The economist says that it will not be a good idea to jump in and start trading without any previous knowledge. He recommends avoiding websites that promise high returns to avoid becoming a victim of scams.
It is crucial for success to work ethically, especially when it comes to the stock or crypto market. It is essential to detect scams to avoid becoming a victim of those who seek to live on other people’s money. Besides, investors should never trust but always verify, according to economist and financial advisor Eduardo Gavotti.
Concerning experience working with financial services, the professional economist and trader revealed data that can help people start trading without falling into scams. He gives some recommendations to approach trading, without losing money.
Study, Analyze, and Determine an Approach to Start Trading
Gavotti considers that it will not be a good idea to jump in and start trading without any kind of knowledge or preparation. He says that anyone doing this will probably lose money. He adds that it will make more sense to do some research before starting to trade.
The economist recommends that investors have the analysis of the assets that interest them. They should determine the best time in the market to enter and take advantage of a wave of growth.
There Are No False Promises in Serious Trading
Gavotti also recommends not paying attention to anyone who approaches, ensuring that the trading can generate a 400% profit. He believes that whoever makes a promise like that is surely lying. He adds that anyone who promises big returns is claiming to already know the movement of the market, which “is impossible unless that person can predict the future.”
The financial advisor explains that traders or brokers do not bring good intentions if they do not specify whether the trading has a reverse side. To start trading assets, a person needs to understand that it is possible to make a profit, but that there are also risks of losing money.
Regarding Investing, Ethics Must Be the Greatest Benefit
The economist clarifies that there are two types of financial advisors. On the one hand, some make recommendations based on risk appetite and customer profile. “This type of advisor will give you a portfolio with a list of suitable recommendations for you to achieve your goal in a given time,” he said.
However, there is also another type of advisor, which Gavotti calls “pseudo advisers” as they have agreements with brokers (trading platforms). In other words, they are intermediaries, but they do not reveal this information to their customers. These people approach customers, request their money to manage their account, say that they will invest it, and ask to share the profits.
Gavotti said that ethical advisers manage their customers’ capital, receive returns in a certain period, and benefit from a previously agreed profit margin. On the contrary, pseudo-advisers promise a percentage of profit that they generally do not cover, and they push buttons very quickly, while the broker pays them for attracting customers and allocates commissions for volume traded.
Do Research to Detect Scams
Among his recommendations, Gavotti says that it is necessary to learn everything before selecting a cryptocurrency trading platform to operate. Investors must never trust and always verify, as he emphasizes.
Then he explains that it is like selecting a doctor since their reputation is as relevant as their diploma. Fortunately, people now have access to information on the Internet that can help understand who is reputable and who is not.
To avoid becoming a victim of scams, Gavotti advises rejecting websites that offer free things. In this regard, he said that it is necessary to doubt as they may be casting a hook to catch the unwary.
By Alexander Salazar