Someone that runs a trading room posted these tips on what to look for in a trading room. I thought some of the advice was helpful and might be useful to some of you out there.
What You Can Expect in a Trading Room
Live trading rooms are online chat sessions where a professional day trader (moderator) calls technical setups/trades and helps participants see the markets. In these rooms, both novice and seasoned traders watch the moderatorís charts, ask questions about trade setups and using the platform, and trade themselves -- either with real money or in simulation mode.
In a good trading room, the professional moderator does not encourage the participants to enter on just what he is doing, but explains what a trade setup looks like and why some particular trading action appears to be a setup worth watching. The participants should be able to make their own decisions based upon the direction being offered.
Trading rooms offer many benefits to both novice and seasoned day traders alike.
The novice trader can begin to see chart setups, learn a new trading system and feel more comfortable knowing that the moderator is sitting right there, available for help. They wonít feel all alone in the world, trading blindly.
The seasoned traders also benefit because they now have four eyes looking at the same charts instead of two. The moderator may see a setup, or see why certain activity is not a setup and therefore not advisable to enter. Even seasoned veterans appreciate the extra set of eyes before taking a trade.
Understand Ö day trading can be an extremely lonely profession, with no one to talk to but the computer monitor, the dog or the cat. Being ďwithĒ other traders can have a positive impact on your mood as well as your trades.
Which Type of Trading Room is Right for You?
There are several types of trading rooms available on the market.
Some trading rooms are for teaching only, where a professional trader demonstrates how to use the trading system in which they are experienced. This can be extremely helpful to new traders who just bought the software and are not sure how to use all of its features.
Other trading rooms have the moderator actually calling trades. This type of arrangement is a bit dicey. If the moderator is not a licensed broker and calls trades, and the participant enters the trade and loses, the moderator is not liable in any way for the participantís loss.
Trading rooms where the moderator simply calls trades without explanation have limited value in the long run. When the moderator isnít there that day for whatever reason, the participant is not able to trade that day. Itís better to have a trading room where there is information transfer so the participant can ultimately become independent.
Another trading room that, over time, is probably the best is the room in which the moderator does not actually call trades. Instead, the moderator calls setups, at the same time explaining why it is a viable setup, and then leaves it up to the participantís discretion whether to take the trade or not. The effectiveness of this type of room, especially for a novice trader, is that they will learn to see the setups for themselves and take responsibility for the trading they do. If there is a loss, they wonít blame the moderator.
Things to Think About When Choosing a Trading Room
Regardless of the style of the room, most trading rooms are oriented toward a specific trading system with certain trading strategies. Some rooms offer free trials; others do not. Generally, the free trials to the rooms are not worth much. Because the room is tailored to a specific trading system and trading strategies, without prior knowledge of the system, your understanding of what is taking place is limited.
Probably the worst arrangement for trading rooms is where there is just chatting back and forth between participants. It is difficult to learn anything in a room like that, without a moderator. It is kind of like a free-for-all, where you trade at your own risk. This arrangement is not much more than background noise.
As far as audio / video, some trade rooms are all audio (Voice over IP), with chatting back and forth between the pro moderator and the participants, or just the moderator alone. Other rooms offer audio from the moderator and texting from the participants.
In some rooms, texting can be open to all the participants and the moderator. In other rooms, texting is limited to each participant communicating directly with the moderator and then the moderator reading the message and answering aloud or texting back to the participant alone, depending upon the nature of the question.
Some chatrooms offer both audio and video, where the participants can hear the moderator and see the moderatorís charts. This is good and bad. It is good in the sense that the moderator can have more charts up than the participant, and cover more markets. It is bad if the participant decides to rely on the moderatorís charts and the moderatorís Internet connection goes down.
Youíll also want to decide the kind of market you want to trade. There are rooms for trading stocks, futures, E-Mini futures, commodities, technical analysis strategies, fundamental analysis strategies, and so on.
It is advisable when deciding to use a trading room that you figure out what you want the room to do for you. Do you want to see the moderatorís charts? Do you want the moderator to call trades for you? Do you want to become an independent trader? Once you make that decision, finding the proper trading room is a much easier task.
The following 3 users say Thank You to shodson for this post:
I know what your saying and would agree to some extent but, for a person that doesn't know what he/she is doing it is not a distraction. Guys like me and I guess you can definitely get distracted. We have our own "thing" and listening to other people usually results in losing money. I have in the past have visited some of those rooms to just see what others do. A few times I would pick up on something that would be of use to me so I wouldn't really badmouth these guys for being a distraction entirely. All that being said I think his advice is sound about chat/trading rooms
I tested out that room this morning. I had never heard of it before.
What a DISASTER, the guy ripped up cash on every trade. To make matters worse, he made some comment about todays loss wiped out his monthy gains. He has no money management skills. It has to be one of the worst rooms I have ever seen.
I feel sorry for the sucker at the end who tried to sell the service. He even went on to say that the main guy (who ripped up all the cash) was one of the best traders in the WORLD.
If not, please find the appropriate thread and post the review there.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
If you want to support our community, become an Elite Member.
The following user says Thank You to Big Mike for this post: