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  1. #1
    Join Date
    Aug 2007
    Location
    Boston, MA
    Posts
    1

    A note about daytrading scams

    It seems to me that most of the daytrading or investment scams rely on convincing you that there is some secret to it. In other words there is some way to know more than the rest of the players in the market. I don't believe this is possible for the "little guy." How could it be? As soon as there is enough information in a place that you can find out about, at the very same instant plenty of other people find out the same information and act on it. So any advantage you have immediately disappears. How could it be otherwise?

    risma

  2. #2
    Join Date
    Jan 2007
    Location
    Boston
    Posts
    375

    Re: A note about daytrading scams

    risma, True, there is no advantage. Day trading is exactly what it implies "day trading" is your broker gonna come up with a new secret every day? The only motive for a broker to encourage day trading is to generate excessive commissions (churning) you'll lose your $ and he's on to the next guy. Day trading is a more popular method of investing (gambling) in the commodity futures market than in securities due to the high amount of leverage in futures contracts. Most day traders in the futures market do not rely on info or "secrets" they react to market movement, i.e. If the price of gold is down sharply today lets say around $14 per ounce, about an hour before the close the day trader will purchase a gold contract (100oz) in hope that the sellers (other day traders) will take profit and cause a recovery in the price. A few minutes or even seconds before the close the buyer will sell his contract exiting the market. If all goes as planned he purchased his contract when gold was down $14, but when he sold it at the close it was only down $8. A six dollar gain on a 100oz contract is a $600 profit. not bad for an hours work. A day trader thinks like a casino player, he knows if he hangs around long enough he'll lose. So the mindset is: Get in, do some damage, and get out...
    Rich99

  3. #3
    Join Date
    Jun 2006
    Posts
    3,120

    Re: A note about daytrading scams

    I agree. Day trading without large resources is similar to gambling. If you get ad promising you riches by day trading they want one of two things from you. Commissions or "training" fees. In both cases they will dump you as soon as they such you dry.

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