There’s the old saying that ‘a little knowledge is a dangerous thing.’
And that’s why following the advice of people who aren’t qualified or experienced enough to impart their wisdom is particularly risky; significantly so in the world of investing and trading where your money is on the line.
Some newcomers to trading will follow these-called experts religiously, copy trading where they can and trying to glean where the money of these gurus is flowing through the market.
However, there is always the suspicion that some ‘experts’ are also only giving advice that suits them. For example, if they hold a position in a particular stock or currency and they can convince their followers to also buy-in. That will force the value up and ensure they can sell for an advantageous price.
It’s understandable that some forex traders, especially those that are new to the game, would be cynical about the intentions of these industry experts – whether that status is earned or self-proclaimed.
But of course, one thing you should remember is that many of these individuals have already gone through the learning process and have come out the other side. They have learned their lessons the hard way and can help you to avoid the many pitfalls of trading.
So should you be listening to the advice of trading experts? Here’s the case for and against.
The case for listening to trade experts
How do we define an ‘expert’ in a given field?
Typically, it’s because they have provable, long-term success, and thus their pearls of wisdom can be heard with complete peace of mind.
In the trading field, that would be represented as continued profit-making – with some kind of ‘proof’ to show that the individual in question isn’t a snake oil salesman but a trader of genuine skill.
Where an expert can prove their worth, they should be listened to with an open mind.
Of course, there are stacks of resources online about trading: the do’s, the don’ts, and other salient facts to consider. Much of this information is free, so you have no reason not to at least give it the time of day.
Any forex trading 101 articles you read will offer you some guidance about trading forex markets, the pitfalls, and other interesting pointers. Use this information as a foundation for your learning, and your trading should improve as a result.
The case for not listening to trade experts
Here’s an interesting question to ask yourself when listening to the advice of trading experts: what’s in it for them?
Some people genuinely get a kick out of helping others, knowing that when they started on their trading journey, they also benefited from advice and assistance.
And yet, for others, there is a tangible reward for giving people the benefit of their wisdom. Often, this will be to encourage new traders to take up positions that are profitable for the expert – it happens surprisingly often, and the realm of cryptocurrency was rife with these ‘overnight experts’ during its boom period.
The truth is that every trade comes with risk – there is no ‘sure thing’ or money tree in trading forex. When somebody offers you a ‘guaranteed’ strategy for trading success, they are more often than not merely trying to profit from you.
Remember, this is your money, not theirs. Any investment you make should be based on plenty of your own research and diligence – not just taking the word of an expert who may have their own reasons for talking up a position.
The case for listening to trade experts to help form your knowledge
Our best piece of advice on the subject is this: take the advice of an expert with a pinch of salt.
You will normally be able to smell a rat quite quickly if an expert is simply out to make a fast buck, and those characters can be ignored at will.
But there are experts whose primary aim is to help you, and if those individuals can prove their success with tracked trades, then all the better.
So use them by listening to their advice and thinking about how it could help to inform your trades, but never just follow blindly by copying their every move. That could be a quick route to an empty bankroll after a series of losing trades.
There is plenty of expert information online with articles about trading psychology, strategies, broker review, glossaries of key terms, and much more besides, so do take your time to work through these to enhance your understanding.
And do feel free to follow experts online and on social media too: just remember to do your research before executing any trade.