Day Trading Chat Rooms – What to Realistically Expect

April 22, 2010 · Posted in Penny Stocks · Comment 

About two years ago I entered a slump in my day trading. I decided to hunt the internet, and there I found many day trading chat rooms. One by one I signed up for trials to see what they were about. I had never been in a chat room before.

After being in a few rooms, my impression was that the members of the room were looking for a leader, a guru, someone with the answers. I guess I was too, although I already had about thirty years of trading behind me. I’d like to think is was just more curious than actually looking for answers. Most of the room members seemed very naive. I’m sure they thought they’d be given an indicator or method that would allow them to start making money right away. The other thing I noticed right away was the ego of the moderators. They spoke with great authority, and suggested that their way of trading was the one and only way. Only they had the answer. And the room attendees, in each of the rooms, seemed to agree.

I did not see much new in any of these rooms. Each one had some kind of gimmick or special oscillator. Some had a black box approach, where you were supposed to just sit there waiting for the moderator to call out the trades. I did not see many winning trades from the little time I spent in any of these rooms. From what I saw, I doubted if any of these people ever made a dime trading. I kept moving on.

Eventually I came upon a chat room that was free. Free was interesting. How could it be free? They must be selling something. I logged on.

I heard the voice of a very calm, relaxed man that had just taken a huge win out of one of the stock index futures. Dozens of traders posted congratulations to the moderator for the winning trade, but more so for such a wonderful, magic indicator, and all the wonderful trading patterns from this magic indicator.

The magic indicator being used was actually introduced around 1980, but this moderator had some interesting improvements on the way it was displayed and the patterns it produced. And the room was not only free; there was a charity involved. He asked everyone to donate a little out of his or her winnings. How could anyone criticize anything that was done for charity?

The moderator made the claim that he invented the use of applying patterns to an indicator. He did rename all the patterns, but I recognized many of the patterns that were well documented in many old books. He just put strange names on existing patterns. The mostly new traders did not know these were old patterns. Nobody questioned anything in this room.

Despite nothing new here, it seemed he did an excellent job of categorizing many different patterns and putting them all together into a package that would be more readily accessible to new traders. So that was good. And there were many good concepts offered on trading in general, and money management. Also, the chat room was upbeat and positive. Most of the previous chat rooms I attended were negative and angry. I thought I should continue on.

I spent the next few months learning as much as I could. As much as I wanted to believe he had wisdom worth listening to and a viable approach, many things started really bothering me. One was his insistence that his indicator could lead price An indicator, which is a derivative of price, cannot lead the price. That’s just mathematically impossible. Another was his insistence that you cannot be watching prices while you are trading. What?! You cannot see what you are trading? If you were driving a car would you cover up the windshield? The people in this room would if he told them to.

I had a hard time believing that nearly a thousand people would accept everything that was being said. Accepting it so readily. Were they all drinking Kool-Aid? It was an interesting study on the need to believe in a leader, a guru. Someone that can help make dreams come true.

But I persevered. His trading results certainly looked more encouraging than mine did. I would get the recaps after market close on days that they were available. Nearly every trade in the recap was profitable. I tried to write down the trades as they were being called, and then tried to reconcile them in the recap after the market closed. But I began to notice in the recap that the winning trades were selected very carefully out of the real time comments. Again, nobody questioned any of this. Was I the only one who noticed the discrepancies?

At this point I decided to do my own testing. I had been in the room long enough to know every pattern and every nuance. I was good at programming and had the data to test. I took each pattern individually so I could find which patterns had profitable or encouraging tendencies. For my tests I decided I needed thousands of samples. I decided to test each of the patterns on five years of data, and broke them up into one year segments. I was just looking for profitable tendencies and robustness.

After programming everything, I tested the signals by hand; just to make sure my programming caught all the signals based on the rules, and did not create signals that should not have been there.

After spending weeks and reams of paper for my printouts, I found that none of the patterns resulted in a profit in any of the previous five years when tested mechanically. A pattern that was touted as winning 90% of the time, actually lost money, and in most years had less than 30% winning trades. Results on the rest of the patterns were less reliable than the flip of a coin, far less in most cases.

To summarize my testing: nothing worked. Nothing came close to a favorable tendency.
I tried to tell other people in the room about my research and the dismal results. Most of them would not hear it. They did not want to hear the truth. They were too invested in the method, and they had to believe they would eventually become successful if only they would hang on a bit longer, learn that secret that is just around the corner. But most of these people stayed in the room, some had been in for years, and kept showering congratulations onto the moderator for the great trades, and great magic, leading indicator. Did they ever look at their account statements?

You might assume my time spend in this room a waste of time. That maybe I thought that this guru did have the answer to trading success. I knew better than to expect this. The sad part is that so many other people don’t know better. They are told something that they want desperately to believe, and they believe it. They don not test it. They do not question it. They believe blindly. They invest much time and money, and then they get past the point where they simply want to believe. Now they are too invested and they have to believe. They will disregard all common sense and all facts and proof in an effort to keep the dream alive. I certainly learned about psychology and the mind of chat room traders that I compete with every day.

Trading is hard work, and every trader has to find what fits his or her own personality and temperament. Nobody is going to easily give it away, whether in a free chat room, or a paid room or seminar, or a so-called trading school. There’s a whole industry out there that supply traders with tools and education. Very little of it is good. Most of it is a waste, taught and promoted by people who are not successful using the approach themselves.

Author: Doug Tucker
Article Source: EzineArticles.com
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Day Trading Training – A Live Forex Trading Room

March 8, 2010 · Posted in Penny Stocks · Comment 

Learning to day trade the forex market can be a very difficult task if you do not learn from a trained professional who has day traded with profitable results for years. Day trading is perhaps the most popular form of speculative trading, however this does not mean it is easy, and as such needs to be learned from someone who has been in the business for years and achieved success. Day trading the forex market, although difficult, can be a very lucrative way to trade if you learn from the right person. The advantages of obtaining day trading training in a live trading room are many and should not be over looked.

Learning to trade via a live forex trading room will provide you with real time trades that allow you to take advantage of the volatility provided during the active trading hours in the forex market. This is one of the best ways to learn because you are actually learning in real time as trades are setting up and unfolding.

By learning from a professional forex day trader in real time you will be getting a window into how a professional trader thinks and what goes on in their mind as they are trading. This is essentially equal to “on the job” training; forex trading training in a live forex trading room will greatly expand your knowledge of market dynamics and the intricacies involved in forex trading.

One of the great advantages to getting day trading training in a live forex trading room is that you get to learn how to trade before the fact. Most trading systems or courses teach you in hindsight, or after the fact, learning how a professional trader thinks and acts in live market conditions is an extremely valuable tool. You will also pick up many other valuable pieces of information by trading forex in a live trading room, some of these include emotion management skills and money management, both are vitally important to long term forex trading success. There is really no better medium to acquire forex training from than in a live forex trading room.

Make sure that you find a resource that offers on going education and not just a signal service. It is important for your long term success that you get your forex day trading education from a live trading room in which the head or senior trader is explaining why he is doing what he is doing, in this way you will learn valuable trading skills and entry and exit methods that you can then implement on your own.

Learning to trade from a live forex day trading room can be one of the most valuable investments you ever make in your forex education. Learning from an experienced, professional forex day trader is the best route to take if you are serious about becoming a full time forex day trader yourself.

Author: Sterling S
Article Source: EzineArticles.com
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The Common Misconceptions About Day Trading Courses

February 19, 2010 · Posted in Penny Stocks · Comment 

The lure of day trading can be a strong one. This makes day trading courses therefore popular both online and offline. Despite its popularity, however, many participants have reportedly been disappointed to the course which they have attended. What is then causing the very high level of dissatisfaction?

A major factor identified would be the very high expectations that people set for this course Usually, it is but common to trading courses to include either a broad area of study pertaining to general practice or a deep niche option. Unfortunately, many attendees think they are getting something else for the price of their tuition. Some most common myths pertaining to day trading courses are the following:

1. One course and I’m ready to go!

Majority of the newbie traders have this mentality that one course is already enough to make them a successful trader. They attend a half-day seminar, focusing on the lecture inside the room, and then walk out confidently as if they had all mastered the circuitry of trading. But that could not be possible!

Sad to say for the valiant amateurs, being a good trader calls for more than two or three hours to spend at trading courses. A number of courses is somehow needed to formulate fundamental familiarity to the different tactics and chances in day trading.

2. This will fix everything.

The thought that day trading courses can give solutions to problems is another big misconception. Multiple bad trades, heavy losses quarter to quarter, and consistently missing opportunities often propels day traders into the next course they see advertised. They are hoping that by attending the course, they will get all of their problems pertaining to trading being solved and take back all their money being lost.

Sadly, trading courses aren’t a cure-all solution. Review of strategies and tips on trading will be certainly offered by such courses. On the other hand, traders who failed to research their investments, separate their emotions from work, or being inattentive to basic warnings would not be spared by learning extensively day trading. A sure winning formula on trading is not assured by trading courses, the good news however, is that it provides guidelines in filling up the skill discrepancy as well as aiding in the knowledge of the said craft.

3. Experts know all about trading.

Final misconception about day trading courses is that the experts sitting in front of the room knows all about it. Believe everything they say, and copy their strategy exactly for perfect profits. That is the whole idea of the course, right?

Well, not exactly. Many trading experts are simply traders who’ve figured it out for themselves. Their strategy may work for them, but not deliver similar results for you. Nevertheless, you can surely benefit from listening to the experts saying and presenting their marketing system with regard to trading and their experiences as investors.

Despite the myths about them, day trading courses do offer a number of tangible benefits to attendees. They can educate traders to some basic sets of skill, specific techniques in trading, and devise forum for inquiries. They are also effective grounds for networking. It will be probable to evade dissatisfaction and have the most out of attending a course by knowing the myths about day trading courses.

Author: Jeffrey H Schmidt
Article Source: EzineArticles.com
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