Why do Traders Never Learn?
I know someone who is now on his 12th day trading course and insists that this method of trading will make him profits – he just has to find the right training! I have explained why day trading doesn't give you an edge for profits elsewhere on this site and have explained it to him but he won't listen to me.
The Flawed Logic of Trading Short Term Time Frames
Day trading and scalping strategies are so short term and trying to trade for such small profits with stops which are so close, it should be obvious by just looking at the average trading range in a day (in any currency pair) that volatility is of a random nature and there is no way to get an edge. If you don't believe me, just check the trading ranges and try to scalp some pips ( in real time not a demo account) and you will lose your money - so why are Forex scalping and day trading courses so popular?
Public Perception and the Day Trading Myth
The inexperienced trader, gets his knowledge from TV and when he sees the financial news reported on the TV, he sees traders sitting in dealing rooms glued to screens watching every twist and turn of the market. These traders are surrounded by banks of computer screens and the naïve trader thinks this is what you have to do to make profits – use computers and day trade the markets. He also reads in awe, about banks using complex computer technology, to trade billions of dollars in and out the market quickly and thinks a set programmed day trading signal is the way to make money.
We have noted elsewhere on this site, that brokers promote day trading as a great way to trade as there making a big commission turnover from it and that - any High Frequency Trading or scalping system obviously don't work. All you have to do to prove this is look at Hedge Fund and managed fund performance and you will see how little they make. Also the fact that you see brokers in a dealing room all day, doesn't mean their all day trading! Many are just servicing clients, checking exposure or providing news.
Marketing Companies Lock into the Public Perception of Trading Success
I see a huge amount of day trading courses and very few if any are written by traders – there put together by marketing corporations. They take the public misconception of how they think a pro trader makes money and package it for him. They also appeal to good old fashioned greed! They know, there are always a huge amount of people, who want instant riches easily so they give it to them. Here are some typical marketing ploys the companies use to sell courses:
- They have discovered a secret code which works all the time to make profits with little or no risk.
- The strategies taught can make a certain number of pips in a day, week or month so you enjoy a regular income.
- No thinking is involved all you so is follow set rules to generate a trading signal for huge profits.
- You will see very little draw down if any on any of the courses strategies.
- There doing you a favour by selling you the course and letting you in on this insider info.
- You get live proof which is not real at all and just done in hindsight.
- You get that only so many copies can be realized in case to many people using the method makes it ineffective.
- The trader is always a trader who is supposed to be world famous but you will never find any information on him apart from on affiliate sites where the system is being sold but not on any major finance or news site.
The above is fairly typical of most day trading courses – you normally just get some formations which are supposed to work and don't Other courses are more in depth and provide some solid techniques which would work in a higher time frame but fail in short term trading, due to random standard deviation of price.
Courses in Day Trading – Avoid them All
Day trading courses are presented as the road to riches but are the road to ruin for anyone who buys them, as they face numerous losing trades which whittle away their account equity and the odd profit which is so small, it fails to halt the inevitable account wipe out.
Most beginner traders buy more than one day trading course and think there is one which makes money but the search is fruitless so don't even buy one – see the best day trading courses for what they are – courses promoted on unsound logic and greed sure, they make the vendors huge profits but not the trader using the trading strategy.