Ten Types of Trading Rooms’ Hosts You Should Stay Away From

When it’s time to cancel your subscription for a trading room

I was not born a professional trader. I used to struggle in trading like many of you still struggle. I used to read every single new book about trading. I would find a solid trading strategy in a highly reviewed book and it looked simple, clear and reasonable. I tried to follow that promising strategy and after a brief period of success I would get super excited and full of hope that I finally turned the corner. But one or two weeks later I would stop using it and start searching for something better again…

I was desperate to find something like a magic indicator that would make me rich. Nothing worked! And when it all failed I started to subscribe to different trading rooms.

Why would you subscribe to a trading room? Because you get tired of sub par results. You finally get so tired of endless failures so you can finally acknowledge you are not going to make it on your own.

And then you start searching for a guru, a trader who claims to be consistently making money in the market. Just in five minutes you can find couple of hundreds folks on Twitter, StockTweets, TradingView and Facebook who do great job of making impression of trading gurus. They say they had predicted every single move in the market last week, month or year. They say their clients love them. They say their clients make money every single day.

Now I run my own trading room. And every I try not to forget my own negative experience at times when I used to be a subscriber. Here I will share a short list of things I personally hated in the way how hosts of those trading rooms treated their subscribers:

10. I saw many stubborn traders who kept explaining their followers that their forecast did not work because the market was wrong or got manipulated.

First, that is a solid sign that your host, supposedly a “trading guru”, is not a pro. Professional traders never contradict their analysis to market's actions. Professional traders try to stay in sync with the market. They feel the rhythm of the market and they try to dance with the market not trying to change that natural rhythm. They never try to impose their will on the market moves. If market does something contradicting your forecast that is your mistake!

When your host talks about manipulation that should tell you he is either a paranoid or he knows that you know he has failed but he will keep explaining to himself that was not his fault! In any of those cases it is time to hit cancel button!

9. A host is a highly secretive person and says he has “proprietary trading tools”.

Years ago I used to be a subscriber of a guy who claimed he had a proprietary indicator that was able no nail bottoms. He would be buying “oversold” falling stocks all the way down. Weeks after weeks. But what really made me mad is that he would always refuse discussing how his indicator was coded. It took me couple of years to realize the guy and his indicator were jokes. Trust me, the moment you hear from your host “proprietary indicator” rush for the door! People keep silence about details of their methods because they are so primitive that had you known them you would never consider him an expert or follow him!

8. A host shows you an unfolding great trading setup that assumes another 5% drop in price to a strong support zone before it will be a time to go long. But the next update comes too late when price not only tested that support but managed to rally 7% off that support.

This is great the analyst correctly predicted upcoming test of support but wasn’t he supposed to alert subscribers when price did test that support?! Now what? Price went up good 7% off the point where you were mentally prepared to buy that stock. Do not tolerate if that happens regularly.

7. A host dumps dozens of new setups every day without follow-up on previously posted ones.

I admire analysts who are capable of analyzing 30–50 new stocks a day. Not only I can’t do that but I even can not imagine how they do that! But if you look at that from perspective of a subscriber that is a horrible service. If you are a paying subscriber you expect a host to deliver several high probability winning trading setups. You may be able to follow 5–8 of them. But what if you get 30–50 new setups every single day. What if analyst never tells you what setups he personally likes more? This is one of those cases when less would be much better than more!

6. A host shows you a chart of a stock that has rallied 5% today and says he did buy that stock yesterday…

This is when you really hate the host. You paid him money to tell you when it is a good time to buy and sell. You can understand when a host misses that critical moment. He can not catch them all. But when he buys himself without letting you know you understand the host does not care about you at all!

5. A host loves to mock subscribers.

Believe me there are enough guys out there whose main reason to run a trading room is to hone their own damaged egos. They would make jokes about your posts and make you look and feel stupid in a common chat. The more you stay in this chat the less confident you become. The worst thing that could happen to you if the host is a skilled trader who really gives you great setups and you are too scared to resist his attacks. Never let him humiliate yourself! Even if he kicks you out of the room no good setups worth it!

4. A host feels like he was a best selling novelist in other life. And his every report is a ten page manuscript full of interesting but irrelevant historical facts.

You pay him money to get answer for only one question. You want to know what most likely will happen in the market next 5 minutes, day or week. But instead of answering that question the host will explain in detail why stock crash in 1987 could have been easily predicted and what we should learn form that crisis. When I subscribed to that kind of host I ended up stopped reading his boring reports.

3. A host changes his forecast 180 degrees from devastating crash to a breathtaking rally in one day and pretends nothing has happened!

This is when you stop trusting that guy. You finally realize he is a clown. You feel dumb for listening to his crap for so long. But the worst part of that is that you loose hope again. Yes, you accepted hard truth that you are a shitty trader. But what kept you in the game was your hope that one day you will make it because he made it. Now you come to realize that he is not much better than you.

2. A host regularly posts two scenarios with opposite outcomes.

Yes, I understand that trading is a game of probabilities. Yes I know that quite often it is very difficult to favor one specific scenario over another one. But difficult does not mean impossible! Certainty is what subscribers pay for. If your host tells you it is your job to pick one scenario from the array of possibilities he described he simply steals your money. This is his job and you pay for that job to be done for you.

1. Imagine a host who correctly predicts a sharp drop into a solid support followed by a bullish reversal. Price drops as expected and when it reaches the reversal point the host posts an “alternative count” showing a potential breakdown here.

This is a bad omen for any analyst if he crack under pressure. If you are an analyst who is followed by other people you feel enormous pressure. You are scared to look dumb in the eyes of your loyal followers who only yesterday praised your talent after you nailed some market move.

As a host of a trading room I can tell you a secret about how it really works. At the moment a host starts caring about what his follower think about him in case his scenario gets busted he is toast! We subscribe to trading rooms because we do not have enough confidence in our own trading decisions. If your host has a bad habit to chicken out at the very critical moment you should know it is time to leave!

Let me give you just one advice. I think your main criteria in selecting a trading room should be willingness and ability of a host to teach you his trading method. You really do not want to blindly follow his calls! Even if he is a super star and you keep making money by following him, your real goal is to learn from him and become an independent trader capable of making your own decisions! Look for a mentor and a teacher. Your journey to mastery will take years. Find someone who would make a good company in that journey.

Share with me what would make an ideal trading room for you!

Send me your ideas and questions to castawaytrader@gmail.com

Follow me on @twitter, stocktwits or facebook.

CastAwayTrader Market Analysis

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I trade and teach others to trade with Harmonic Elliott Waves. Follow me on Twitter and read my analysis on www.CastAwayTrader.com

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