Kreil provides a whole host of insights, explains the workings of the retail trader’s universe and confirms my own doubts about gurus and social media. Even though I don’t want to give away too much of the content, I have extracted his advice on vetting educators because it’s probably one of the first pitfalls newbies can get sucked in. Find it at the end of this post.
Otherwise, I won’t go into much detail here. The video is well worth watching. He does advertise his own company, ITPM, along the way. So, take it with a pinch of salt and, as always, do some more research before rushing to sign up.
Here is an outline of some of Kreil’s points
- Day trading is dead.
- He compares key aspects of pros and typical uninformed retail traders.
- Reactive regulators won’t protect retail traders. They wait for the damage to happen.
- He goes into the 90/90/90 phenomenon in CFD trading.
- He elaborates on major conflicts of interest at brokerages that milk small retail traders.
- The ‘inversion’ narrative of false trading education creates dumb traders who fill other people’s pockets. Hence we have smart money vs. dumb money.
- He explains the fallacy of Introducing Broker (IB) Agreements for both sides of the deal and how ITPM has tackled this.
- He touches on the difference between hedge funds and managed programmes.
- He debunks often-heard educator messages and highlights that teaching should be about becoming independent instead of making you dependent on stock tips etc. He also warns about the misuse of social trading platforms and online forums.
Vetting educators – What is a professional trader?
Most educators are just retail traders, not professional traders. Beware of “Wunderkinder”, the miracle traders who have made a fortune.
Here are two things you need to check to find a reputable educator:
- Ask the educator for their IB Agreement to find out if they are incentivised by their broker. They must have one in place; it’s a legal requirement – even if the broker pays $0 for the referral. If the educator won’t provide you with the doc, contact the broker’s compliance dept. and best stay away from the educator.
- Does the educator have a regulatory status or history? That would prove that they’ve actually managed money professionally and are likely to know pro trading approaches.
In addition beware of:
- manufactured backstories
- traders posting charts of hindsight trading
- traders posting charts of predicted trading
- fake social media accounts, online reviews, websites
- traders pushing the lifestyle message
- people parading physical cash in photos claiming it was gained trading
Kreil starts talking about all this at ca. 1 h 20 min. If you don’t watch anything else of this 2 h long video, at least check out those ca. 20 min; especially if you consider signing up with a teacher/mentor and if you follow traders on social media.
From the things I’ve seen online, gurus are aware of such criticisms and adapt their messages. It’s not always quite as black and white as Kreil portrays in his talk. That makes it even more difficult for us newbies to discern who is genuine and who is fake.
I try really hard to never lose my critical thinking even when something sounds tremendously exciting or genuine. I am making enough trading mistakes as it is. I really don’t need anyone else to add any more complication.