Investors Underground is a educational business that sell day trading courses and access to a premium chat room with a community of experienced traders, dedicated to helping others learn how to trade. Nathan Michaud is the founder and one of the most highly regarded penny stock traders with a remarkable 10 year track record. Over the years he has earned nearly $3 million from thousands of small profitable trades just like Paul Scolardi. He’s proven himself to be a profitable trader for the last decade but the real question is, can he really teach his strategies to others? With 100’s of self proclaimed stock market guru’s selling courses online you’re right to be skeptical. 100’s of positive reviews from past students claim that he is the ideal mentor while others think he’s a scam artist!
Who is Nathan Michaud
Nate started trading part time back in 2003 and moved to full time when he graduated from college in 2007 with a degree in finance. Within the space of 6 months he started to become consistently profitable and his trading profits helped pay for college. Believe it or not 6 months is a short time-frame to make consistent profits, it took day trader Ross Cameron 18 months to achieve this feat. He spotted a gap in the market and decided to launch Investor Underground Chat as a way to supplement his income. His chat room rapidly started to gain traction so he merged his chat room and blog into one. Nate continued to attract a large following from his blog InvestorsLive.com, where he shared his watch-list for the day and trading plan. Even the great Timothy Sykes used to often visit blog for a second opinion and see what tickers he was following, this later led to them forming a business relationship as Nate would routinely speak at Tim Sykes conference’s and joined the Profit.ly team for a short period.
Investors Underground was formed in 2008 with the aim of cutting through all the bullshit on Wall Street and create the best day trading service. In total Nate has 13 years of experience to back up his service, so luckily for you he’s made every mistake in the book so you won’t repeat the same mistakes that led to him losing $20,000 in one day. Investors Underground has both a chat room and an educational service built-in with two plans available for subscribers, IU Standard starts at $197 per month and IU Elite is a hefty $297 per month. His service is extremely pricey so before signing up it’s best to avail of the free one week trial offered to new members and if you think Nate is a good teacher use the latest promo code to save money. Despite Nate’s service having a good reputation most new penny stock traders have small accounts so they can’t really afford to spend hundred’s of dollars per month just on education as they have other expenses to consider such as software, broker fee’s and level 2 feeds. There are dozens of positive reviews and testimonials from current members on his site. Any of the complaints from past subscribers are those who didn’t study hard enough, they expected to blindly copy trades and bank easy profits without any work.
Inside the Members Area
Once you sign up as a paid member, this is exactly what the member’s area looks like. It’s a simple, organized layout, easy for users to navigate.
Live Day Trading Chat-rooms
Investors Underground has three different chat-rooms to suit everyone’s trading style:
- Swing Trading chat room – Run by Michelle Koenig from Tradeonthefly.
- Momentum chat room – This is the most active but has strict rules, every post has to add value or the moderators will mute you, this pisses people off but I think it’s beneficial as the chat is less cluttered with questions Google could answer.
- OTC chat room – Almost no activity in the OTC room, not popular with subscribers.
On average during markets hours 500-1000 people are active, about 20% of the chat room are newbies who have no clue what they are doing and are looking for real-time alerts from the top moderators. Members have the opportunity to learn from many well seasoned traders such as Cam B, Oddstocktader, Offshorehunter, AT09_Trader, Derrick J Leon, Tim Grittani, Emil, Splendores, OzarkTrades, Eric Wood, Will Wagner and Brandon Garretson. Be warned that it will be intimidating at first because it’s full of experienced traders sharing their own lingo that will confuse you, it’s advised to watch both Textbook Trading and Tandem Trader before joining to provide a solid framework. These DVD’s are crazy expensive but you can buy them on eBay for quite cheap and save thousands. You can buy them for about $40 on eBay compared to paying $1297 on the official website. Be careful about trying to download courses or DVD’s for free on torrent websites because you’re likely to download a nasty virus.
Is Investors Underground a Scam?
When it comes to any trading service, it has to be one of the most asked questions. Why would someone supposedly making six figures per year want to sell me a trading course revealing their strategy? It’s difficult to trust anyone online as there are many fake traders selling courses with over hyped sales pages, claiming how you can make $10,000 per month following their simple strategies. Nate’s service isn’t perfect but is definitely one of better communities to join, Investors Underground does have negative reviews but that’s expected when you’ve thousands of students. Past subscribers complain because they joined with the expectation of making easy profits by shadowing someone else’s trades but that won’t work since penny stocks move too fast. Instead IU wants to create real traders NOT followers. Rather than being a sheep it’s better to become an independent profitable trader on your own, alerts and lessons are there for guidance only.
Busted by the SEC
Surprisingly Nate had to settle with the SEC for his involvement in a penny stock pump and dump scheme that took place in 2006 & 2007. Nate was charged civilly not criminally, for manipulating the price of Asia Global Holdings using illegal techniques such as wash sales & matched trading and distributed press releases touting the company as a strong investment. 10 others were apart of the scheme and he ended up paying a fine of approximately $94,000 to the SEC, Nate commented on the ruling highlighting he was not involved with dumping 54,000 million shares of improperly registered stock. Despite Nate being one of the smaller fish in the case, what he did was incredibly stupid and no doubt massively regrets getting involved with such a shady group of individuals.
Moving on from the SEC incident, Nate has gone on to become one of the most followed small cap traders. Michaud has banked over $2.3 million in verified profits on Profit.ly, imported from his Speedtrader and BroadStreet brokerage accounts. Allegedly he has a winning percentage of nearly 75%, this is unheard of when trading penny stocks, apart from Timothy Skyes and a few others not many come close to that win rate percentage. Unfortunately he is no longer a guru on Profit.ly and decided to break away to form his own company as they didn’t align with his long term vision.
Nate has put together an impressive library of video content to help answer your questions or help deal with any issues you experience. So members have two ways to learn, real-time alerts in chat (don’t shadow his trades) and video lessons you can watch at any time. Trade recaps are provided at least three times per week, so you can review the trades he made during the week and explains his reasoning behind them, normally 5-10 minutes long. He’s constantly updating his library so he does have an overwhelming amount of lessons that tend to overlap a lot.
Every month there are about four webinars for members only, discussing recent trades (gains and losses), trade set ups and how to prepare for the week ahead. The best thing about these webinars is subscribers can submit questions live and material is covered in more detail, in comparison to the video lessons which can be too basic at times. Free webinars are given quite frequently to attract new members into his community but are very promotional. In total there is four years worth of educational material including power-points, seminars and most recent webinars.
Textbook Trading DVD
Textbook Trading is 8 hours of pure content discussing everything you need to know to start trading. I advise you to have a pen and paper ready to take down notes as you watch, each time you re-watch his DVD’s you learn something new that you missed beforehand. Nate goes through everything he has learnt from day one, detailing his success and mistakes along the way. Each topic is accompanied by real trade examples and visuals to give clear advice so you better understand his strategy. He covers his favorite setups, high-probability chart patterns and how to use level 2. The course alone with shorten your learning curve by ten fold and is highly recommend by Tim Grittani. It’s one of the top rated products on Investimonials with 144 5 star reviews which looks unnatural and probably gave members an incentive to leave a positive rating. I’d prefer if the DVD was shipped manually instead of streaming it online and Nate does promote his chat room within the training.
Tandem Trader DVD
Tandem Trader is a more in-depth continuation of Textbook Trading so you’re kinda of forced to buy both DVD’s. This training contains over 13 hours of live trading examples instead of the usual analyzing charts in hindsight which annoys me. Similar material is covered in his first DVD but in greater detail – how to read level 2, recurring chart patterns and setups that work in any market environment. Other aspects mentioned is the importance of sticking to your plan and controlling your emotions under stressful situations. As a bonus he interviews other successful veteran stock traders who have made millions following their own unique strategies. If you follow Nathan on Twitter (@investorslive) he often holds competitions giving away free trials and coupons for a select few lucky followers.
6 Reasons Why New IU Students Will Fail
1. Lack of Preparation
Day trading is not gambling, don’t expect to strike it rich out of pure luck. First step of preparation is education, to help you with this it’s recommended to start off with Nate’s DVD’s. This will help add some structure to your trading so you come to the market prepared everyday, you still might loss money but at least your odds of success are a lot greater. “Fail to prepare, prepare to fail”.
2. Lack of Proper Tools
This refers to using the best brokers, software and charting tools to maximize your chances of success. For international students, finding brokers for penny stocks can be a nuisance and some end up with free brokers such as Robinhood. Using Robinhood is the same thing as showing up to a gun fight with a floppy dildo in your hand.
3. Risk Management
Unless you develop strong risk management skills you will consistently lose over the long term. Protecting your downside risk is the name of game, new traders at the beginning focus too much on the potential rewards while they should be doing the complete opposite. For example if you only ever trade with 10% of your capital you can never blow up your account. Even if you have a 90% win ratio you still stand the chance to blow up by going in too big on a play.
4. Blatantly Following Alerts
The biggest issue with penny stock alert services is they attract people just looking to copy trades from the best traders. As mentioned before Nate wants you to become an independent trader that can think for himself and create his own trading plan. The alerts are there for guidance so you can learn how a mentor trades.
5. Averaging Down
Averaging down is a bad habit new traders use that can magnify losses. When you’re in a losing position it’s best to cut your losses short and move onto a new play, no one likes losing but it’s apart of the game. This in theory sounds simple to follow but under stressful situations and down $200 you easily can dig the hole a lot deeper. Remember hope is not a strategy, exit your trade when momentum is going against you.
6. Revenge Trading
Revenge trading is another account destroyer and is a classic problem for gamblers. “I’m down $1,000 but I can easily make it back on my next trade”. If you feel overwhelmed it’s best to step back and take a break until your emotions have subsided.
After reading my review of Investors Underground it is clear that if you surround yourself with a group of successful traders, you will become a better trader! Don’t join with the mindset of wanting to make money quick, as you’re guaranteed to fail. Focus on learning for at least the first 6 months not the profits. Investors Underground doesn’t sell a magic formula but they will help shorten your learning curve and give you a platform to improve your odds of success. Start off paper trading and after at least three months then trade live with real money. Paying $297 per month may seem ludicrous at first but if you master his strategy you could make back 100 times what you paid. Ultimately your willingness to learn, ability to bounce back from failure and discipline will determine whether or not you will be successful.