Whom do you trust?

Georgii

Georgii

Hello all,

I'm a new trader. One of the biggest problems I have is figuring out whom to trust as far as market analysis and learning trading skills are concerned.

I've already learned long ago not to trust "trading signals" websites (the very idea of someone else telling you to trade is silly - in that case might as well just give your money to be traded), or trading systems.

There are books written by so many people, some of whom work for brokerages, some of whom are supposedly traders, and most of them are also trading coaches.

The painful question that always seems to get asked is "If this person is a really successful trader, why are they teaching seminars? They should just be trading and making millions". Isn't there a danger in listening to the wrong source, and learning the wrong ideas about trading?

The problem comes down to trust. What criteria do you use to find out if you can trust a certain trader or analyst? Through many months of reading, I've come across many sources of information and you just have to ask yourself, what is valid and what is not. I mean, I'm sure after all the books and websites I've read I could probably write an article on how to trade, even though I am not yet a success by far.

Has anybody any suggestions on what they do in order to establish credibility? Sure, you can go trial and error, but you can end up wasting a lot of time with the wrong information.

Thanks for any input...
 
You should trust the fact that no one really knows why the market moves in a certain way and even people who claim they know they still do not know.

You have a very good point, if one is such a great trader, why sell books and teach seminars ?

If for whatever reason you know that for a fact IBM is going to go up, would you publish a newsletter to let everyone know about it or yould you quitely buy IBM ?

Besides, it is much better you losing your own money for some wrong decisions you made than someone 's else.

There are no financial experts. You can find some general guidelines, but no one will ever tell you how to make money.

Unfortunately many people love to hope and hope is exactly what will be sold to them.
 
Price action is what you can trust. Trading is gambling. Professional gamblers can make money because they know when to fold and when to bet.
 
Quote from RedDuke:

Price action is what you can trust. Trading is gambling. Professional gamblers can make money because they know when to fold and when to bet.
More...

This is exactly right, dead on! I worked for years as a dealer in the casinos and the similarities between gamblers and traders is uncanny. Go to any of the yahoo message boards and you will actually see a ton of people on there that are always saying stuff like "good luck to all the longs" It makes me shiver when i hear that because thats what i used to say to gamblers right before i took their money.

But just like gambling, there are things you can do to improve your odds. Gamblers learn the game, they count cards, they learn the odds of winning with certain hands at poker, ect. If you go loaded with knowledge, watch how the game is played for a while, play with paper money, ect. you have a better chance at winning. Dont just head over to the blackjack table (or the NYSE) and plop down $25k on the first hand when you've never played before. You might get lucky and win, but the odds are you will not.

At the tables, i saw many people win lots of money but keep playing until they lost it all. 99% didnt know when to walk away from the table(or walk away from a stock) People emotions in Vegas are the same as investors emotions. They dont know when to walk away from a loss and they keep throwing money down at the same table they are losing on the same way investors try to average down. People would rather be right than make money and when you lose a little bit of money and walk away, its admitting you were wrong and thats the hardest thing to do pyschologically, so some people stay, hoping things will turn around so they can be "right"
 
To be honest, I've always disliked the comparison between traders and gamblers - even though I know there is a lot of crossover.

Personally I've never laid down a single cent in a casino. I realize that in the end, it is entertainment and not a business (for the player that is), unless you're one of the very few who turned it into a profession - in which case the casino will try to stop you from playing.

I would venture to say that there is more money in successful trading than in professional gambling. I've never heard of anyone who made a fortune (we're talking seven figures and up) at the poker table, unless we're talking a few select contestants at poker championships maybe.

My personal view of trading is that it is a business that hinges on speculation, and all business has elements of speculation in it (hence the reason stocks move, lol). The moment you view trading as something being done for entertainment value (i.e. you start thinking about "luck"), then it becomes a poker table, not a business.

I also think a lot of people who can't trade realize there's a lot of money to be made in the "Trading services" community. They realize that brokerages made more money than they did - so what do they do? Start a brokerage! As they said in "Trading Places", 'regardless of whether our clients win or lose, we make money off the commissions'. Since a brokerage requires a lot of capital and work, writing a book, teaching a course, or starting a trading signal service (and learning the power of performance disclaimers) is an alternative path. So is being an analyst. You get paid a regular wage for putting out an article.

Anyway, getting back to the original issue...

The way I see it, there are two categories of people where trust is involved.

The first is in trading instructors, people who tell you how to trade, how to think about trading, etc. For example, Van Tharp trains traders, but his trading record is really not something amazing according to what he says (he does manage his pension fund and is doing "very well", but what that means I don't know). He is really in the business of providing services to the trading community, not so much trading. Those are two different things. Why should I assume there is any value in what he has to say?

Second are analysts, especially macro oriented ones. For example, Boris Schlossberg is always on TV, has written a few books on trading, and is now in business putting out trading signals. He works for GTForex. The guy has read a lot about traders and trading, and analyzes the hell out of the currency market, is on CNBC, etc. Something tells me though that he isn't living off of his trading income. He's telling me I should trade with a 20 pip risk and a 7 point target. Should I trust him just because he's on TV and all over investopedia.com? Maybe I should do the opposite of everything he says? When he tells me that the Euro is being sold for this reason, maybe it isn't?
 
Sir,

Allow me to rework and shorten your question a bit… – then answer (btw for the record I do not trade Forex – but I am a Trader)


So – who do/ would you trust completely to;


Hand over all your money to

Entrust your trading success to

Tell you what, when, and how to trade

Willingly share equally in your loses, failures, set backs, stress, successes

Willingly stick with you each step of the way through your journey

Teach you, train you, and improve your trading

Build you a successful trading methodology, system, approach that you will trust completely


No other person on earth – will ever know how you learn
No other person – will look at trading /set ups/ methodology/ approach / system – through your eyes
No other person – will ever know your weaknesses, and strengths – like you
No other person on earth – will give a damn if you succeed or fail – really

No one on earth will ever know what the market will do tomorrow (much less in the next 5 minutes)


Answer;

Trust on no one – but yourself…

Rely on no one – but yourself

Btw – Trading is gambling – get use to it


Why am I giving you this advice – because a voice inside me says I should – and I always listen to my voice….

I suggest you learn to listen to your voice as well – it will serve you well in this business


And yes price action can be trusted – to a point (which is why stops are of utmost importance to success)


Welcome to trading – I wish you a successful journey

Regards

RN
 
The more I read the more I come to the conclusion that you basically just have to develop an excellent BS filter.

I do think its a mistake to have someone else call the shots for you, because in that case you might as well just give your money to an investment manager and walk away. All of these "signal systems" to me are a complete waste. The assets under management fee is less than the subscription fees of many of these services, not to mention the value of your time at the computer entering someone else's ideas.

The big question comes in developing the right trading mentality, the right attitude towards the market, and having reliable data on what the market is doing on a fundamental level.

If someone gets on the tube and says "investors are fleeing the dollar because...", and the "because" is wrong, then the premise upon which the picture is built is flawed. That is the big danger I see. Sure you should question everything, set stops, etc. But obviously a trader doesn't have the resources or time to independently verify fundamentals that are being discussed by some analyst.
 
Quote from Georgii:

I'm a new trader. One of the biggest problems I have is figuring out whom to trust as far as market analysis and learning trading skills are concerned.
More...

Trust? Why would you need to trust anyone, let results speak for themselves.

Trading isn't an exact science, neither is it rocket science, either something you read makes logical sense to you and you can make practical use of it, or it doesn't and you can't.

The same applies to system, signal, and training course sellers, market analysts, fund managers, supposed gurus, and indicators......either they help you to make money or they don't, there isn't any grey area, only P&L.

No trust involved.
 
Quote from Redneck trader:


Btw – Trading is gambling – get use to it

RN
More...


Right on, RN.

I just do not understand why people do not understand that in day trading, the odds are much worst than a casino game. After commision and slippage, the odds of each bet (Trade) on average is probably 45:55 and is much worst than blackjack.

Not until one realizes this fact, he/she can work on a system to beat the odds and be a winning gambler, sorry, trader.
 
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