Told My Friend About Trading. How To Teach Him Being Realistic?

Discussion in 'Trading' started by shortie, Feb 23, 2010.

  1. I mentioned to a friend of mine that I trade so he got all excited, has read a couple of books and has done sim trading for 3 months. After 25 trades he is +50% and even more excited now.

    I am telling him that this type of return is totally unsustainable and if he ever trades for real, it will be more like 30%/year if things go his way. If things don't go his way he will blow up like thousands before him. I am not sure he really listens to what I am saying.

    My worry is that he has no money and if he finds the money to trade he will blow up and will end up in the bigger shithole than he is in already.

    He is trying out various methods that generally include support-resistance and a couple of indicators from what I saw. He holds maybe 1-10 days. Whatever he tried has worked for him so far. I attribute this to the beginner's luck for the most part.

    I told him that he needs more trades that will cover bear and bull markets and that he needs to pay attention to the unrealized drawdowns. I also told him to look at extreme cases where stocks/markets drop or go up 10-20%/day to get a feel about what may happen when he applies the trading methods he is learning.

    What else should I suggest?
  2. Ask him if by reading a few books on medicine if he can go out and start a general practice.

    Why is it that people think trading is that simple, I mean you never hear people saying "Hey I bought a book on open heart surgery when can I start operating"

    Can you fly an airplane because you read a few books over the weekends?

    Can you be a chef working at a commercial kitchen because you watched a few shows and read some cooking books?
  3. Well, all in all, get him to paper trade for an extended period of time, plus all the reading he can do. If he still does well, then......

    but wait, roughly how much is his account? getting 50% on a 3k account is not impossible, the bigger the account, the harded to get bigger percentage returns.
  4. the cat is not trading live/real yet
  5. Buzzed


    I would instead compare trading to athletes. Everyone can learn how to play baseball, but not everyone that plays baseball has a winning season.
  6. I never said he was,I just ask him to continue paper trading.
  7. akeserla


    Or watching a few pr0n movies does not make you a pr0n star either
  8. Yeah it would be better for him if he'll just continue paper trading until when he's ready to trade real money.

    I am a beginner like him as well when it comes to trading, that's why I do paper trading at the moment. This way I am able to learn alot of things about trading, like what they said, trading is not easy. It's a learning process.
  9. john_fx


    Ask your friend to wait for a big economic news (a news that that make a big trend changing). If he still make profit, he might be a trading genuine and be ready to make profit on a real account.
  10. Lethn


    Make him trade real with small amounts otherwise he won't learn. If you really want him to wake up to reality then you have to let him experience reality. I've completely avoided demo accounts for that very reason I didn't want to let myself get suckered into the bullshit of demo accounts and now I'm actually looking at making all the money back I lost.

    Though at the moment I want to cry in despair because I didn't close some positions I made last night and ended up losing out on a ton of money I could've made in this huge dip on the GBP/USD, stupid account margin limits! ;_;
    #10     Feb 26, 2010