Get Rich Scheme

Day Trading: Not A Get Rich Scheme

I found myself with a bit of insomnia the other night, so at 2 AM I was relegated to watching infomercials on topics ranging from cutlery to a new brand of blender.  Since I don’t need new cutlery and have a fine blender I found myself jumping from channel to channel until I found an infomercial that guaranteed massive returns on futures trading.

Now this grabbed my attention!

As a long time trader at both the institutional and retail level  I am always interested with anything having to do with trading.  Although I must admit, I have never experienced anything quite like this particular infomercial.  The infomercial inferred that the average trader was in for million Dollar income levels in no time.  Of course, the trading system being offered was new and revolutionary; something the market has never seen before.  A rather pleasant English fellow presented the program.( why do infomercials always hire these Englishmen who practically shout from the beginning to the end of the program?)  Judging by the way he mispronounced a few of the investment terms, I decided he probably wasn’t a crack futures trader.

The infomercial made me feel bad for potential clients of the program, as they are likely to be bitterly disappointed in the results of their efforts with the program.  You see, futures trading is not a get Rich Quick scheme, and it never has been.  Though the perception of futures trading has always been that the players are all high rollers, nothing could be farther from the truth.  Of course, I don’t want to infer that you can’t make great money trading futures contracts; I only wish the program would have pointed out that being a good trader takes time, effort, and a high level of commitment to learning.

I don’t understand why futures trading has developed the reputation as a high roller method for making money.  The facts are indisputable, most novice traders fail within the first three months of trading.  There are a variety of reasons for this high level of failure, and I feel that most traders start trading a live account long before they are ready to do so.  Further, when novice traders trade on their demo accounts they typically do not do so in a fashion that reflects the way they will trade a live account.  Not many new traders are going to be trading 10 contracts in their live account.  But these traders often times feel very uninhibited on their demo accounts and over trade and use poor trading technique.

The secret to getting the most out of a demo account is to trade it exactly the way you plan to trade a live account.  If you are compelled to trade your demo account and in manner which is inconsistent to the trading plan you have been taught, the demo account will be a counterproductive experience for the novice trader.  Instead of learning great trading habits, all that is gleaned from the experience is poor trading habits and lousy trading technique.

We ought not be telling potential futures traders that they can expect huge gains in the early portions of their trading career because it’s simply not true.  The first three months of trading can be typified as fighting for survival as you learn to trade consistently.  I will point out that a competent trader has the potential to earn far superior earnings to the average American wage earner, but the success will come as a result of extreme dedication to the craft of e mini trading and a desire to continue learning and building upon the success a trader will start to enjoy.

Let’s stop billing futures trading as a “Get Rich Quick scheme” and portray it as it is; a lot of hard work and a never ending dedication to self improvement. Times in America are difficult, and people are seeking ( sometimes out of desperation) any method to increase their income.  I suspect using a high-quality training course and seeking out qualified mentorship is a far superior method for success in the futures market than a late-night infomercial promising millions of dollars.  Then again, taking advantage of difficult economic conditions is nothing new to a small minority of American hucksters.

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