forex arena. We may even find brokers from Singapur or countries like that.

The best thing we can do when we invest online is to choose a well-regulated broker.

A broker should preferably be located in some of the developed world countries like the United States, United Kingdom, Australia or Europe.

It is not very recommendable to open accounts in shady regulations, although there might be some good broker there.

We should look for good regulation, reputation and trading conditions. And, as usual, we should forget about “offers” of easy money.

We should become aware that if we can make a 20% annual profit for the next ten years we should be very happy. Everything else is mostly half-baked stories, whether they are online trading or offline.

Good trading and good luck

  1. Not for the American market, which is quite restricted by their regulators.

 

Thanks for reading and sharing.