Archives for September 2018

Huge Mistakes Made When Choosing a Day Trading System | Part 6.5

September 26, 2018 by tradersolution

Poor Relationship with Day Trading Brokers

Obvious Facts About Day Trading Brokers

This may sound obvious, but when a trader doesn’t trade, they don’t make any money. What you may not think about is the fact that their broker doesn’t make any money, either.

The best, most successful trading systems are usually accompanied with an incredible relationship with a broker. These relationships are key indicators of how successful a system can be.

If the relationship is strong, it usually means the broker is happy. If the broker is happy, it usually means the trader is making profitable trades, putting money in the broker’s pocket.

While the above scenario is true in most cases, there are still brokers who will want a relationship with traders regardless of how many trades they make. They’ll even go as far as making sure to portray inactive traders in a positive light and offer low rates in an attempt to gain client referrals.

What To Look For in Day Trading Brokers

When researching a system, there are specific things to look for to determine credibility.

For instance, some educators make more money charging you as an Introducing Broker as opposed to monthly fees. Most brokers set aside a certain amount of money for these Introducing Brokers, who in turn, are registered to profit from client referrals.

The biggest problem with this scenario is that many of these educators have relationships with brokers who pay the most for referrals, instead of brokers who will best meet the needs of clients.

Experience in this area has shown it can be a double-edged sword. One way to recognize an Introducing Broker system is to determine how conservative they are in their marketing. Everything these individuals do is monitored and regulated, so the more conservative, the more likely.

In contrast, educators who aren’t Introducing Brokers will usually identify the best places to trade because they have no incentive to lead you elsewhere.

Additional Overlooked Factors When Choosing Day Trading Brokers

Books, videos and seminars which offer full courses on trading tips and techniques are a very common education tools. Unfortunately, a lot of these resources fail to reference the steps necessary for setting up a broker account.

Additionally, it may surprise you that even some of the largest trading platforms on the planet don’t offer phone or email support.

If you’re researching a system and the educator doesn’t provide videos, ongoing support or live help in regards to setting up a broker account, the education likely won’t translate into actual trading.

That being said, the industry as a whole is getting better in this regard. Most online brokers now offer support options, but even these don’t typically cover all the bases. Before making any type of payment, make sure you’re getting more than just a generic education.

Day Trading Brokers on Taxes, Retirement Planning and Interest

You may find it difficult to locate any type of information on taxes, retirement planning and interest in day trading.

Taxes are a big part of trading. Tax implications can be significant for trader, depending on how their account was set up of course.

To combat this, many traders set up corporations to trade with. This may or may not be the right step for you. As you’re choosing a system, make sure you have information to help you navigate this.

Retirement planning goes hand-in-hand with taxes. There are a lot of ways to integrate your account with Traditional IRAs, ROTH IRAs and other tax beneficial strategic investments.

Brokers work with their type of accounts, but often neglect to mention this integration capability.

Be aware that most of these accounts require higher minimum balances to start.

Find Day Trading Brokers Through DayTradeFEED.com!

This article is only part 6.5 in a series aimed at helping day traders understand what mistakes to avoid.

First Mistake: No Ongoing Support/Education

Second Mistake: No Specific Way To Replicate Results

Third Mistake: Repeating Key Entry and Exit Strategies

Fourth Mistake: Paying for Trading Seminars, Books & Videos

Fifth Mistake: Make Money Day Trading (System Not Compatible)

Sixth Mistake: Pitches that Win Now, Lose Overall

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Huge Mistakes Made When Choosing a Day Trading System | Part Six

September 13, 2018 by tradersolution

Day Trading Education – Pitches that Win Now, Lose Overall

After a number of years in the trading industry, it’s difficult to avoid criticizing every little detail of various education systems. At a certain point, it seems as though you’ve heard it all in regards to companies selling their systems (and the questions that come from potential customers of said systems).

You even begin to see an almost political sense of loyalty begin to form between traders and THEIR system. Rarely does a trader admit, openly, to the flawed practices which they adopted at one point or another.

I recently heard a pitch so convincing that the educator didn’t even really sell an actual product. His system consisted of making live trades and explaining why certain decisions were being made and why.

Most “educators” who follow this model have 12-20 years of experience in trading and, as mentioned previously, cannot actually replicate their system because it made up mostly by personality traits instead of technical coding.

Day Trading Education – Buzzword: “Accuracy”

“Over 75 percent accuracy,” the salesman says. Your eyes light up as you wonder whether or not he’s telling the truth. Surprisingly, the answer is most likely yes.

But beware of the word “accuracy,” which will always be used as a tool in selling a system because of its ability to be manipulated.

For example, you may find systems that are only actually accurate 15 out of every 100 trades. These systems still claim higher percentages because their trade structure outweighs the 85 losing trades with the 15 winning trades.

The opposite can also be true. A system can be successful on 95 out of every 100 trades, but still lose money overall because the trade structure outweighs the 95 wins with the five losses.

After hearing the word “accuracy,” the best practice is to always make sure to see what the actual overall profit/loss is.

Day Trading Education – Buzzword: “Guarantee”

Another buzzword traders often hear as they research trading systems is “guarantee.” This is obviously in regards to pricing or satisfaction quality, as it is neither legal or ethical to make future guarantees on profits.

Again (just to be clear),there is only one type of establishment which can promise specific returns: federally regulated banks. Not one mutual fund, 401k, stock or trading account in existence can guarantee future profits.

Day Trading Education – The Total Rip Off

Occasionally a potential trader can come across a trading and education system that is a total and complete rip off. While this becomes more and more rare as time passes, it’s still a possibility.

In most cases, these systems promise huge profits on little effort from the trader. Money is exchanged, likely never to even be invested.

There are certain safeguards which are continually being put into place to help guard against this type of fraud, including federal laws requiring risk disclaimers on all trading websites and online entities. However, it’s still important to keep this in mind when searching for your system.

Day Trading Education – Beware of Salesperson

“Even a monkey could trade this,” is something a presenter might say while showing you a trade system demonstration. This may sound like they are trying to convince you, but in a sense, they could be right.

A study was conducted years ago involving a human and a monkey. Both sat in front of a computer and asked to trade for a specific duration of time. By the end of the experiment, the monkey had made more money than the human.

Obviously, results from the case above are rare, and should be taken lightly due to it being a single instance of the experiment. If it were run 1000 times, results would surely differ.

The main takeaway here is that education salespeople will do anything to make trading look easy, which the reality is that it simply is not. In certain cases, new traders can remain profitable for a short period of time, but that doesn’t mean their strategy is perfect.

A good thing to remember for new traders is to practice trade execution for a minimum of one month prior to increasing leverage and trading substantial funds.

Conclusion: Day Trading Education

In conclusion, day trading education is not something to take lightly. While many people learn and make a living day trading, others make their living by selling faulty and outdated education products. Here at Day Trade FEED, we’re doing our best to make sure everyone who is interested can learn to day trade without navigating all the tricks of the sales trade.

When choosing a day trading system, make sure to use the product as much as possible before paying for it. Do this by using free demonstrations, trial periods and other forms of test drives.

Remember, if an education system doesn’t allow you to try before investing, it may not be worth your time.

Trading is something that is difficult enough without trading platforms and software companies misleading you.

Find Day Trading Education Through DayTradeFEED.com!

This article is only part six in a series aimed at helping day traders understand what mistakes to avoid.

First Mistake: No Ongoing Support/Education

Second Mistake: No Specific Way To Replicate Results

Third Mistake: Repeating Key Entry and Exit Strategies

Fourth Mistake: Paying for Trading Seminars, Books & Videos

Fifth Mistake: Make Money Day Trading (System Not Compatible)

Subscribe below to be notified of future editions.

Huge Mistakes Made When Choosing a Day Trading System | Part Five

September 6, 2018 by tradersolution

Mistake: Make Money Day Trading (System Not Compatible)

Make money day trading. Don’t kill profitability with a lack of funds.

Two things that have nothing to do with a trading system itself can affect trading in a significant way:

Liquidity
Market Being Traded

Some systems claim to see the same results regardless of liquidity or which market is being traded, but the only way for this to be true is for the trader to have a significant account funded from the beginning.

The truth is that profits are capped by these two principles in every market. On one hand, Forex market caps are traded in billions of dollars. In contrast, traders being capping out at around $5,000 in futures markets.

How to make money day trading, even with Forex caps.

Around $3 trillion is exchanged in Forex markets on a daily basis. Because of this, many traders will never have to worry about caps in terms of profitability. However, minimums balances do still exist, albeit usually at a relatively low rate.

Many brokers offer what is called a “micro account.” These allow traders to open a trading account for as little as five dollars. These offers usually charge more in spreads, but make trading available to just about anybody.

Typically, brokers prefer a normal account to start around $500. These accounts offer lower pip spreads, but keep in mind that profits are taken at the beginning by setting you however many pips behind your entry to pay the spread difference.

How to make money day trading, even with Futures caps.

The Futures market isn’t for everyone due to a required minimum standard balance set by the Commodity Futures Trading Commission (CFTC).

First, it’s important to remember that most brokers will not allow you to open an account with less than $5,000. In addition, contract margins can vary from $500 to $6,000 per contract traded. These parameters are set to prevent losses that traders aren’t able to cover.

The Futures market is also a little more unreliable in terms of liquidity. Take the S&P 500 vs. Silver Futures for example. The S&P involves many more traders, which means there is more opportunity in the market to make profits without “slippage.”

“Slippage” is defined as a change in price which occurs due to a lack of participant reaction instead of an abundance of it. When these markets slip and there isn’t enough traders participating, your trade must wait until the prices moves far enough to pull you out completely.

In turn, this can result in huge losses and/or little profit.

Conclusion: how to make money day trading.

In conclusion, while Futures markets remain a great place to trade, please make sure you have the correct knowledge and experience to correctly navigate the practice. A good place to start is to make sure you know about specific trade times and overnight margin requirements.

The best type of educator of trading system will already have direction on which market fits your individual financial situation and the leverage at which you should be trading.

How to make money day trading with DayTradeFEED.com!

This article is only part five in a series aimed at helping day traders understand what mistakes to avoid.