I received an email a few days ago from a trader overseas that distressed me somewhat.
The email more or less expressed that this trader had blown through her savings, her credit cards, and her trading accounts.
She had a few thousand dollars left in her account, and pending some living expenses, would have less than $500 available for food.
I wasn't sure what markets she was trading....if she was watching the EURUSD, the emini S&P, or Crude Futures - but I certainly sympathized with her situation.
She was desperate, clinging to the last few inches of the trading rope - and finally stumbling on a vendor that cared enough to talk about the darker side of day trading.
And so I sat down to write her an email, expressing my concern for her and most particularly, where she had traded herself into. A death spiral.
I went on to explain that I hadn't met a trader that had traded themselves into those circumstances, and traded back out of them successfully. I didn't know anyone that traded with an account as small as hers was now, and successfully handled the stress from the reasonable draw downs that were sure to ensue. Lastly - the stress of trading to survive when a trader had never been profitable was a Herculean task. And again - I'd never seen it done.
I asked her to explain her methodology to me...what her setups looked like - and what her general profitability was. I was trying to ascertain if she even had a methodology - or like most traders - was drawn into the spider web of fast profit vendors that pushed their plug-in-and-play systems to the waiting hands of naive people. I know one trader actually that paid $2000 for a "MACD CROSSOVER SYSTEM". We both laughed at that point in the conversation - remembering that we've all been there.
I came to find out she didn't have a system. She was biased by what she had heard on TV and read in the papers. She wasn't taking longs for such and such a reason, or wouldn't take trades on certain days in certain directions because of what so and so had told her. It was crazy trading - no rhyme or reason to it. Straight newbie discretionary trading.
All she wanted to see, was a few Flux charts for later in the week, so she could compare her charts to our signals.
Now, I did the math really quick. After food - she had negative $1500 to pay for the Flux tools. Not a healthy sum.
But that wasn't the really disturbing part.
In a follow up email, she confessed that she wanted the charts sooner if possible, as she had a limit order sitting in the market on the Emini S&P.
I lost all but the last breath in my body. After everything - she was still trading live.
When I pressed her on this trade she confessed, "I'm addicted".
It's easy to get addicted to trading - or the idea of it. For poops and giggles, I went over to the largest trading company's website. Let's call them "FadersInternational".
I went to their Blog. -click-
The blog was a series of client's success posts from the room.
"MADE 50 TICKS TODAY IN 5 SECONDS!!!!"
"UP 14% TODAY!@!!!"
....and so on.
You tell me.....is that an honest, and accurate portrayal of trading - or a silver lined spider's web designed with one purpose and one purpose alone?
We've all been where this woman has been. I've seen things that pain me to talk about.
In the end, I'd like to think that you do traders disservice by not trying to talk them out of trading live, especially without the fundamentals in place.
I want to shake people sometimes and say, "you need to stop, now".
Most times I'd rather shake the other vendors - press their faces into the pages of the emails we get - the cried for help at the 9th hour with nothing left but rent money and mayonnaise sandwiches. I want to ask them how they sleep at night and look themselves in the mirrors they bought with money from people like this lady.
It's not all profits and playgrounds. Trading, is the hardest thing I've ever seen people try to do.
I don't think I'm going to send this lady charts. I'm going to tell her that she should close her account out, take a break - and walk away.
Build up a savings account, and try again in a year, with fresh ears.
I'm pretty sure she won't listen to a word I'll say, though.
