By Sam Evans, Co-Founder & CEO
In this article, I am going to touch on the darker side of online trading communities. First, let’s look at the pros of communities and learning from others.
One of the very first things I was taught as a young adult, was that there is power in learning from others and being part of a community. Talking with others who are working towards similar goals. The concept of surrounding myself with the “right people”, was drilled into me time and time again. For instance: Find a mentor, join a mastermind community, and learn from those who are doing what you want to do. Being eager to learn and grow, I decided to take this advice seriously.
When I closed my first property deal, I listened to a close family friend who had built a portfolio of rental properties and was living off the income from it. When I decided to get serious with my physical exercise and weight training, I took it upon myself to work with a former professional bodybuilder. I also joined Beachbody because I like the community aspect of it, cheering each other on and keeping each other motivated.
I’ve always been a firm believer that if you want to be successful at something, then you should model the habits of someone who is already successful. After all, isn’t this the way we learn in every other aspect of our lives?
Learning to trade and invest
I was nervous when I decided to tip my toes in the water and start trading and investing. The thought of not controlling my losses and losing the money I had, racked me with fear. Learning from those that knew what they were doing and my fear of losing were the two deciding factors in seeking out and getting a professional education from the get-go.
I understand that not everybody shares the same fears as I did. Some people are hungry for opportunity and jump into the market with gusto and enthusiasm, looking to make their fortune in the blink of an eye. I was always more concerned about what I could lose, rather than what I could make.
The market is seductive. The Internet is full of experts and gurus who promise you riches with very little work or experience. There are more market experts on TV and online trading communities nowadays than I’ve ever seen before. My warning to you is simple: do not confuse information and opinion with knowledge.
Even after taking numerous trading classes and mentorships, I still made the mistake of looking for quick fixes in the wrong places. Sometimes when you’re confused and don’t know what to do, it’s easy to seek the opinions of others. Sometimes those opinions can prove valuable. Yet sometimes they can also cost you everything. As well as listening to people who knew better about how the market worked, I also joined a number of online trading and investing communities early in my career. And there was where the problems began.
Everyone has an opinion in trading communities
Opinions are common. Let’s face it, everyone has one! However, that doesn’t mean those opinions are the right ones. After reading this article, you could go online and join one of the free online trading communities. Maybe you are already a member of one of them?
In these communities, you will find many different opinions on what is a good investment and what is a bad one. There will be people telling you what to buy and how to manage your positions. Welcome to the dark side as I call it.
There will be more than enough people willing to share their winning secret strategy with you. As exciting as it seems when you have this much information in front of you, it can also prove overwhelming and more importantly distracting, or in some instances, downright dangerous. I’m always horrified when I see others telling someone to not have a stop loss.
After spending a few weeks in a number of online trading communities, I soon realized that nobody had the perfect strategy. After all, they were all just people like me, or worse, people with no education at all.
Sometimes they were right sometimes they were wrong. Stepping back and looking at it objectively I realized that what really mattered in the long run, was the results I was getting. I found that too many opinions detracted me away from what I had paid to learn and the one opinion that mattered the most: the market itself. As I became more frustrated with my own results, I decided to take a step back and assess the situation.
Who was I listening to? I didn’t know any of these people in this forum. I already had a decent system, but I wasn’t following it because I was listening to everybody else. It was then that I decided enough was enough, and immediately disconnected.
There is no shortcut to success and the sooner people realize that the easier the journey becomes. After being taught the right way to approach the financial markets, it became my responsibility to stay the course and put into practice what I learned. Listening to others simply deviated me from my plan. As harsh as it may sound, there really is a fine line between a community and a herd. Communities can be a wonderful thing to be a part of. As long as the people in the community know their stuff!
Finding the right community
Now please don’t take this the wrong way. As I said at the start of this article, I am a big believer in communities and people supporting one another. It just needs to be done in the right way and in the right context. That’s why we have our Live Coaching Community here at StockAbility™.
Trading and investing as an activity can be a lonely business. The more you can surround yourself with others who share a passion for something like you do, the more likely you are to succeed at doing it. Just be sure that the company you keep, is in line with your own goals. That they are following the same strategy and aren’t distracting you from what you are trying to achieve and implement.
Seek a good education and then embrace a community that will encourage you to use that education. The last thing you need is to be surrounded by people who have no education. People giving you advice like they are experts. A valuable community will support you in making your own decisions. They will share ideas with you on how to be the best version of yourself.
Feedback will always be more valuable than opinion when it comes to the financial markets. In my experience, any opinion is a dangerous thing if you’re on the wrong side of the market. I hope you found this helpful.
Until next time,