Part Two: The Trade Rooms
Getting the right tools in the hands of the right people yields the most desirable results. The same could be said about types of traders and their respective rooms. Just as there are different traders with different goals, there are also different trade rooms.
Novice Trade Rooms
If you are just getting started on your trading journey then having access to the right trade room can be very beneficial and advantageous. Gaining the backbone and support structure early on can put a novice trader on the right path while allowing them to develop the foundation for their future trading experience. Simply put, understanding the effective daily habits of successful traders and the methods that they use cannot be learned over night. Novice trading rooms allow new traders to get instant access to charts, strategy signals, and proprietary indicators (which typically have high costs associated with them). Beginner trading rooms also help new traders come to terms with the mental aspect related to trading, such as dealing with risks, entries, exits profits and losses. Having a group of support can help you better prepare for unexpected news and arm you with technical setups that may prove to be invaluable as you begin to trade. Further, by observing what experienced traders are doing on a daily basis, a new trader can learn the habits that will help them survive as a trader.
Experienced Trade Rooms
Experienced traders may have the mentality that they have survived this long without a trading room, so why start using one now? I would argue that there is always room to improve one’s self and gain previously unseen perspectives and insight by positioning yourself with a trading group that challenges you to excel. I do think that regardless of your success or lack thereof, there is simply too much information and data to absorb on a daily basis for anyone to go through alone. At the very least, it may allow you to not feel isolated and provide a degree of human interaction to take into account as you trade.
Trading rooms can differ in many ways, but they all have several common denominators. Market categories and trading terminologies should be fairly standardized and should not present a major barrier to new participants. It really comes down to personal preference and/or experience level that will determine which trade room is best suited for you. However, no matter what kind of trader you are or what your risk comfort is, there is a corresponding trade room for you and your trading style.
Education Trade Rooms
In a more educationally-focused trade room, a moderator may discuss strategies and potential setups for paper trades. They also discuss what avenues can be utilized for transitioning to live trading. Moderators may start by checking in around the opening and then checking back periodically throughout the day. Many times, the users in these trade rooms will have their own discussions to help discuss setups or bounce trading ideas off of each other. This type of room can be extremely useful for new traders who are seeking guidance from an experienced moderator or want to review a new strategy that the room is teaching. Typically, this style of room is used to promote a strategy signal for purchase or an educational package — this in turn can be leveraged as an avenue for growth and development. These rooms can usually be accessed on a trial basis or are provided for free by sponsoring signal providers or brokerage firms.
Execution Trade Rooms
Execution focused trade rooms deal with “when and where” strategies to get in and out of the market. These rooms will typically have a moderator who is actively taking a role directing the room on when to enter and exit trades, enter stops, selecting appropriate targets, and managing risk. Depending on the room or the moderator, these can be provided in real time or the moderator may simply drop in every hour to discuss the potential trading developments that have occurred. The rational behind these alerts will usually follow after the initial notification, after all timing is often crucial. Some rooms even have multiple “gurus” who will give a brief dialogue on their area of expertise. The rooms where they check in periodically are more geared for learning the strategy and understanding why things occur but may require you to have a strong understanding of that approach.
Execution focused rooms are the most popular trading rooms. However, these rooms can potentially get a little dicey. It is important to keep in mind that the room and the moderator assume no liability for any losses that a trader may occur while following their advice/recommendations. Rooms that are heavy on performance stats and hypothetical track records raise red flags of caution due to the high potential for superficial motives. I recommend testing the room first and gauging how it operates before you blindly start trading your real money. Even though the moderator is discussing entries and exits and may be trading those signals, you need to remember that at the end of the day, you are responsible for the trades you are making in your own account whether you are following someone or not. I have experienced more trustworthy rooms than not, but always keep in mind that there are people out there that just want your money.
The next topic of discussion is the potential dangers dealing with trade rooms and what you can do to maximize your trade room experience while minimizing the potential risks that may be present.
Read Part One: Exploring Trade Rooms
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