Mirror trading is the act of simply copying or ‘mirroring’ a different person’s trades. The idea is that one should be able to simply copy the action of a successful day trader, and then reap the same rate of success.
As simple and intuitive as this proposition sounds, mirror trading is actually a bad idea, and here’s why.
Mirror Trading and Timing
The most difficult aspect of trading is timing. Identifying good trades is a necessary first step, but the actual execution itself is the most challenging part of trading and will be the final determinant of the rate and degree of trading success. You can often have the right idea, but end up missing the trade or mismanaging it due to poor timing.
In our day trading chat rooms here at Warrior Trading, you can listen to Ross while he trades. He is demonstrating the strategies taught in his classes. However, it’s important to recognize that many of the stocks he’s trading are highly volatile. This is desirable for active traders because we want to see stocks moving quickly. We don’t make money when stocks go sideways. However, it also means that if you’re trying to mirror trade, you will very likely be missing the correct entry point.
This delay in reaction time means the winning trades will be smaller, and the losing trades will be bigger.
So here’s an alternative to mirror trading.
Learn the Correct Entry Points
You know the saying about how you can give a man a fish and feed him for a day, or teach a man to fish and feed him for a lifetime? At Warrior Trading, it’s not our desire for you to become dependent on Ross or anyone else to produce trade alerts that you can blindly follow. Instead, we have built out a robust educational program that includes simulated paper trading so you can begin to develop your own ability to identify strong stocks to trade and execute on your instincts.
We encourage you to use Ross’s daily broadcast to reaffirm the lessons you’re learning in the classes and to serve as insightful market commentary based on more than a decade of trading experience. The best traders in the community may be trading the same stocks as Ross, especially if the stock is one of the most obvious in the market, but they are executing their trades based on their own understanding of correct entry and exit points.
It is critical that traders always understand every trade that they make. The world of finance is full of supposed experts, yet few people are actually consistently successful traders.
Those that are successful take the time to develop their own individualized strategies, most of which ultimately exploit the errors inherent in herd behavior instead of embracing them.
Mirror trading is the worst example of blindly following the herd, and is antithetical to the core values that successful traders hold.
Avoid the easy promise of profit from mirror trading companies, and focus instead and developing the knowledge, skills and experience that will lead you to make confident and successful trades each and every time.