There seems to be a lot of interest in price action day trading rooms or any type of day trading room where proven traders call the trades and everyone else tries to follow along. These rooms are normally set up where traders pay a monthly fee to be members, and for this fee, they can log into a special area where everyone can communicate and see or hear the trades called by whomever is leading the room at that moment in time.
Sometimes the trading room leaders chart is available, but on others there may only be a text chat screen where everyone can communicate about what’s going on, but if you want to watch the charts, you will need your own chart. A few of these day trading rooms even have voice chat on the part of room leader, and these would probably have a huge advantage over the text chat screens in our opinion. It’s difficult to take trades and type about it at the same time while doing it quickly, so if the room leader is taking the trades too, it would obviously be more beneficial for everyone if he has voice capabilities so that he can simply discuss what he is doing in real time in order to speed up the process.
We normally get a request to create a day trading room at least once or twice a week, but we have very mixed feelings about day trading rooms, even if their main trading skill is base on price action trading techniques. The reason for our dislike of a trading room is that it is very distracting for the room leader if he’s actually taking trades, and it’s our guess that the leaders of most day trading rooms are not actually trading or at least not taking live trades. This is not to say that no leaders in day trading rooms take all of their live calls, but in our experience in investigating these rooms, most don’t take live trades. They either call out the trades only, or they are trading a simulated account.
The reason these room leaders don’t trade live in most cases is the same reason we don’t like day trading rooms. There is too much distraction and if you are trying to teach and call out trades while you are trading, it becomes very distracting. In addition, trading in front of a live paying audience actually puts added pressure on the leader and added pressure just leads to mistakes and other problems that you don’t need when trading. However, this is not the main reason we do not like day trading rooms. The most important reason we dislike them is because of the fact that we don’t think traders really learn to trade on their own, and that should be the main goal of any day trading room that is in place to teach traders how to trade profitably.
If the purpose of the room is to take a skilled trader and pay him for his trading skills, then that’s one thing, but finding a great fund or ETF seems cheaper and probably more profitable in our opinion if all you want is someone to make you money. So, the main reason for day trading rooms in our opinion should be to help or teach new traders how to trade profitably, and the only way to do this properly in our opinion is through experience and screen time, while actually concentrating on the price action while learning to read it properly. This is only done through time and experience, and the distractions of a trading room, particularly if the leader is not explaining the trades does very little to teach day traders how to trade.
Below is an excerpt from an article that we found at www.insidefutures.com and it discusses day trading rooms and gives some additional information about them that we think might be important.
What are day trading rooms? They are online; subscription based trading chat rooms that are moderated by professionals who are focused on providing members inside the trading rooms with potential profitable trades or ‘calls’. These trading rooms can be for traders interested in day trading stocks, forex (currencies) and futures. Depending on which market you want to day trade, the trading room you participate in can vary by the hours of availability.
Subscribing members will log into a members area to access the specific trading room of their choice. Members will have the ability to chat with other members and moderators, via text chat, inside the trading room. When moderators post potential ‘calls’ via text chat in the room, members can decide whether to take a position, at their discretion. Members are able to see ‘open positions’ or current ‘calls’ that the moderators are working inside the trading rooms. Moderators may provide alerts to members inside the trading rooms to consider taking some profits, as the position is ‘running’, or moving in the direction long or short, per the call. This action is an effort to enable members to potentially turn profits, depending on the actual entry by the member. Moderators have no way to monitor positions taken by members thus; performance logged is by the ‘call’ in the trading room and not of an actual trade made. Moderators will post alerts to consider closing out an open position inside the day trading rooms when they feel a ‘call’ is done. When a consider exit is called, that particular ‘call’ is cleared out from the open positions and the position is closed out for performance purposes based on the final alert given which would be the maximum profit potential, for that call. Performance is based on best case scenario only and not meant to imply an actual trade was made on that call, while inside the trading room.
Trading success by a day trader while inside a trading room is based on their individual trading skills and trading strategy utilized. A day trading room includes professional guidance provided for day traders of potentially profitable long or short positions under consideration. You can read the rest of the original article here.
Most new traders have the wrong idea about a trading room, but mostly because they don’t really understand what it takes to learn to trade profitably. Learning to trade profitably is a difficult and often long and lonely road. First you must learn a profitable trading strategy, which is difficult on it’s own, but then, you also have to learn to deal with your own inner self. Most traders don’t understand this part of trading because they never get that far. They go broke searching for the holy grail in trading, when there is no holy grail. The only way to learn to trade profitably is to learn to read and understand a price chart, which is what we call price action trading.
However, even if you learn to read a price chart, your mind or the psychological part of trading is the next hurdle, because fear and greed will play heavily on your mind. You will know what to do and you will know your trading plan and rules, but your mind will talk you out of great trades and into poor trades without you even realizing it. This is the mental part of day trading that everyone must also conquer, and it’s difficult to do.
In wrapping this post up, price action day trading rooms simply do not give you the necessary tools or experience to learn to read a price chart, nor do they allow you to conquer your own inner self. These are both trading skills that can only be learned through hard work, time and experience. I have thousands of hours of screen time watching prices undulate on a chart, and that fact alone gives me a huge advantage over most new traders. Instead of wasting your time and money on a live day trading room, find a price action trading course that you like, then get started with the hard work and screen time that it takes to become successful as a trader. If this sounds too difficult for you, find you a good mutual fund or ETF and invest in that, rather than spending your money on a day trading room that is unlikely to help you to become a profitable day trader in the end.