I've been day trading futures contracts for 6 years and I've visited or subscribed to over 20 chat rooms. I thought it would use this forum to make a few observations about these rooms.
Most of the members of these rooms are new traders looking for the insight of a seasoned trader to help them develop a trading strategy. There may be some experienced traders there looking to add to what they already know or just like the atmosphere of being in a trading community. As a professional day trader, you will find there are actually very few people you can talk to about day trading. It is nice to have group of people that can relate to the ups and downs.
If you are new to day trading and looking to develop a trading strategy, a day trading chat room might be right for you. Most chat rooms are less expensive that spending thousands of dollars on a face to face mentoring programs. Some of the rooms offer a webinar feel meaning they show you their charts and even trading platform so you'll be able to see how a professional trades in real time. Other rooms may only call out entries without saying why they're entering the market or showing you any charts. In this case, you are reliant totally on the room (which keeps you subscribing, by the way) but more importantly means you are not in control of your trades - not good.
Most of the rooms I've visited offer a discounted and in a few cases free trial offer, usually a week long. After that you are charged a reoccurring monthly subscription fee ranging from $100 - $250 a month for the rooms I've seen. Is it worth it? I say yes as long as you are learning a strategy that is consistently making you $$$!
The honest truth is that of the rooms I've been in, very few make money consistently. Most rooms post results, every week or month. And of course, all are profitable on paper which to any new trader would be a huge selling point. But you should realize that it is against the law for any chat room to post real money, cash results. What that means is that all results are simulated or done with fake money. Bottom line, they can post whatever results they want. For example, if a trade becomes even slightly profitable they might show that trade as a winner in the results despite the fact that the trade went on to become a full loser.
In the end, I would use a day trading rooms to get you started or add to what you may already know but I wouldn't put all my hopes on them. You have to develop your own trading style and make it work for you. If you rely totally on someone else to make you money then what happens when that person is gone?
Alan
http://www.livedaytradingroom.com
Tuesday, August 18, 2009
Friday, July 24, 2009
Day Trading Beginner Tips
I've had a lot of emails from beginning day traders so I thought I would put together a few pointers for those that are just starting. Most are based off of my own mistakes but hopefully it will answer some questions you may have and save you some cash in the end.
1) Invest in yourself. I did not - at first. I tried to be hard headed about learning to trade on my own - some of that was just being cheap. After much trial and error trading, I had lost a bundle. Seeking the advice of a seasoned trader will help you cut down the learning curve and protect your account. Invest in your education just like you did by going to college, a trade school, etc.
2) Treat Day Trading like a business instead of a hobby. This one is closely related to the tip above. If you expect Day Trading to eventually pay your bills, how do you expect to accomplish this is you don not put in full time hours? If you treat it like a hobby, then that is all it will ever be - a very expensive one at that.
3) Trade only with RISK CAPITAL - money you can afford to lose. If you are opening an account with next month's mortgage payment then you do not understand this concept. This is called trading with "scared" money. If you do not have at least $5000 of risk capital then I recommend saving up until that is possible.
4) Trade the appropriate amount of contracts for your account size. This can vary depending on your trading strategy but never put your entire account at risk. Trading too many contracts on too small of an account is a recipe for disaster.
5) Do not guess which way the market is going. The market is going to do whatever it wants to do. You can not stop it. Watch and react to your setups.
6) Set daily and/or weekly profit goals and stick to them. In other words, do not get greedy. It is usually the first trade after you have met your goals that takes all your profit back.
7) Take advantage of simulated trading. Most brokers will give you a free simulated account. Never trade cash money with any strategy until you are comfortable that you can consistently be profitable. For some that day may never come, but I would recommend at least 2 - 4 weeks.
8) Always use a stop loss. This has been said over and over again but it is the truth. More importantly, never move your stop loss farther away from your entry price or cancel it all together.
9) Become an expert at exiting and managing a trade. The entry of a trade is really not that important. Successful traders make a living on letting profits run and keeping losses small. Most everyone can make money when a trade goes exactly as planned. But how are you going to react if the trade does not go as planned? There is truly an art to this and it takes years of practice to become good at it.
10) Have fun! I know a lot of traders who are mad when they lose and mad when they win. If you are not having fun in your chosen profession, then make a change. The emotions of being a day trader are off the charts so you must enjoy what you are doing or you will be miserable.
I might also check out my lens on sguidoo at http://www.squidoo.com/livedaytradingroom
Alan
http://www.livedaytradingroom.com
1) Invest in yourself. I did not - at first. I tried to be hard headed about learning to trade on my own - some of that was just being cheap. After much trial and error trading, I had lost a bundle. Seeking the advice of a seasoned trader will help you cut down the learning curve and protect your account. Invest in your education just like you did by going to college, a trade school, etc.
2) Treat Day Trading like a business instead of a hobby. This one is closely related to the tip above. If you expect Day Trading to eventually pay your bills, how do you expect to accomplish this is you don not put in full time hours? If you treat it like a hobby, then that is all it will ever be - a very expensive one at that.
3) Trade only with RISK CAPITAL - money you can afford to lose. If you are opening an account with next month's mortgage payment then you do not understand this concept. This is called trading with "scared" money. If you do not have at least $5000 of risk capital then I recommend saving up until that is possible.
4) Trade the appropriate amount of contracts for your account size. This can vary depending on your trading strategy but never put your entire account at risk. Trading too many contracts on too small of an account is a recipe for disaster.
5) Do not guess which way the market is going. The market is going to do whatever it wants to do. You can not stop it. Watch and react to your setups.
6) Set daily and/or weekly profit goals and stick to them. In other words, do not get greedy. It is usually the first trade after you have met your goals that takes all your profit back.
7) Take advantage of simulated trading. Most brokers will give you a free simulated account. Never trade cash money with any strategy until you are comfortable that you can consistently be profitable. For some that day may never come, but I would recommend at least 2 - 4 weeks.
8) Always use a stop loss. This has been said over and over again but it is the truth. More importantly, never move your stop loss farther away from your entry price or cancel it all together.
9) Become an expert at exiting and managing a trade. The entry of a trade is really not that important. Successful traders make a living on letting profits run and keeping losses small. Most everyone can make money when a trade goes exactly as planned. But how are you going to react if the trade does not go as planned? There is truly an art to this and it takes years of practice to become good at it.
10) Have fun! I know a lot of traders who are mad when they lose and mad when they win. If you are not having fun in your chosen profession, then make a change. The emotions of being a day trader are off the charts so you must enjoy what you are doing or you will be miserable.
I might also check out my lens on sguidoo at http://www.squidoo.com/livedaytradingroom
Alan
http://www.livedaytradingroom.com
Summer Volume
I'm starting to see some movement in the S&P e-Mini that makes me think the summer volume is setting in. Nothing special just noticing the wicks on the candles are getting longer and movement is less predictable. This is normal especially in August as most traders are taking off to spend time with family before the kids go back to school. Volume should return to normal shortly after Labor Day. If you have the luxury, it wouldn't be a bad idea to just take off till then but if you must trade do it with extreme caution.
Alan
LiveDayTradingRoom.com
Alan
LiveDayTradingRoom.com
Monday, July 6, 2009
Monday Morning
I noticed something interesting on the S&P this morning. We may be looking at a break of a head and shoulders formation. Guess you could say we've already broke it depending on how you look at it. There is very good support around 877 area. If we break this, wouldn't surprise me to see the S&P in the 700's again.
Alan
www.livedaytradingroom.com
Alan
www.livedaytradingroom.com
Thursday, July 2, 2009
Vacation
Well that's it for me till Monday. Made a little money this week nothing major. My head wasn't really in the game for some reason this week and I actually missed a few good setups. Have a great 4th.
Alan
www.livedaytradingroom.com
Alan
www.livedaytradingroom.com
Monday, June 29, 2009
Is the 4th here already? Its only Monday!
Looks like a lot of the traders are taking the week off with the 4th coming up this weekend. Anytime there is low volume you must trade with extreme caution and not trade at all if you have the self-control - I don't so you know I will be watching. I won't be trading at all after the Wednesday morning session.
Alan
www.livedaytradingroom.com
Alan
www.livedaytradingroom.com
Monday, May 18, 2009
Monday
Very slow day at least it seems. Didn't feel like the S&P ended the day up 25 pts. Might be a sign of things to come this week with the Memorial Day weekend approaching.
Alan
www.livedaytradingroom.com
Alan
www.livedaytradingroom.com
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