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Finweek English Edition - - FEEDBACK - Ed­i­tor Marc Ash­ton

to scalp a few points out of lit­tle po­si­tions – par­tic­u­larly when they are trad­ing forex and geared prod­ucts.

In a year, you will f ind that spread trad­ing op­er­a­tors will take thou­sands of trades from peo­ple look­ing to eke out prof­its but at the end of the day, the op­er­a­tors sur­vive on this gen­eral churn. Sta­tis­tics ar­gue that eight out of 10 ‘ day traders’ don’t ac­tu­ally make any money and don’t have the dis­ci­pline to know their prod­ucts and sys­tems. They will sim­ply chase what­ever in­dex is open in the hope that they can make money. You’ll have more buy­ing power Ros­solimos claims: “Ev­ery day you’ll start with 100% in cash and so it’ll be eas­ier for you to an­a­lyse and cal­cu­late how much you’re go­ing to put into each trade. You’ll also know that your cap­i­tal is not tied up in trades and so you’ll be able to buy how­ever much you want . . .”

I have ab­so­lutely no idea what that means but I’m 100% cer­tain that there will never be a sit­u­a­tion where you can “buy how­ever much you want”. You’ll grow a great track record quickly! The next claim is:

“With day trad­ing, you’re go­ing to take on more po­si­tions in the day com­pared to if you were trad­ing on a daily or weekly time frame. But this is great be­cause you’ll be able to de­velop a track record quicker.”

Crass as it may sound, ac­tor Philip Sey­mour Hoff­man died with 70 bags of heroin in his home. But he’s still dead and peo­ple won’t be think­ing that he has a great track record for very long. It doesn’t mat­ter how many trades you have, you are not try­ing to im­press any­body – you are try­ing to ac­cu­mu­late long-term wealth. If you are plan­ning to build a track record then go and study to be a stock­bro­ker, fund man­ager or an­a­lyst but don’t mix up a ca­reer with a hobby. It can be less risky! This pearl of wis­dom re­ally cracked me up though: “The trick with day trad­ing is to keep to strict money man­age­ment prin­ci­ples so you can con­trol the lev­els of risk. And make sure your losses are at least half of what your po­ten­tial win­ners are. You’ll f ind that day trad­ing can be the most lu­cra­tive and ex­hil­a­rat­ing way to trade.”

Dammit! I knew I was do­ing some­thing wrong when I kept aim­ing for those los­ing trades . . .

Please don’t buy this day trad­ing promo non­sense. If you want to fool around with it in your per­sonal port­fo­lios then by all means but don’t for a mo­ment think it is a route to quick, sus­tain­able wealth.

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