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BUX review: So Techcrunch recently reported that BUX the casual trading app recently raised another $6.9m to be awesome, grow bigger beards for their developers and introduce more novices to the world of betting on financial markets through online trading.
So what is BUX?
BUX is basically an APP that uses the technology produced by Ayondo a social trading broker that publishes and ranks the trades and historic profit and loss of the traders on the platform.
The premise of social trading is that by collaborating and using the “cloud” to harness the knowledge of the “crowd” traders stand a better chance of making money.
By viewing the best traders and having the ability to copy their trade social trading platforms claim that you can make money by doing nothing.
In theory, this is true, if you pick the best traders to follow and choose to copy their trades automatically you will make money. But picking a winning trader is just as hard as picking a winning stock. Just because they have gone up in the past doesn’t mean they will go up in the future. In fact, pretty much everywhere you look on investment platforms you’ll see the phrase “past performance is not an indication of future returns”.
When writing this BUX review, it seems that what BUX does, is make it one more step removed from any resemblance of a professional trader or investor.
So how bad is this? Pretty bad.
The best investment managers and hedge funds only really return investors a few per cent each year. They are highly educated, experienced professionals with the best research available and access to the management of companies they invest in. You can see FCA regulated investment fund performance on Trust Net or hedge fund performance on Eurohedge. If you want to follow these professional traders, you buy into the funds in a heavily regulated and risk assessed environment.
If you want to follow experienced traders through either spread betting or trading CFDs you can follow or copy on a social trading network. There are consolidated trader league networks popping up like Coalface Capital that show the best traders from across all social trading platforms which saves a bit of time.
What BUX does is let you follow and discuss the markets with complete amateurs who don’t have a clue what they are doing. A quick download and sign up gives you 1,000 B to trade with. The interface is not great either, to be honest. It’s a little crowded and the concept of leverage not properly addressed in terms of risk.
So is BUX worth a go? Probably worth a download for a bit of fun, but in no way a tool to try and make money from. After all most private investors lose in the leveraged markets.
Betting on financial markets and trading stocks, especially on a leveraged basis where losses can exceed deposits is not for everyone.
Never bet or invest money you cannot afford to lose.
One other thing, their strapline “Stock trading made exciting for everyone” seems uneducated and inexperienced.
The stock market, should not be exciting, it is there to provide a mechanism for listed companies where investors can find value and growth in the long term.
The stock market is actually very dull if used properly. It basically goes up eventually but undulates along the way.
It is this undulation that causes the greedy to lose money by making wild short term bets.
And it’s not for everyone, at all.
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