Why your feed makes trading look easy
Social media shows you a filtered view of trading. Big wins get posted, shared and pushed by the algorithm. Losses, blown accounts and quiet quitting rarely appear. Behavioural-finance research describes this filtering in several ways.
- Survivorship bias means judging a group only by the members who are still visible. If thousands of people try a strategy and a handful do well for a while, you only hear from that handful. The ones who lost money stopped posting.
- Self-enhancing transmission bias is a pattern described by David Hirshleifer and co-authors. People share their results more when they are good than when they are bad. A strategy can spread because its winners talk, not because it works.
- Attention-driven trading is what Brad Barber, Terrance Odean and colleagues found in their studies of retail investors. Traders pile into whatever is in the news or trending, and on average those trades perform poorly.
- Herding and social proof means copying others because many people appear to agree. A comment section full of "profit booked" replies feels like evidence, but it is not a track record.
None of this means every trader online is lying. It means that what you see is a biased sample. Results that look normal on your feed are often the rare exceptions.
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How trading influencers earn money
Before you trust a claim, ask how the person posting it gets paid. Common income sources include:
- Paid signal groups on WhatsApp, Telegram or Discord, where members pay for trade calls.
- Courses and mentorships sold on the promise that you will trade like the seller.
- Referral and partner fees from brokers or platforms for every person who signs up through their link.
- Sponsored posts for apps, "funded account" programmes or investment schemes.
- Ad revenue and views, which reward excitement and big numbers, not accuracy.
If someone earns from your sign-up, subscription or attention, that is a conflict of interest. Their results may still be real, but their incentive is to show you the best of them. A creator who openly states how they are paid is easier to judge than one who hides it.
Fake and misleading account screenshots
A screenshot of a trading account proves very little. Here is why.
- Demo accounts use virtual money and can look identical to real accounts in a screenshot.
- Editing a balance, profit figure or trade history takes seconds with ordinary phone apps.
- Cherry-picking means showing the best day, the best trade or the best account out of several.
- Missing context hides the deposit size, the losses before the win, the leverage used and the risk taken.
- Short windows show a good week, not a year of results that includes drawdowns (falls from a peak balance).
A large profit on a small account often means very high risk per trade. With leverage, the same position size that produced a fast gain can wipe out an account just as fast. Leveraged forex and CFD trading can lose money quickly, and a screenshot of a win says nothing about how close the account came to a margin call. See risk management for how position size and stop-losses work.
A checklist to evaluate any trading claim
Use these questions on every post, video or signal group before you act on it.
| Question | What a weak claim looks like |
|---|---|
| Is the full track record available, losses included? | Only winning trades or a highlight reel |
| Is it verified by a third party, or only screenshots? | Screenshots and testimonials only |
| How long is the record? | A few days or weeks |
| What was the risk per trade and the largest drawdown? | Never mentioned |
| How does the person earn money from you? | Hidden, or "I just want to help" |
| Is there pressure to join now? | Countdown timers, "last few seats" |
| Is the platform or adviser licensed in Pakistan? | Vague answers, foreign names, no licence details |
If several answers point to the right-hand column, treat the claim as marketing, not evidence.
Forex scams on social media in Pakistan
Many forex scams on social media start in chat groups and DMs. Typical signs: guaranteed daily returns, "account management" where you hand over your login, pressure to deposit more to "unlock" a withdrawal, and requests to send money to a personal account.
Pakistan's regulators have warned about this. On offshore platforms, per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan. Also, per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse. For anyone offering futures trading services, the law is clear: under the Futures Market Act 2016, s.47(1), no one may carry on a regulated activity (futures broker, adviser, representative) without an SECP licence. To check who is licensed, per the SECP, lists of licensed brokers are on the PSX and PMEX websites.
For more on the legal side, read law and regulators and regulation and safety.
Practical exercises
These exercises help you notice hype. They train judgement; they do not lead to profit.
- Shadow log. Pick an influencer and record every call they make in a spreadsheet for several weeks: entry, stop-loss, target and outcome. Count the calls that were later deleted or never mentioned again.
- Screenshot test. For every account screenshot you see, write down what is missing: deposit, period, drawdown, real or demo. Notice how often you cannot tell.
- Incentive map. For each account you follow, note how they earn money. Unfollow anyone whose income source you cannot identify.
- Cooling-off rule. When a post makes you want to trade immediately, wait until the next day. If the idea still makes sense after you check it against your own plan, then consider it. This targets FOMO.
- Opposite search. After a convincing post, search for the strongest argument against it. This works against confirmation bias.
Where to go next
- Realistic expectations explains what normal results and losing periods look like.
- Recency bias and overconfidence cover why recent wins feel more meaningful than they are.
- Process vs outcome explains why a single good result does not prove a good method.
- Trading vs gambling helps you judge whether a style shown online is closer to betting.
Frequent questions
Are all trading influencers scammers?
No. Some share honest education. The problem is the filtered view: wins spread more than losses, and many creators earn from referrals or courses. Judge each claim by its evidence and the creator's incentives.
How can I tell if a trading screenshot is fake?
Often you cannot. Screenshots can be edited, taken from demo accounts or cherry-picked. Treat them as unverified unless a full, independently checked record is available.
Is it safe to join a paid signal group?
Paying for signals does not make them reliable, and you remain responsible for any losses. Check the full track record, the risk taken per trade, and whether the provider is licensed. Leveraged trading can lose money fast.
What is survivorship bias in trading?
It is judging a strategy only by the people who succeeded with it, because those who failed are no longer visible. It makes trading look more profitable than it is.
Someone offers to manage my trading account for guaranteed returns. What should I do?
Treat guaranteed returns as a warning sign. Do not share your login or send money to personal accounts. Check the regulator's guidance on our law and regulators page.