In This Episode
- The ol' newsletter trick for 100% winners
- How to spot MetaTrader demo trades in screenshots
- Why day traders should take more breaks
How to Spot Fake Trading Results on Social Media
One thing that can negatively impact your trading is constantly comparing yourself to traders that you see on social media. There are certainly some legit traders posting their results, but many of them are fake.
This this post, we'll give you a few tips on how to spot a fake account and why you should stop looking at that type of content anyway.
Then of course, we'll show you what to do instead, to get your trading psychology back on track.
Read the transcript:
Hugh: Hi, Walter. Today, we will talk about performance envy. You look at all these traders that are falsely successful on instagram or you see some actual results or whatever and you get envious. You try to catch up. So what are your thoughts on that?
Walter: That’s a really good point. There are two things I would say about that. Number one, do you know the old — you probably heard of this but — what they used to do for stock tip newsletters, there was a trick that they would run to get subscribers. Have you heard of this?
They do this online too and I’ll talk about that. Basically what they used to do and the reason I’m thinking about this because my friend just asked me this question this week. He’s getting into trading and he is like, “Man, these guys are new. They just started trading last month and they are already making this amount. What is going on here?”
I said, “Well, you’ve got to know the old stock tip newsletter hack.” What they would do is, they’ll get this mailing list and they would send out free stock tips. Buy Apple, buy Google or whatever but half of them would get a buy recommendation and half of it to sell.
The ones that did well, they would keep sending them and again they would split buy and sell. So basically what happens is after a few months they would have a certain fraction of their mailing list.
They’ll had like unbelievable, do you know what I mean? They couldn’t go wrong. So then they would sign up for the paid subscription. That is what people do online too. Here’s a couple of tips.
When you look at these guys on Instagram or Facebook and to a degree also on YouTube, what you’ll see is these guys posting these outrageous screenshots. A couple of things to look for are, I think in MetaTrader, if it is a demo account the order number starts with a one. You could see that right away. That is BS!
The other one is, you’ll get these guys who are doing a hundred lot trades. If you have a hundred lot trades and there’s no slippage like, it’s poof bang on hitting your nine pip profit target or whatever they’re going for then you know also that is not real. That is a demo account.
So, it’s only on a demo account that you do not get a slippage. A hundred lots is about as much as you can do in retail forex. It is really hard to get those true, do you know what I mean?
You can go current x and stuff like that. You can step it up but really if you are looking at these specially in instagram, it is what they are famous for and Facebook. You’ll see these guys and they’re posting a screenshot. Holy crap! This guy made seven grand yesterday before he ate breakfast.
The reason why is this, it’s all a demo. It is the same thing that I talked about the stock tip newsletter. What they will do is they have multiple demo accounts. Buy Euro, sell Euro and they just keep doing that.
Eventually, they will have a demo account that is unbelievable and so that’s the same thing. You just have to be wary of that. It is like finding a friend. If you are trying to find a friend, there are certain things that you like in them.
I think that is the same thing as with your trading mentor. There’s certain people that you jive with. I get where this person is coming from. It makes sense. This is what I needed to work on. That is what it is.
I am not here to bag against other mentors. There’s some really great mentors out there. They just have different approaches and they have different personalities. They structure their lessons in a different way.
So, it is really more about you finding a good match based on that. Rather than looking for the guy with the best demo account on the internet. That is not going to help you. That is my thought anyway.
Hugh: It is actually very easy to just also cherry-pick only the winning trades.
Walter: Of course.
Hugh: That is what I see in a lot of their accounts. This guy is winning every week but he has no losers and all that.
Walter: It’s so funny.
Hugh: Hey there! I hope you find this episode useful. I just want to let you know that Walter and I give away something valuable every month that helps traders improve their skills. You can enter to win by simply leaving an iTunes review and leaving a comment on our YouTube videos.
At the end of each month, we'll look at the comments and reviews from the month and we'll pick a winner at random. Each comment and each review counts for one entry during the month that it's pitted.
So, if you're interested in that be sure to enter after this podcast is over. Alright back to the episode.
Walter: As far as the jealousy part of it, which is the other thing that you are talking about I think, that comes with a lot of self reflection, knowing who you are. It is easy for me. For example, I have had a bunch of losing trades in a row the last couple of weeks — although yesterday I got what looks like, it’s going to work out which is great. — It is great to get back on the horse and all that.
It’s easy sometimes when your confidence is low when you’re on a losing streak to think things like, “If I was just trading the one-hour charts instead of the daily chart, I would have been able to get in now.” Those sorts of things come up especially when your confidence is low.
I think for me, it is really more about knowing who you are as a trader. Locking into that rather than trying to be someone else. So you really want to find out early on, look, “I’ve got a job. I am home at 7:30 PM so that means I will check the charts at nine. From nine to ten, I’ll check the charts. I’ll put my orders in. The next morning at five-thirty, when I get up in the morning, I’ll check my trades. Maybe move to break even or whatever I needed to do to manage them.”
You kind of set your life around that or “Oh, I am retired. I am sixty-five. I’ve got all this time. Maybe I will trade the New York open and maybe I will get up early in the morning.” Do you know what I mean?
So, it is really more about knowing yourself. Knowing what kind of lifestyle you want to have as a trader because it is hard to trade the lower time frame charts. It is hard. It is not only as it is addictive and that affects your brain but also it is hard to maintain that much focus for that long.
It is like being a pro athlete literally. You have to be so on it all the time. That is why a lot of those people who trade the lower time frame, they take big breaks. They take breaks during the day. They take breaks during the year.
They take a lot of time off and they just unplug because they realize the importance of being really on it in their game when you are executing. Execution becomes so critical when you are trading those in and out trades. The scalping types trades that everyone thinks they are so sexy.
Hugh: I think they also limit themselves to one to two hours a day sometimes.
Walter: Absolutely.
Hugh: Also, I think trading seems deceptively easy. People think, you just learn the system and then just make all this money. But then in reality, it is not that simple. You beat yourself up about, “Oh, I can’t make the system work” and then you go down into that rabbit hole.
Walter: Yeah, you are absolutely right. That is the biggest misconception of trading. You nailed it. In the beginning, it is about the system. It is not. It is about you and how you execute the system.
So that is why for example, you’ll go into the free factory forums and you will find some people saying, some get in there saying, “This system works brilliant. I’ve been making lots of money. Here it is: Hey guys! Do you want to make it into an EA?” Or, “Improve it?”
They usually used to say, “I want to improve it.” Or, “I want to automate it because I hate sitting around the chart and looking at the charts all day.” That is usually how it starts and then, other people get on in there and they’ll look into it.
They will test it out. They may even trade it live then they’ll go, “Dude, this sucks. It does not work.” Why is that? How can we both have the same thing and not get the same result?
That is the same reason why you cannot go by the trader that has the best track record and say, “That is what I want to do” because they might not trade in a way that makes sense to you and you might not have enough time to trade the way they do or whatever.
Maybe they are trading the London open and you are sleeping during the London open. It really comes down to, you are the system. As you know a lot of the work you do is going to be on making sure that you follow the rules.
You are in a good mindset. You are in a situation where the easiest path for you to follow is actually to follow the rules of the strategy. You do not want it to be in a different path that is easier.
Hugh: Like you said, it really comes down to knowing yourself and taking control of the situation. A lot of times I think, traders try to pass the bug onto the system or the mentor or their trading buddy but if you take responsibility then that is when things start to change, right?
Walter: Yeah, it is not the broker’s fault. Exactly. It is not your mentor’s fault. It is not the system’s fault.
Hugh: All right, cool. Thanks, Walter.
Walter: Thanks.
Hugh: All the information in this podcast is for educational and informational purposes only and is not trading or investment advice.
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