What is a Trading Guru, Expert, Master, Mentor, Teacher, or Authority?
A real trading guru is someone with at least five to ten years of trading experience and an undistorted track record of consistent profitability. In my opinion, these are the two main requirements to be considered an authority within the trading space.
When people hear the term “trading guru”, they typically assume teacher or educator. But I would argue that the vast majority of real trading gurus (experts, masters, etc.) don’t necessarily teach or mentor anyone at all. Since they already have a proven process of making lots of money, they don’t feel the need to teach. They just keep improving upon their own skills and honing their craft.
This is why you should be immediately skeptical of anyone trying to sell trading education. Most real, legitimate traders simply aren’t spending their time creating courses – they’re focused solely on trading. So it ends up being marketers – the individuals that masquerade as successful traders with advertisements featuring fancy cars and mansions – that tend to sell trading education.
I’m not saying that there aren’t any good trading teachers and mentors out there because there are. They’re just extremely difficult to find amongst the abundance of fakes. Below I’ll share some tips on how to distinguish real trading educators from scammers.
The Rise of Fake Trading Gurus on the Internet – Especially Social Media:
Social media networks like Facebook, Twitter, Instagram, TikTok, and YouTube certainly have many advantages, but there’s no doubt that their existence has contributed to the ridiculous rise of fake gurus, especially within the trading and investing space.
For unscrupulous individuals, these social media networks become ideal platforms for tricking and funneling people into their schemes. With a rented Lamborghini, fake stack of cash, and some false promises, they can attract thousands of followers in no time. Then with their cringe-worthy facade of success, they start selling lousy courses for hundreds or thousands of dollars – with no refunds.
If you’ve spent even a minimal amount of time on one or two social media platforms, then you’ve probably seen the sort of thing I’m talking about. For example, the eighteen year old “life coach”, the nineteen year old “business mogul”, or the twenty year old “trading guru”. I truly wish I was making this stuff up, but it definitely exists. Not only does it exist – it’s spreading like wildfire.
Unfortunately, these fraudsters feed on our human nature – our desire to make fast, easy money and live a luxurious lifestyle. But it’s just a psychological trick. For those well-versed on how these kinds of scams work, it’s easy to spot and laugh at. But for those who don’t know any better, spending hundreds or thousands of dollars on some bogus course ends up being a sad reality.
Trading Education Sins – How to Know When You’re Dealing With a Fake Guru:
The fake gurus (aka marketers/salesmen) understand your desire for a “magic pill”. So they prey on that desire for instant gratification and immediate results in a number of flashy ways. But the truth is that there’s no real substance behind their claims.
Here’s a fairly comprehensive list of red flags to look out for in your search for legitimate trading education:
- An Obsessive Focus on Lifestyle and Results (Cars, Mansions, Money, etc.) Over the Actual Process and Skills Required.
- Any Sort of Income or Profit Guarantees. There Are No Certainties in Trading – Only Probabilities.
- Reviews or Testimonials That Highlight Short-Term Success (1 Single Trade, For Example) Instead of Long-Term Profitability.
- Trying to Trick You Into Thinking That Their Pre-Recorded Webinar is Actually a Live, Real-Time Webinar.
- Attempts to Increase Their Own Credibility By Association (Paid Pictures With Celebrities or Speeches at Renowned Locations).
- Offering Trade Alerts/Signals (Especially on Small Caps or Penny Stocks) and Recommending You Blindly Copy Them.
- Trying to Make Trading Sound Extremely Easy While Sidestepping the Core Skills Required For Durable Success.
- Extremely Volatile or Parabolic Equity Curves That Suggest a Lack of Risk Management or Distorted Profits.
- Disparaging Real Jobs or Telling You to Quit. You Can Still Learn, Train, and Potentially Even Trade With a Full-Time Job.
- Offering an Extremely Expensive Masterclass or Mastermind Group For an “Exclusive” Group of Students.
Using the List of Red Flags to Categorize Authentic Gurus From Fake Gurus:
On the whole, it’s extremely difficult for even some of the best trading educators not to show at least one or two red flags. This is because the small number of honest and transparent educators tend to get drowned out by the large number of unethical marketers. Sadly, the truth coming from a real trading guru is dry and boring compared to the fun and exciting lies created by a fake one.
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In order to capture people’s attention, at least initially, some solid gurus sometimes have to work some lifestyle components into their advertisements – otherwise they wouldn’t get much attention. So the list of red flags above can be used as a guideline, but the existence of just one or two shouldn’t immediately categorize them as “fake” – it just means that you need to be cautious and do more investigating. 3 or 4 red flags is a bad sign, but anything over 5 means you should probably run in the opposite direction.
Differentiating between real and fake gurus can be a challenging task because of all the moving parts (track records, quality of course/program, marketing, etc.). One good example of this is Thomas Kralow – who has become a bit of a polarizing figure. On the one hand, he has advertisements showcasing fancy cars, penthouses, boats, etc. (the typical mark of a fake guru). But on the other hand, I think his course, if approached correctly, offers quite a bit of value for beginners. So things aren’t always clear-cut.
Then there are educators like Josh Schuler at Trade With Profile, for example, who don’t take part in any gimmicks. He’s on the 100% real end of the “trading guru” spectrum. You won’t see any advertisements from him showcasing stacks of cash, Lamborghinis, or any other lifestyle nonsense like that. His program is all about gaining a real understanding of markets and training to develop legitimate skills. His following isn’t massive like many of the “fakes” – but he attracts a smaller, more committed/serious group of students.
Overall, judging good trading education/training programs based on popularity isn’t usually the best way to go. You might assume popularity equals good quality, but in many cases, that popularity is just coming from questionable marketing/advertising.
Conclusion – Look Past Entertainment and Marketing For Education and Substance:
In order to protect yourself within the wild world of fake gurus, you have to understand how they operate. They fill you with unrealistic expectations by focusing on massive potential rewards instead of the proper process required to achieve it. It’s an attack on your psychological weaknesses. They feed you lies and toy with your emotions just to make some money.
But all their flashy entertainment and false marketing does is set you up for failure instead of success. The reality is that good trading is skills and process-based, not results-based. So if someone is trying to sell you on the lifestyle of a trader instead of mentioning the process (having a statistical edge and executing on it with consistency and discipline), then they’re flat-out fake.
The trickiest part about distinguishing real gurus from fake gurus is that results don’t always tell the full story. It can be difficult to differentiate luck and deception from skill. For example, a trader that runs an alert service can seemingly have a great track record of winning trades. But how much of that is distorted by the fact that thousands of people blindly follow them into each trade?
There are also instances where people do extremely risky things, like take their entire life savings and put it all into some random penny stock. No trading knowledge or skills are required to take an idiotic gamble like this. But by sheer luck, this sort of thing will work out sometimes. Should the person that makes a million dollars this way be able to call themselves a trading guru?
Overall, the trading educational space is a wild world full of fake gurus. But the good news is that you’re now armed with some helpful information to avoid them. On your search for legitimate trading education, keep your focus on building skills and developing self-sufficiency. The luxurious lifestyle the fake gurus try to sell you on simply isn’t possible without following the proper process.
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Written by Matt Thomas (@MattThomasTP)
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I’ve had my fair share of being either tricked into high-priced education programs or down-and-out scams. When I added up the money I spent I got shocked as it came to almost $40K. I had the money and thought I could buy my way to success.
Eventually, I found affordable courses that not only taught me the basics that were heavy on risk management but also provided trading tools and live trading classes where we could see trades being made in real-time. This was an eye-opener because, among the successful trades we saw, there were unsuccessful. trades too. The skill that created success was over time, there were more winning trades than losing ones. No overnight riches were promised or implied. In fact, the biggest lesson was on learning how to be disciplined and non-emotional about trading. Once these characteristics are discarded, all bets are off.
Hi Edwin – I really appreciate you sharing your experiences in regard to trading education!
I personally jumped into the trading world thinking I could just subscribe to some alert services, newsletters, and chat rooms – and make thousands of dollars per week/month by blindly copying somebody else’s trades. I did this for a couple years until finally taking a long, hard look at my results and realizing how ineffective this approach was. After burning through $20-30K between subscription costs and market losses, I finally made the decision to start building the right habits and skills of a legitimate, self-sufficient trader. I don’t necessarily like to even think back on those early days because it’s honestly embarrassing to consider how incredibly ignorant I was. But I hope it serves as a lesson to all the new, hopeful traders out there.
Trading is a skill-based, peak performance endeavor that requires hard work and effort. Not just education, but actual training (there’s a difference between acquiring information and developing functional skills). I try extremely hard to get this message across, but much of the time I still think it falls on deaf ears. The “trader lifestyle” that typically gets marketed by shady/fake gurus is just too enticing for many to resist. They succumb to the get-rich-quick programs because they’re attracted to the false promises of fast, easy profits. I truly wish more people would take the proper approach to trading right from the start, but unfortunately, the message doesn’t often resonate until they learn firsthand the hard way (by diving into markets untrained/unprepared and losing a bunch of their own money).
Wow, someone needed to say it as it is. It has been a trend for a very long time now. Fake gurus, selling flashy lifestyles instead of selling the process and the products.
This is the age of information. It is now more easy to spot them out than it used to be.
Thanks a lot for the warning signs. much appreciated
It certainly has been a trend for a very long time now – and sadly, I don’t see it coming to an end any time soon. In fact, I think it’s gotten much worse over the past few years with the rise of numerous social media platforms. There’s so much shallow garbage out there right now that only focuses on lifestyle, and unfortunately, it’s what people are attracted to – so they fall for it. But all the short and lousy courses/services are completely ineffective. It takes far more depth than “foolproof indicators”, “hot picks”, and “guru alerts” to become a consistently profitable trader. There are no shortcuts besides legitimate training.
Thank you for these warning signs. I have been noticing that several platforms I have come across have several of these signs. One of the most common are all those flashy cars and an extravagant life. I also have seen some platforms that show pictures with celebs. I will definitely keep away from them.
Yes, the flashy cars (Lamborghinis, Ferraris, etc.) are a huge red flag. But the sad part is that displaying an extravagant lifestyle on social media works in attracting people. I wish it weren’t true, but if you want thousands of followers on Twitter, Instagram, TikTok, or other social media platforms, the formula is simple – rent a fancy car, mansion, and helicopter/plane for the day and you can “fake” wealth and status. This is what the fake gurus do. The extravagant lifestyle they display seems like it’s being funded by trading profits, but in many cases the vast majority of their income is coming through course sales. The lifestyle being displayed is just a disguise that tricks people into purchasing their course.
Don’t get me wrong though – there are legitimate gurus out there. They’re just extremely hard to find because unfortunately it’s hard to stand out in the unethical sea of ridiculous claims and false promises. When a fake guru is promising “$10K per month like clockwork” or “unlimited income without effort”, it’s hard for legitimate gurus to garner attention. Their message (which is the truth) about how durable trading success is hard and requires training just isn’t as exciting as promises of fast, easy profits. In some cases, people don’t even want to hear the truth. They want so badly for the course or program offering immediate results to work out that they ignore the warning signs. These are some of the reasons why many industries are saturated with fake gurus. It’s a mix of “educators” willing to trade their ethics for cash, along with individuals who want a “magic pill”. But in trading at least – the magic pull doesn’t exist. You have to put the work in.