Online trading has always been a subject of controversy. Some see it only as a trap for naïve investors, a financial sinkhole where only the so-called ‘gurus’ make a profit. Others claim, on the contrary, that it is a legitimate profession in its own right, offering the possibility of generating regular income, provided you have the right training and a disciplined mindset. So whom should we believe?
In this article, I aim to provide honest and balanced insights. Drawing on experience shaped by failures and hard lessons, I hope to show you that while trading itself is not a scam, it can certainly become one if people expect miracles without putting in the required effort.
The illusions that fuel the idea of a scam
The main issue with trading is not the practice itself, but rather the false promises that crop up all over the Internet. A simple search for “How to make money in the stock market” often leads you to adverts promising daily profits of hundreds (or even thousands) of pounds at the click of a button.
Such claims suggest some kind of “magic recipe”: a foolproof indicator, a secret software tool, or a self-proclaimed coach offering to “train” you—for a hefty price. Unfortunately, many beginners fall for it, invest all their savings, and soon find their account wiped out. They then conclude that trading is a giant con. However, the real con lies in the promise of quick, effortless success.
“Trading is not a scam, but it can be portrayed as such by those who sell you a dream.”
Stop chasing the ‘perfect strategy’
For a long time, I searched for that ideal formula, the ultimate indicator, or the “magic” pattern that would guarantee me consistent profits. Time after time, I would come across new techniques advocated by an “expert”: Ichimoku, Bollinger Bands, harmonic patterns, high-frequency scalping, and so on. The result? I never truly mastered any of them in depth and abandoned each strategy at the first setback.
With hindsight, I realised that the market is too unpredictable to be “tamed” by any single approach. The best strategies all have their flaws, their slumps, and we need to accept those difficult periods. More importantly, a trading plan should suit the personality of the person applying it. If you dislike intense emotions, ultra-fast scalping will probably not be for you. If you are impatient, holding positions for several weeks in swing trading might be painful.
This realisation often surfaces in testimonials from traders who, after failing with countless methods, finally succeed once they adopt a style that matches their own temperament. So the best advice is to stick to one approach (equities, Forex, futures, options, short term or longer term, etc.) and study it seriously across hundreds of trades, so that you fully understand its nuances.
Manage risk to preserve your gains
You might have a decent or even a good strategy and still lose everything if you fail to manage risk properly. This often happens to day traders who rack up a series of small wins, only to blow up their account on one bad trade.
In my own experience, I’ve faced this more than once: I would make a few consecutive wins, get carried away by euphoria, massively increase my position size, and then expose myself to a market reversal. It’s like being in a casino—“the house always wins” eventually if you let adrenaline or greed take over.
To avoid this scenario, it is vital to establish a clear stop-loss before entering a trade and never shift it further away. Likewise, you should adapt your position sizes to your overall capital, so that a loss has a minimal impact. One principle, often repeated in the trading community, sums it up nicely: “Cut your losses quickly, let your winners run.”
Easier said than done, of course, but that’s precisely where discipline comes into play—the same discipline repeatedly highlighted by many trading accounts:
“No matter the strategy, if you don’t follow a strict money management plan, you’ll blow up your account sooner or later.”
Also read: What is money management?
Psychology: the big challenge
Another often overlooked aspect is psychology. In most traders’ experiences, they stress the importance of dealing with emotions: fear of losing, the urge to “make it back” after a failed trade, or the feeling of invincibility after a few wins.
Until you recognise that these emotions can push you outside your trading plan, leading you to overtrade or take reckless risks, you are sitting on a ticking time bomb. Conversely, a beginner who keeps a trading journal (to record every trade and the emotions felt) tends to improve more quickly. By reading their journal, they see that their biggest errors come not from the market but from their own unchecked reactions.
Some even suggest taking “time-outs” when you feel overwhelmed by negative emotions. “When everything seems to be going wrong, it’s better to shut down the trading platform and go outside for a bit.” This simple but powerful advice helps to avoid “revenge trades” or rash decisions that can be very costly.
Also read: Trader psychology.
Typical mistakes traders often make
- “Strategy hopping”: switching methods as soon as you incur a loss. The result is that you never dig deep enough to learn why the strategy failed or how to improve it.
- Too big, too soon: investing all your savings after a few successful trades. If the market turns sharply, your account can be wiped out.
- Refusing to cut a loss: hoping the price will go back up to “recover”, only to see the loss grow until it wipes out previous gains.
- Overtrading: constantly placing orders, even when there is no clear signal or when the market is flat.
Many traders recount exactly these types of mistakes, often occurring in their first or second year of trading. More often than not, the turning point comes when they acknowledge their own psychological biases, accept that losses are inevitable, and start structuring their approach more thoroughly.
So, is trading a scam?
The most honest answer is: no, if you treat trading as genuine work, with proper training, strict risk management, and continual self-reflection. On the other hand, yes, it can become a scam if you fall for those dream-sellers and fail to learn how the markets actually operate. There are plenty of “illusions”:
- Guaranteed profits
- 90% success rates
- “Magic” software supposedly doing all the work for you
- Coaches or trainers unwilling to disclose their own results
In reality, most beginners end up losing money because they lack mastery of these core foundations: discipline, psychology, and money management. Those who do succeed invariably highlight the effort required to overcome that difficult initial phase. It’s not about luck or finding some “golden system”; it’s about a challenging learning curve.
Conclusion
Ultimately, asking whether online trading is a scam is a bit like asking if entrepreneurship or launching a start-up is a scam. The failure rate is high, many people get burned, and some use dubious tactics to sell training courses. Yet no one claims that “entrepreneurship is one big scam”: we simply accept that it’s a risky world requiring knowledge, a certain mindset, and solid preparation.
The same applies to trading: it requires time, effort, and the resolve to avoid the pitfalls lurking everywhere. I once read a piece of advice that helped me immensely:
“If you want to speed up your progress, focus less on maximising gains and more on limiting losses.”
This perfectly sums up the mindset needed to succeed in the markets: learn how to gain little by little, protect your capital, learn from your setbacks, and, above all, don’t enter trading convinced you’ll become an overnight millionaire. Like any profession, trading primarily requires time, persistence, and constant self-evaluation. If you’re prepared to put in the work, you’ll discover that trading itself is not a scam… but it’s certainly not a golden road open to anyone on a whim.
