It's true. Beginning traders fancy themselves as the next Peter Lynch. They read all the "hot, latest and greatest", New York Times Best Seller trading books such as Market Wizards, and raid the newsstands for trading magazines. They immerse themselves into technical analysis and start learning chart patterns. Many often try to incorporate fundamental analysis into their trading decisions as well. They subscribe to guru newsletters and stock tip sheets.
After trying to trade on their own for awhile using all of this powerful, newfound knowledge they've acquired -- and usually losing all their money - they decide to seek "professional" training. For most traders this entails investing in expensive trading seminars and courses. They go home after the killer weekend course and try their hand at trading again. It doesn't take long for them to find out it's really not as easy as the "professional" made it look when the markets were closed.
Let us enlighten you to a startling statistic: 90% -99.9% of the trading courses and methodologies most gurus teach out there are subjective! That is, they are methods still dependent largely on the trader's own judgment and experience. It remains to be proven to us if trading judgment and experience can be imparted to another individual in a $3000 weekend seminar. Hence, it may be less than startling to you if we told you that 90 - 99.9% of beginning traders lose all their money in the markets and leave shortly after arriving, only to be replaced by a brand new crop of aspiring traders.
Do you think there might be a correlation between the way trading is normally taught (largely subjective methodologies) and the high rate of failure of most traders trading these methods??
Any Trading Methodology That Relies on Human Subjective Input is Doomed in Most Cases to Failure.
We feel this is because the financial markets are designed to be an efficient marketplace. If a Stock, Futures or Forex contract is momentarily too cheap it will almost immediately soon be valued higher. If a Stock, Futures or Forex contract is momentarily too expensive it will almost immediately soon be discounted. The beginning trader is simply not capable of competing in this ultra efficient marketplace.
They get confused with the subjectivity involved using typical subjective methods of day trading. Fibonacci, Trend Lines, MACD and other Oscillators, Moving Averages are commonly used and are all subjective. When do you apply one indicator and not the other? What do you do if one indicator says to buy whereas the other indicator says to sell? This results in what is called "paralysis of analysis." When you trade subjectively, you basically don't know what to do, so you are essentially in a state of trading paralysis and you do nothing, except watch your money evaporate. The use of a good trading robot software will eliminate all subjectivity, which can greatly reduce your trading stress, mistakes and improve your bottom line! TSUBOT by Tsunami Trading Educators, Inc. is one such robot which analyzes price volume & momentum in real time and gives out high margin 100% mechanical trading calls right from your computer's speakers.
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