There are several reasons why top traders outperform the competition. Some of them, you can’t do anything about… while others you can.
For example, most hedge funds and prop trading firms encourage people to trade as part of a team.
There are several benefits of team trading. They include:
- More than one set of eyes on the market
- Someone to talk to about the psychology of trading (the ups and downs)
- More time to develop new ideas and strategies
It also provides traders with the opportunity to bring opposing views, as well as, thoughtful discussions about a trade or idea.
You’d be amazed at how much your trading can improve if you just talk your trades out with someone else.
They might be able to show you something you weren’t considering or give you the confidence to go ahead and trade your idea.
And you know what?
In fact, here’s what David ( a member of my traders chat room) had to say:
“your being in chat more with commentary in the morning and more during the day have helped me a great deal. I hope you will be able to continue that schedule. Your lessons and the time you are spending with your members separates you from other services.”
For some reason, Wall Street has been very secretive about their strategies… and no one really talks about their trades. Silence is golden in the streets.
Heck, maybe it’s not about them worrying about someone stealing their money-making strategies… maybe it’s about them thinking that talking about their trades will influence it… maybe it’s to help their ego.
The traders who don’t share their ideas and thoughts about their trades and try to go at it alone… are typically the ones who end up failing.
You see, in these hedge funds and money-managing firms… traders are split up into groups (stocks, options, bonds, etc.) and they each share their ideas with each other, as well as talk out their trades.
The ones who do that are the ones who become successful.
That said, I’ll tell you one thing… when you don’t talk about your trades it can actually hurt you.
Think about this.
You’re long a stock… all of a sudden, it just collapses and gets halted (the stock stops trading). You’re panicking and trying to figure out what’s going on and what to do when the stock re-opens for trading.
Once the stock opens… you double down because you want to get a better average price, thinking it’ll reverse. However, it just ends up selling off and you take a massive loss.
Let’s say the stock had some news and you were so ensued by being long a stock that just dropped that you weren’t looking.
Well, if you had someone to talk the trade through with… maybe they saw that news or a pattern signaling it could head lower, and that could’ve all been avoided.
The quick solution is trading with a community.
Don’t Trade Stocks Alone, It Could Hurt You
When you trade with other people… it’s extremely beneficial.
You see, there are traders that might have more experience than you… and you can ask them about any trade ideas you have.
Some might even have better access to technology than you and they bring a different point of view to the table.
For example, let’s say you think Bitcoin stocks are hot… and you noticed one stock (BTCS) catch a nice bounce off a support level.
Well, the next day, after you bought at 50 cents… the stock gaps down and gets to 40 cents and you’re down 20% on your position.
You can actually talk through your trade… why you got in… where you’re looking to stop out, your targets and if your thesis still holds.
Rather than just trying to figure out how to manage your losses and whether you should double down on your own, you can ask someone what they think about the trade (make sure whoever you’re asking has been trading stocks for multiple years).
Well, maybe they’ll answer your question like, Well, BTCS did have a move higher… but it maybe you should’ve waited for the stock to open up above the 50-day moving average before it got in. Right now, all you can do is put a stop below the 20-day moving average.
Those few bits of information could cause you to realize you’re wrong on the trade and you should get out…
… and that would’ve been the right thing to do because you would’ve been down close to 50% from your entry if you held.
Now, talking through your trade not only helps you in case things get sour…
… but it also helps you develop a trading plan. For example, let’s say you have a clear trading plan, you know where you want to buy a stock, stop out and take profits.
Well, you can ask an experienced trader about your plan and what they think… then they’ll give you their thoughts. Maybe they’ll give you tips on execution and help you develop a “better” trading plan.
For example, maybe they know a specific setup and your stop-loss area is actually too far away and you’re actually risking too much. Or maybe, your targets are too close and the stock is likely to run higher than you think.
Additionally, having a room full of traders actually allows you to spot more potentially profitable trades because there are more eyes on the market.
Let’s face it, some times we miss trades and don’t realize it until after the fact… and trading in a community is one solution to that problem.
For example, in the Supernova chatroom, we’re always looking for new trades and talking to each other about our plans… our thoughts on stocks, etc.
It’s actually been helping clients… clients like David who was able to lock in $10.5K during the first two weeks of July!
“Good morning Jeff.
FCEL & PLUG were a day swings and also day trades. SLS, & SOLO were day trades all in the first 2 weeks of July.
CEI & AMRH were longer swings with cost averaging. I left money on the table selling some of these too early and then not selling some soon enough.
Total profit after fees: $10,527.80
FCEL + $6990.52
SLS + $1814.94
SOLO + $250.31
PLUG + $295.55
AMRH + $107.89
CEI + $1068.59
I have to say that since the recent split, your being in chat more with commentary in the morning and more during the day have helped me a great deal. I hope you will be able to continue that schedule. Your lessons and the time you are spending with your members separates you from other services.”
That said, joining a trading community could be extremely beneficial to your trading. If you’re having trouble trading the markets alone, then click here to start trading with profitable penny stock traders.