Up $1240 (sim) over the past ten weeks in this trade room, should I join?

[wrbtrader]

Stewie,

Iwilldoit said the moderators doesn't take all the trades. Another way to look at it...there are some trades not taken after a trade signal has been called.

In my opinion...that's not a "huge red flag". The reason is because its not an automated trading system. Simply, its discretionary. Therefore, it would seem strange or questionable if the moderators took every trade signal because that's not possible. Reality is this...everybody has to take a break, every body needs to eat during the day, every body needs to go to the toilet, moderators will have distractions such as answering questions, providing education, every body has broker platform problems once in awhile and so on...doing any of those things will make it very difficult to take every trade.

In fact, I remember one particular signal calling room (European) in which the moderators used a broker out of Europe and some of their clients used the same broker. One day the entire broker system went down for several hours due to some glitch. Yet, the signal caller continue giving trade signals and stating he took the trades until one of the member notified him that the broker has been down for 3 hours.

Nothing but silence for about an hour from the moderator and he then stated the trades during the glitch period was "paper trades"...it was the first time he admitted he was paper trading.

That's my point...someone that takes every trade...every trading day without ever having any problems...that's a huge red flag.

It's that reason alone why there should be two separate performance records. One record that represents every trade signal that was called and the other performance record that shows the actual trading records by the moderators (simulator or real money). This will give a more realistic performance versus the trade signal performance. Also, if possible, broker statements of a few members that took the signal calls should be uploaded on a daily basis...I've only heard of one signal calling room doing such and it was out of Asia for Hang Seng HSI trading. There was a huge difference in the performance of the trade signals called, performance record of the moderators and performance records of the paying clients...scary difference and it has a lot to do with the human brain reaction speed as described further below.

By the way, you're absolutely correct when you questioned Iwilldoit simulator profits of his own doing versus them telling him specifically what to do. In my opinion, unless the trade signal is being called in advance before the price reaches the trade signal price...there will always be a delay of several seconds between the moderator posting the trade versus when the chat room member seeing the trade and then reacting to what they saw on their screen and then executing their trade entry.

I've read that whole process can take 5 seconds - 8 seconds to complete. That may not seem like a long time but its long enough for the obvious conclusion...the trader will not get the same fills or the trader will not have his order filled because the price is too far away.

That's not the fault of the moderator but a scientific truth about the time elapse for the human brain to read something on a computer or digital device, process the info (decision making) and then have a cognitive reaction (trade execution). Yet, if audio, it takes 4 seconds - 7 seconds.

Note: There are different research out there that shows 1 - 2 seconds difference between each research.

Its the above reasons why there's a high turnover in signal calling chat rooms. It takes a few months for traders to realize its extremely difficult to get the same fills, extremely difficult to take every trade (including trades by the signal caller) and very difficult to to know a true performance of the trade signals being called unless its all called in advance.

 

[Stewie]

Nothing but silence for about an hour from the moderator and he then stated the trades during the glitch period was "paper trades"...it was the first time he admitted he was paper trading.

This is priceless... what a story!

In my opinion...that's not a "huge red flag".

I guess for me then, its a matter of definition. I know you're the king of getting down to the nitty gritty and being meticulous with your definitions (I saw this in your definition of scalping a while back). But for me, I guess I think of "trade signal" to be a signal to enter a trade. Of course I will be the first to admit that there can be a million reasons for why a trade isn't taken, and I do believe that ultimately, the discretionary traders make money not by following their "trading plan", but by knowing, through sheer experience, when to skip trades, when to get in early, perhaps even when to chase ever so slightly. I say this because once again, if there is a trade signal and its skipped, which you say is ok, then this means a trading plan isn't being followed. Maybe if the whole phrase was changed it would be different.

When I think of the phrase "trade signal" in the context of a paid chatroom, I think its simply something that will be used later to the guys advantage, as in, when the trade worked, it will be "why didn't you take the trade signal", and if it didn't work, the "trade signal" won't be brought up. LOL

Yet, if audio, it takes 4 seconds - 7 seconds.

I do agree that audio makes this much better, but of course you couldn't have 30 members in a room, unless its simply that only the teacher would speak, and all others had to type. I thought of this also in your past fine discussions about mentors. If the most ideal situation cannot be realized, which is you sitting beside the guy trading a shit load of contracts who allows you to ask him whatever you want as you fully see what he is doing, then seeing his screen live over skype with a 2 way audio feed so your hands are free and eyes can be on your own chart without having to read what he is typing can be a fairly good substitute. Those extra seconds really do add up.

 

[Iwilldoit]

I really appreciate the posts you and @wrbtrader made.

LOL.. this really makes me laugh. A guy who is supposedly good enough to teach but doesn't take a trade because he is conservative? What does this even mean? The trade either sets up or it doesn't. If it doesn't set up, why not? Maybe the volume isn't right, or the pace isn't right, or it didn't get close enough to a level he is watching to get in at a good price where the risk is within his limits, but the excuse given is pretty crappy. Huge red flag.

Well I sorta understand what he means. See some setups are a lot higher probability than others depending on the market (and on correlations ).

What I mean by this was if you were taking the trade cause you saw it, or if you took the trade cause you were told to. Simply put, if the so called "teacher's" in the room went silent for a while, would you still have taken the trade or not? I'm just trying to figure out how much of this SIM profit is your doing vs. their doing.

I tend to be a bit more aggressive than the mod, I take the trade when a visual indicator on his chart suggests to go long or short.

Sometimes me and the mod make the same trade (yes not always at the same fills) but a lot of the times I take the trade and he misses it b/c volume is too thin, or the risk/reward ratio is too low.

@Stewie

 

[Iwilldoit]

Stewie,

Reality is this...everybody has to take a break, every body needs to eat during the day, every body needs to go to the toilet, moderators will have distractions such as answering questions, providing education, every body has broker platform problems once in awhile and so on...doing any of those things will make it very difficult to take every trade.

Exactly. The mod is quite busy answering questions ( a lot of the time mine lol ) that he misses setups, and even asks us to help remind him of setups.

Or he may be focussing on a setup on one instrument, to such an extent, that he is completely unaware of a setup on another instrument.


Bottom line, this industry is too unregulated (too dirty). Any clown off the street can become a "vendor".

I think the NFA should provide certain vendors with a designation once they have been audited.

@Stewie @wrbtrader @Handle123

 

[wrbtrader]

Exactly. The mod is quite busy answering questions ( a lot of the time mine lol ) that he misses setups, and even asks us to help remind him of setups.

Or he may be focussing on a setup on one instrument, to such an extent, that he is completely unaware of a setup on another instrument.


Bottom line, this industry is too unregulated (too dirty). Any clown off the street can become a "vendor".

I think the NFA should provide certain vendors with a designation once they have been audited.

@Stewie @wrbtrader @Handle123

Yeah, that's tough to do if its a signal calling chat room where they are calling trade signals on multiple instruments unless they're using an automated system or mechanical alert system.

Agree, the trading industry is unregulated but it involves everyone. Seriously, like you said, anyone can be a vendor when they shouldn't be one. Just the same, anyone can open a trading account with just an ID and money when there should be some qualifications involved such as an knowledge exam and/or psychological evaluation tests.

Serious, someone here at ET recently said he open a trading account and wanted to trade the Emini ES futures. A week later he's asking what's the CME and what strategy works. Then a week after that he's trading.

Thus, its not a problem about vendors...its a problem with traders as a whole that start at the bottom and all of it needs to be more regulated because too many traders get involved in trading when they don't even understand the basics. I think its the primary reason why there's such a high failure rate among retail traders.

Its like being allowed in a candy store and the kid is told he/she needs to wait, learn, study the candy before he can buy anything to eat. Most can't wait and they will buy very quickly to satisfy that psychological urge.

There's actually numerous psychological researchs involving children and adults when they are put into an irresistible situation with the reward in front of them (e.g. they're sitting at a desk and the reward is at the other end of the desk) and told that if they wait a certain time period...they get the reward. The person that told them that...he/she then leaves the room...leaving just the person being tested all alone in the room with the reward. The reward is something very simple and easily available so that if they don't wait the designated time period...its not a big deal. That's the sneaky part of the psychological test...its not a big deal.

Only a very low percentage were able to wait without any noticeable changes in their behavior during the waiting period but the percentage was higher for adults than children. Simply, as every second, every minute went ticked away on the clock...that simple reward became more important (psychologically the importance changed as time passed by) and eventually it became so very important. So important, that there were physical changes in the participants (e.g. increased heart rate), brain activities changed and the biggest change was eye contact with the reward in comparison to eye contact to other objects in the room.

Simply, it all had an impact on the decisions we make involving stress situations where we know if we do things right...there's a reward. Impact in such a way that the human brain will often make the wrong decision.

Note: This is borderline behavior finance stuff.

If you think the above is ridiculous...go talk to the HR department of some of the worlds biggest institutional trading firms. You'll discover that before they offer you a trading position...you need to take a psychological evaluation test and most firms has a staff psychologist. In other words, they want to know if you're fit for the job prior to trading with millions of their dollars.

Now compare that to the barrier for the typical retail traders...ID and 5k to 10k.

 

[wartrace]

I find it odd that you will not reveal the name of the trading room.

 

[Stewie]

I tend to be a bit more aggressive than the mod, I take the trade when a visual indicator on his chart suggests to go long or short.

Sometimes me and the mod make the same trade (yes not always at the same fills) but a lot of the times I take the trade and he misses it b/c volume is too thin, or the risk/reward ratio is too low.

I find it interesting that you say you are more aggressive. One would assume the mod to be much more experienced than you. Therefore, I would assume that in the long run, your aggressiveness could actually be detrimental. Volume and risk:reward ratios might be good reasons to skip trades, but either the mod is being too conservative, or you are being too aggressive.

This to me also shows a conflict of interest. The mod is perhaps a bit too scared to get it wrong. He perhaps want to ensure a higher win rate so as to look good in the trading room, but this might in fact be detrimental to overall profit. If he doesn't care as much about trading profit, it shows me that the profits from the room and those indicators is much more lucrative. Now tell me, do you want to learn from a guy who is in the business of trading, or who is in the business of teaching to "somewhat" trade?

Also, the fact that you guys are watching several instruments is perhaps going to set you back. Each instrument has its own mood if you will. You might try the same setup on a few instruments and get totally different results, and of course apart from the fact that you never know the outcome of the next trade, you might also wrongly conclude that there might be something wrong with a particular setup, when in fact the problem is that different traders behave differently who trade these different instruments. If you have to sit through 15 minutes of crap with nothing to do, as opposed to scanning other stuff, and perhaps even missing a great opportunity in the first instrument, learn to be patient by just sitting and watching and waiting.

 

[kcgoogler]

In fact, I remember one particular signal calling room (European) in which the moderators used a broker out of Europe and some of their clients used the same broker. One day the entire broker system went down for several hours due to some glitch. Yet, the signal caller continue giving trade signals and stating he took the trades until one of the member notified him that the broker has been down for 3 hours...

Nice story wrbtrader. This reminds me of a trading room i was in almost 5 years ago trading using market profile. The moderator talks a very good talk and it seems he is trading live and thats what they market it as but i was once recording a few sessions to learn more; and during a particular big move i was waiting for how the moderator would come out of the trade or adjust it - but nothing mentioned. After a little while he said he was taking profit on the trade (which should have been a big looser). I went back to the recording and played it again and again. and what do you know.. he just ignored the loosing signal and called it as taking profit.

Never been in a trading room since. Most likely he was sim trading if even that.

-gariki

 

[Iwilldoit]

Yeah, that's tough to do if its a signal calling chat room where they are calling trade signals on multiple instruments unless they're using an automated system or mechanical alert system.

Agree, the trading industry is unregulated but it involves everyone. Seriously, like you said, anyone can be a vendor when they shouldn't be one. Just the same, anyone can open a trading account with just an ID and money when there should be some qualifications involved such as an knowledge exam and/or psychological evaluation tests.

Serious, someone here at ET recently said he open a trading account and wanted to trade the Emini ES futures. A week later he's asking what's the CME and what strategy works. Then a week after that he's trading.

Thus, its not a problem about vendors...its a problem with traders as a whole that start at the bottom and all of it needs to be more regulated because too many traders get involved in trading when they don't even understand the basics. I think its the primary reason why there's such a high failure rate among retail traders.

Its like being allowed in a candy store and the kid is told he/she needs to wait, learn, study the candy before he can buy anything to eat. Most can't wait and they will buy very quickly to satisfy that psychological urge.

There's actually numerous psychological researchs involving children and adults when they are put into an irresistible situation with the reward in front of them (e.g. they're sitting at a desk and the reward is at the other end of the desk) and told that if they wait a certain time period...they get the reward. The person that told them that...he/she then leaves the room...leaving just the person being tested all alone in the room with the reward. The reward is something very simple and easily available so that if they don't wait the designated time period...its not a big deal. That's the sneaky part of the psychological test...its not a big deal.

Only a very low percentage were able to wait without any noticeable changes in their behavior during the waiting period but the percentage was higher for adults than children. Simply, as every second, every minute went ticked away on the clock...that simple reward became more important (psychologically the importance changed as time passed by) and eventually it became so very important. So important, that there were physical changes in the participants (e.g. increased heart rate), brain activities changed and the biggest change was eye contact with the reward in comparison to eye contact to other objects in the room.

Simply, it all had an impact on the decisions we make involving stress situations where we know if we do things right...there's a reward. Impact in such a way that the human brain will often make the wrong decision.

Note: This is borderline behavior finance stuff.

If you think the above is ridiculous...go talk to the HR department of some of the worlds biggest institutional trading firms. You'll discover that before they offer you a trading position...you need to take a psychological evaluation test and most firms has a staff psychologist. In other words, they want to know if you're fit for the job prior to trading with millions of their dollars.

Now compare that to the barrier for the typical retail traders...ID and 5k to 10k.

Nevertheless, these vendors should have a designation to prove they can trade.

I require a license to call myself a lawyer,doctor, HVAC technician....why shouldn't it be the same for a trading instructor?

Even tow truck drivers require a license!

Every "instructor" should have an "NFA approved" sign on their website..

 

[Iwilldoit]

I find it interesting that you say you are more aggressive. One would assume the mod to be much more experienced than you. Therefore, I would assume that in the long run, your aggressiveness could actually be detrimental. Volume and risk:reward ratios might be good reasons to skip trades, but either the mod is being too conservative, or you are being too aggressive.

This to me also shows a conflict of interest. The mod is perhaps a bit too scared to get it wrong. He perhaps want to ensure a higher win rate so as to look good in the trading room, but this might in fact be detrimental to overall profit. If he doesn't care as much about trading profit, it shows me that the profits from the room and those indicators is much more lucrative. Now tell me, do you want to learn from a guy who is in the business of trading, or who is in the business of teaching to "somewhat" trade?

Also, the fact that you guys are watching several instruments is perhaps going to set you back. Each instrument has its own mood if you will. You might try the same setup on a few instruments and get totally different results, and of course apart from the fact that you never know the outcome of the next trade, you might also wrongly conclude that there might be something wrong with a particular setup, when in fact the problem is that different traders behave differently who trade these different instruments. If you have to sit through 15 minutes of crap with nothing to do, as opposed to scanning other stuff, and perhaps even missing a great opportunity in the first instrument, learn to be patient by just sitting and watching and waiting.

You have a point, but I wouldn't consider myself 'aggressive', just a bit more aggressive than the moderator (who rarely takes manual trades).

I have verified the mod has nearly three decades of trading experience (at hedge funds too), and is respected throughout the industry.


@Stewie @wrbtrader @Handle123