“There is no free lunch” is a common saying all around and it fits really well in the financial markets. You should be always aware of what the other person might earn, gain or have an advantage when presenting something to you. He might just be giving you a piece of advice or telling you a hot-tip, but he probably will earn something out of it.

It can be as small as only an email. That might be enough for him since then, with it, he will be able to keep in touch with you and offer you all the new and best deals that he might have in the near future. This might seem small, but for him it might be huge. Saying that he only convert into sales 1% of all his emails that he send every now and then. Well, then it is pure math: the more people’s email he has to send, the great its sales will be since that 1% is a “fixed” rate.

Some other might profit from some hot tips by buying before the crowd do. This is an old trick and I have seen it happened many and many times over. It goes something like this: this so-called “guru” buys something, then he start pumping out emails and recommendations on how good that stock is. Since many people receive his emails, some might really buy the stock, hence the stock WILL indeed rise. But to no avail since it lacks fundamental reasons for this rise and it will only rise because of those rumors.

Then, guess what the guru is doing the exact moment that the crowd is buying believing that they will earn big time this time? Right. He is selling. He has made his profit and is selling the moment the crowd is beginning to buy. Sounds familiar? Do not worry, I fell for these tricks at the beginning many times over, but with time you will be able to see who the real deal is and trust your instincts.

Author's Bio: 

Fernando Brinkerhoff is a long time article writer and trader. He also like to spend some quality time browsing around websites like Waterloo Tool Boxes and Best Friend Bracelets.