Trading Loonies and trading rooms

Recently, the guys who run a popular WordPress blog dedicated to exposing loonies of the trading world, called simply Trading Loonies, have asked me a question over Twitter; see the embedded tweet with my reply below and the link to the Trading Loonies question here.

The question had to do with trading rooms of which I have written here before and even more than once.

I am skeptical of such rooms, as I said before, and I don't want to repeat myself here, but would like to elaborate a bit on my Twitter reply to Trading Loonies.

The reason why my trading methods would not work particularly well for most people in the room is that they aim at capturing quick profits. Moreover, I can enter a trade at any moment, at a moment's notice. What that means is that I would not be able to issue calls that others would benefit from as some of my trades on a good volatile day do not last even a minute. Add to this the fact that volatility is going to spread the entry price over a few ticks at least, and you can easily understand why some room members might end up being unhappy.

Most day trading rooms out there tailor their methods to the room members, trying to ensure that they are likely to capture some profits or at least have fun taking some trades. The problem with this approach is that it is really like putting that famous horse before his famous cart. Your focus should be on making money and not on making sure that others are able to make money.

The net result often is that the only people making money present in the room are the rooms operators and it is through subscriptions. Hardly a good deal for anybody else, if you ask me.

There is nothing wrong with such rooms if they are educational in nature. But most of them actually act as if they can make you money and charge for their services accordingly. An educational trading room should never be charging more than $100-150 per month, yet I have yet to come across such a trading room when it comes to day trading e-mini futures, my area of expertise. Most charge about $250-300 a month and you will be hard pressed to find a semblance of a comprehensive track record well-supported with evidence of trades taken, which is an obvious indication that the room performance is hardly a thing to brag about.

There is one kind of a trading room that I would consider running in future, but I am afraid that it would not be particularly popular. That's because it would generate no more than 15 or so calls a week, and the public wants more. If you consider that I can take that many or more trades on a good volatile day (not even trading a full day), that is a bit of a losing proposition to me, and so I may only consider such a room when I am basically retired from trading. That still may be good for those who would like to make a bit of money on solid calls, but the public tends to shun such trading rooms seeking more thrill and bigger profits usually ending up with more thrill than they bargained for and depleted accounts to boot.

The main moral from all this is that there is really no white knight out there if you want to make a living as a day trader. Or, a trader, in general.

Again, not that I am saying it the very first time on this site. In fact, this site educational philosophy is to encourage you to think for yourself to develop your trading skills while perhaps using my trading methods that work well for me, with plenty of evidence to buttress this statement, but also, and more importantly, for my clients, as evidenced by some testimonials.

Your best bet at making money trading is really simply by learning how to do so. Yes, this may take a while, but this somewhat annoying thing is hardly limited to trading.

In general, if you want to be successful at something you have to be the most important factor to make this happen. If you are not, someone else is probably taking advantage of you.

This may sound cynical, but I am afraid it is true most of the time especially when it comes to trading or else the Trading Loonies blog would not be as popular and as highly acclaimed as it is.

Posted on May 30th, 2016.