As President and founder of Global Trade Room, as well as Futures FX, I have been in the educational and trade call room business since 2004. In that time I have seen literally thousands of men and women attempt to learn the craft of trading and, pleasingly, some have gone on to have lucrative careers as traders, working for firms or simply trading their own finances.
However, it has to be said… most fail.
The challenge of learning to trade is not impossible, but it’s also not as simple as some would have you believe. There is an old adage in the trade business that it takes OVER 10,000 hours to become somewhat proficient at trading.
Putting that in perspective, if you were to dedicate 20 hours per week to trading, you would have to spend 500 weeks before you could do the job effectively. That’s almost 10 years of training!
The good news is that attending a trade call room, a place in which you can watch seasoned traders selecting and making trades, can help you move along that learning curve and even reduce that 10,000 hours target into something less grueling.
Here are the 6 main reasons why I encourage all of my students to join a trade call room.
1. You’re learning from someone who has mastered the craft
Any trader that can trade LIVE, in front of a group of individuals, and has a track record of success, should have the ability to teach what he knows. Think, college professor. Those 10,000 hours can be greatly reduced simply by having someone knowledgeable SHOWING you the ropes, rather than just telling you what you should do.
2. You can see the trade as it’s executed
Part of the learning process is having positive memory recall. As with exercise and muscle memory, the brain stores both positive and negative events, and by watching trades occur, especially when there are more winners than losers, traders begin to store positive subconscious memories. This has a direct benefit when the student is ready to place live trades of their own.
3. You can ask questions in real time
Again, when working with a successful trader, you’re learning from someone who has been there, done that, and already made all those rookie mistakes. You can ask them questions about trades, bounce ideas off them, and look for general confirmation (or correction) of the trades you’re considering. This is invaluable communication, especially when the student and the pro are able to develop a good rapport.
4. You learn to avoid common mistakes
By trading in a room with a professional at your side, you can place trades when he does. Professional traders will rarely over-trade, revenge trade or enter trades at the wrong time of day.
Over-trading, especially, is the single worst thing a trader of any ability can do. Novice traders often have the misguided belief that they should be in a trade at all times. However, the professional understands that 80% of their time is going to be spent waiting for the correct trade.
Novice traders also have a tendency to take trades that get stopped out and will often take another trade immediately, simply to “prove I was right” or to “get my money back.” Since the trader is waiting on the professional to call the trades, this helps to develop the crucial quality of patience.
5. Trade rooms offer companionship
Trading can be a lonely business. The fact is, unlike team sports, most traders sit in an office, working alone. Being in a trading room, on the other hand, creates a “team” mentality. Students often raise questions, issues, and ideas that traders hadn’t even previously considered. This all helps to reduce what, if we’re honest, can sometimes be a rather monotonous job.
6. You’ll (probably) make more money
This may be both the ultimate long and short-term benefit. Beginner traders rarely make money on a consistent basis on their own, but taking trade calls from a professional who is also trading for a living lets the beginner take those very same trades and enjoy the same results.
Most new traders “blow out” numerous accounts and then quit, whereas traders in a trading room environment have the distinct advantage of being able to earn an income while learning.
There are many compelling reasons to become a member of a trade room. However, not all trading rooms are equal in terms of the benefits they provide. Remember, anyone can throw up a website, call themselves a trader, and invite people to pay to visit their room.
So, before you spend your hard-earned money, here are 5 questions you should ask.
1. Does the moderator have licensing or registration?
This is crucial because it provides you with assurance that the moderator has undergone local, state or governmental registration. Usually this involves passing some sort of examination, helping to establish their credentials.
2. Do the trade callers trade LIVE CASH accounts or are they merely trading in a simulator?
This should be the single biggest issue for you. Why? Because if moderators are willing to put their OWN MONEY into the trades they call, that gives you some assurance that they have confidence in their decisions and their abilities.
3. Does the room allow for lengthy or unlimited trials?
Rooms that only allow a one-time trial, and then use high-pressure tactics to obtain membership, should be avoided at all costs!
4. Can you speak directly to the moderator and trade callers?
Many rooms, unfortunately, don’t provide any way, aside from a customer service email, of communicating directly with the moderators. This is important because, if issues arise, you need to know who to contact and how problems are resolved.
5. Can members communicate with one another?
This should be permissible, either through a “chat” system, a forum, or by email. The rooms that have something to hide or have poor track records will do everything they can to keep members from speaking to each other!
These are a few of the things that a trader should look for when deciding on a trade call educational room. Knowing what you are getting into, before you become a member, is paramount. Styles that don’t mesh, trade callers that use simulators, or moderators that avoid direct contact are all clear warning signs.
There may be other issues that are important to you and, if this is the case, don’t be afraid to ask.
Remember, trade rooms are big business and not all rooms are equal. Do your due diligence, find the right fit, learn to trade, and there’s no reason why you shouldn’t have a wonderful career ahead of you!