BEWARE of anything RISK FREE!
Whenever you hear “risk free trading” what you are hearing is similar to stating that a game of Monopoly is risk fee. In other words, the speaker is claiming trading is risk free because it is based on a fictitious- non real- world of trading. There are so many differences between risk free “demo trading” and real life trading that we could write a book on that topic alone. The Wizard wants to inform you of some of the more important distinctions and cautions you should take whenever you hear about risk free trading or your “style” of trading. Remember the only real “style” is style itself…meaning being profitable.
You may find many sites that entice you with terms similar to risk free trading through “demo accounts.” These statements are at best statements that should give you great pause. The Futures Wizard cannot be fooled and knows that only actual -in the market experience- can create a good trader, a great trader, or a Wizard. Empirical studies have established the abysmal correlation between “demo” trading and “actual” trading.
As stated above, it is risk free because there in nothing at risk- real money is not being used- so of course it is risk free. It is not very insightful when you really consider the context in which that statement is made. It is tantamount to a guarantee that if you do not go outside you will not get wet.
These risk free sentiments leave out the reality of actual trading in the markets which include several critical and indisputable factors. The first is the emotion that is involved with fake money versus real money. The differences are endless. Another important distinction is the way all of these services use so called risk limiting “stop” orders when the simulated market moves against you.
What they fail to mention is that a stop order only “triggers” what is known as a market order in the particular product for which you have placed the stop order. In reality losses are much greater than the stop price used to calculate demo (“fake”) trading. The Wizard will reveal one secret to success. Small (tight) “stops” will yield big losses in the most painful, prolonged and agonizing manner.
READ ALL DISCLAIMERS CAREFULLY! BEWARE OF ANY RISK FREE CLAIMS THAT DO NOT OFFER YOU SOMETHING FOR YOUR INVOLVEMENT. IN THE END, NO ONE OFFERS WHAT THE WIZARD OFFERS. OUR INTEREST IS IN YOUR INTERESTS PERIOD!
Be well and Trade Like a Wizard!
Danny Leboeuf – Senior Editor- “The weekly wizard”