This is just a general ramble about learning to trade, no particular purpose !
YouTube (or any social media) is a great resource for learning about trading, especially when starting out as a new trader. As long as you understand that virtually every bit of advice you learn there is wrong.
It's because of 'conflict of interest', which is rife in the industry and indeed is exactly how the industry works. Every time you lose money that money is going to someone else, usually the person that 'taught' you how to trade.
The vast majority of YouTube videos are by people who want you to join their service. They're called 'introductory brokers'. There job is to sign up as many people as possible (new customers) in return for a commission. Often they don't work directly for the company that they're spamming but work freelance.
90% of new traders go bust in the first couple of months, and that's how the system is designed to work. The money you lose is then re-used to lure in even more unsuspecting punters. I've heard tell that retail trading companies use over half their profits on advertising for new customers...
The purpose of the system is to remove your money from you as fast as possible, so it can be spent on getting new customers. It's a Ponzi scheme and it works very well. It prays especially on people who are down on their luck and in need of fast cash, exactly the kind of people who can least afford to lose it. It's a disgusting, immoral business.
All retail brokers advertise with the same spiel, 'Make up to a thousand dollars a month, easy money', "Just follow this trading system and you'll be drowning in Ferraris and bikini clad wenches". They guarantee you'll make all this money and show chart after cherry picked chart where the 'system' works. The truth is it doesn't work and you'll end up broke before you know it.
When you've been trading for a while and talking to other traders, you get a fairly good idea of who's actually a real trader or not. Most of the YouTube traders have never traded in their life, they just know how to say the right thing and make it sound believable, they're just salesmen.
This isn't limited to YouTube either, I haven't been on Steemit long but I can see it's rife on here too. Some people in particular are earning 100's of dollars a post to spout complete garbage, you can tell they've never traded either, just regurgitating the rubbish they've seen on YouTube.
You'll notice one post will say "The price is going to reach this resistance level and break through or it will rebound away" ($300 dollars please). And then the next post says "As I predicted the price didn't break resistance and rebounded away" (another $300). Yeah no shit, the price can go up or down so you can't be wrong. Be very wary of learning anything from these charlatans as they're full of it. Still, nice work if you can get it. Don't waste your votes on them.
So who can you trust to learn trading from ? Who's advice can you follow in good faith ? The answer is no-one, you just have to learn for yourself. Like everything in life, take on as much information as possible, use a bit of critical thinking and decide for yourself what is right and wrong. Especially, don't take my word for anything either.
Be always aware of 'conflict of interest'. If you're watching a YouTube video and there are links in the description that lead to some paying service (for a brokerage, or system, or advice service) then walk away, it'll lose you money by design.
Also be very wary of people with cherry picked charts demonstrating how great their system is. Why do they never show the bad trades when their system fails, which is part and parcel of real trading ? The problem is the ease in which anyone can learn a little terminology, make up a simple system and then go cherry pick some charts to make it all look great. Notice also that none of these videos are current or predictive, they always show hand picked charts from the past ?
I have found a few people on YouTube that I actually admire and even one or two on Steemit, and enjoy listening to their methods. The trick is trying to weed them out from all the trash, not an easy task.
Here is my advice on how to be successful at technical trading, although I'll make another post soon with more details.
- Find a trading system that you like the look of, importantly one that suits your personality (discretionary or mechanical).
- Backtest the living daylights out of it in all market conditions (ranging and trending).
- If you got the system from YouTube (or here...) then it'll probably fail.
- The magic part - work out why it failed and then use that as a basis to make it profitable.
- If it's still not profitable, just drop it and try something else, don't get attached to any one system.
I'm a great believer that virtually every system works if used in the right way at the right time, with the right modifications. Just be wary of learning anything at YouTube University and use critical thinking for everything.
Credits:
Hokey certificate image created at http://www.certificatemagic.com/
Hot Ferrari girl : http://www.socalbeachmag.net
Disclaimer : If you blindly act on the advice of strangers from the internet then you're an idiot and probably deserve to lose all your money. There's no fast track to success. Do your own research and make informed decisions based on all available evidence. Critical thinking is the key to everything.