Trading rooms, Gurus, and scams

Fellow traders,

 

Many of you are seeking ways to become profitable or wishing to follow Saint elgaza to the trading promised land. Let me tell you from my 20 years experience the overriding majority of trading rooms and their gurus are a complete waste of your time and money, because (1) They don't show their DOMs, (2) They don't call trades in advance, (3) They take trades you don't understand, (4) They take risks you can't afford, and (5) They won't provide legitimate and verifiable track records.

 

Having said that, Dean Handley (who is now a vendor himself) has done a very extensive study of trading rooms and has identified some of the good ones to consider and bad ones to avoid based on solid criteria. I suggest you read ALL of his articles, many of which are published in the well respected Futures Truth before committing your time and money to others.

 

Best of luck in your trading endeavors.

 

http://www.tesseracttrading.com/#!who/c4nz

Edited April 2, 2014 by yamantaka

Yamantaka,

 

Great post!

 

Initially I posted this on the other thread but I think here, in your thread seems to be more appropriate. Less controversial at least.

 

After some reading on the other thread last night, I have posted a cautionary tale I have written and shared by email with a fellow trader a while back, circa 2005. Since we're dealing with credibility issues, here's snapshot:

 

http://www.use.com/4c588df1304a9977dd5c

 

This is not a jab to nobody in particular or to any of his followers but what I think is a reality in our industry.

 

I'm inviting everybody to read it, especially those whom have less than a year on this business. Just food for thought.

 

http://indo-investasi.com/showthread.php/24215-The-Trading-Guru-Method-5-000-a-Month-Guarantee!?p=322683#post322683

what yamataka said above is absolutely correct and cant be further from the truth. Ask the gurus to show his DOM and trade executions live to make sur he/she is a real profitable trader,not a liar and scammer !!!

A must read:

 

http://www.jigsawtrading.com/downloads/SurvivingDayTrading.pdf

Best warning sign of a fake system is someone getting an 80%+ win rate with high win to loss ratios. Those two stats have an INVERSE RELATIONSHIP. It doesn't matter whether you're using a mechanical or discretionary system.

 

You have no chance to average making twice as much as you lose in the longer term as your winning percentage rises above 50%. NO CHANCE. This is how new traders get blown away by the markets. They have unrealistic expectations of what's required to risk given their odds of winning. They emotionally cannot tolerate 40/60 or 50/50 positive expectancy systems because of the streaks of losers they must get past.

 

Anyone can make a 50/50 system look much better on strong trend days or range days, depending upon when the system excels.

 

I don't have many posts on this board. I have one where I outline what you can expect from your win/loss ratio vs winning pct for a positive expectancy system. I learned all of that the hard way, like it always seems to happen with me.

 

The best advice I can give NEW (< 5 yrs full-time) traders is:

 

1. Stay away from high winning pct systems. They take great precision to execute and are very sensitive to the level of your instrument's volatility. If the winning pct drops below 75% longer term, you're absolute toast. Your best chance of survival is finding a near 50/50 system which can net you 1.5 to 1.7 times what your avg losing trade is.

 

2. NEVER add to a losing position and NEVER take contracts off as the trade goes your way. You either go all-in / all-out or add to winners (and finally go all-out). When you take off contracts as the trade goes your way, you're reverse position sizing and, again, that requires higher winning pcts long-term because you're holding your largest leverage every time at the beginning of each trade you take (BAD, unless you go all-in/all-out).

Edited April 3, 2014 by lbf4223