© 2019 Full Time Day Trader. All rights Reserved.
Should you be following live trade alerts? And the short answer is no, you shouldn’t, and I’ll explain why.
At first glance it’s very easy to think if I just follow some guy’s daily trades, I can make just as much money as him. Right? Well, not really. Let’s break it down a bit.
Let’s say you’re in a live chat room with 500 or more members.
Now let’s say the guru calls out he’s long stock XYZ. Now he’s not just calling out any stock, he’s usually calling out a low float stock that’s moving up pretty fast, that’s movin up by 50 cents or more in the matter of seconds.
So let’s say stock XYZ is at $2 and starting to move up pretty quickly, and the guru calls out he’s long. By the time he gets in at $2, the stock is now at $2.50 and climbing, because that’s how fast these low float stocks move.
Everyone in the room gets fomo and they start panic buying, in hopes of the stock climbing even higher. By the time you and the members are able to get in, the stock has already moved up 50 to 70 cents, and the guru is already looking to sell his position.
Basically selling his shares back to his members, who are getting in late due to how fast the stock is moving. So the guru starts selling his shares, back to the chat room members essentially. And what happens when the stock doesn’t move any higher? The room panics and they start panic selling their shares, causing the stock to crash, and most likely most members in the room will have to sell their position for a loss or be stuck holding the bag.
This happens day in day out inside of large sized chat rooms with live alerts. And those are the dangers that come with following live trade alerts. Many new traders are looking for live alerts but are unaware of how dangerous and damaging it could be to your trading account.
Besides all of that, large rooms are filled with a ton of noise. You have members blabbing out random tickers every few seconds, this stock is going up, that stock is going up. All this will do is confuse you even more.
Instead of searching for large groups of such kind, new traders should focus on finding a small group or mentor, a room no larger than 100 members, where the mentor can actually focus on the members, and not just alert stocks to a giant herd of sheep.
My Discord room is a perfect example of that. I currently have under 50 members, so that I can actually focus on the members, while teaching them a real trading strategy that they can take with them for life.