During today’s global banking crisis, more and more day traders are worried about the safety of their funds if their forex broker goes under.

In the United States, the NFA (National Futures Association) does not protect against insolvency of forex brokers. Nevertheless, I believe that FX (foreign exchange) remains one of the best asset classes for active traders.

That’s one of the main reasons why many traders and investors are switching brokers. Different jurisdictions offer access to brokers and banks that offer account protection in Forex. Some of these firms offer the MT4 (MetaTrader) platform, which has become sort of a standard in the retail forex trading arena despite some critics. The execution quality many of these trading firms are providing has also improved - and many claim there’s no intervention from a human dealing desk.

So the next time someone recommends for you to open an account with a brokerage firm just because of NFA membership, think again. You need to do your homework and find out just how “safe” your trading or investing account with each brokerage firm is.

Our day trading blog just went through its 2-year anniversary! Wow; time flies! It was actually on November 3rd, 2008 that the blog section of Day Trading Tutor turned two (see “News” section on navigation menu).

For two years, we’ve embarked on a wild journey through the forex day trading market. In that time, we’ve learned the hard way about all the games many FX brokerage firms play, the advantages and shortcomings of the technology behind the scene, and how a historical credit crisis impacts every global market in existence. We’ve also met an endless number of day traders and money managers in the process.

I almost forgot that the Day Trading Tutor website also underwent a major revamp in the middle of it all (read Day Trading Tutor gets a New Look) - and we launched a series of live forex webinars to help day traders become more successful (after years of requests from our visitors).

Happy Anniversary Day Trading Blog!

Dear traders and investors; what bloodshed have we witnessed courtesy of the stock market! Over 8 TRILLION DOLLARS in wealth have evaporated after Thursday’s stock market close - down 39% from its peak. Ouch!!!

Aren’t stocks supposed to be the backbone of all retirement portfolios? Only if you believe the giant brokerage firms that recommend them to us or the PhD Finance professors that pitch’em to our sons and daughters in our universities - or the millions of poor souls that hold them in their investment accounts.

As I witness the Dow shatter through 10,000 and 9,000 (levels of important psychological significance) in less than a week, I’m disgusted on how far down our throats stocks have been jammed. Hopefully, this entire experience won’t be in vain. After this catastrophe, whoever doesn’t realize that traditional investments (like stocks, bonds, and mutual funds) are extremely dangerous, is just a plain masochist.

People; wake up! Don’t you realize that buying and holding stocks don’t offer you any protection to the downside? I’m just bewildered by how people insist on buying these ticking time bombs as they plunge into oblivion; trying to catch the bottom. It’s not about correctly guessing where the bottom is located. It is about being exposed ALL THE TIME while you’re in this treacherous equities market.

At the end of the day, the stock market returns around 10% a year based on historical records (probably less after this year’s drop) - but your downside risk by buying and holding is huge. How many bottles of Pepto-Bismol are you willing to drink to make 10%?

Here’s the million dollar lesson: there are other ways; ways that don’t involve stocks or any other economically sensitive asset class. There are some alternative investment products that can basically eliminate traditional market risk from the equation.

Want to learn more about ways to weather the stock market storm perfectly well?

Sign up for our next free day trading webinar right here.

Americans’ love affair with stocks has caused the delay in many retirements (perpetually in some cases).

This historical credit crisis and real estate bubble blow-up has impacted 401(k) balances across the nation - as well as IRA accounts and non-retirement stock portfolios. Even diversified bond portfolios have gotten whacked, as corporate debt across traditionally “solid” (yeah right!) sectors, such as financial services and insurance, have suffered devastating blows (due to blatant gambling with real estate).

We’ve been warning people against this for years, but unfortunately, the stock-and-bond-centered traditional views of retirement and financial planning are too ingrained in the minds of many investors. It takes a lot of unbrainwashing to bring people out of that spell.

But don’t get me wrong here. I’m not rubbing it in. I feel a lot of sorrow for what our country is going through right now (and it can get A LOT worse). I just want people to throw the traditional investment pyramid in the garbage and open their minds just a little bit. Don’t wait for your stocks to drop to the level of Lehman Brothers (i.e., zero) to take action.

There are other ways to add diversification and safety to your investment portfolio, without lowering your return to that of bank savings accounts. Even though, I’m a fan of day trading (but not with stocks), that should only be a small part of your financial pyramid; assuming you learn to day trade correctly (sign up for our free training and start learning). Most of your pyramid should be composed of investments that provide an attractive return, but with little market risk; investments that your overdressed broker at Merrill doesn’t know about.

During critical times like these, retreating in a fetal position to a dark corner of your closet while sucking your thumb and crying for your momma is not the best solution by far. You need to be proactive and take action early - and don’t wait for any politicians to rescue you (they’re only interested in saving the fat, corporate pigs that caused this mess in the first place).

So what do you do then?

Sign up for our next day trading webinar by clicking here. Believe me; we’re not only going to talk about day trading.

If you want to read the entire article about the heavy toll stock losses are taking on retirement savings, click here.

Day traders; this may sound a bit dramatic, but at the rate the SEC is going with the regulation of short sellers, this might become the next headline!

In my blog post yesterday, “SEC Adopts New Short-selling Rules,” I commented on the SEC’s latest move to regulate naked short-selling. Even though I agree on restricting this activity, I expressed my opposition to wining politicians wanting to ban ALL short-selling of financial companies like banks and insurers. Banning short-selling goes against the principles of free market economics, where supply and demand dictate the price of a commodity. It makes total sense for traders to want to sell stocks short of companies that are in trouble - and now, what a better bunch to sell the crap out of than the glutton banks and insurance companies that fattened their rear ends out of the latest real estate mega bubble?

Early this week, it seemed that the excess was beginning to get squeezed out of the market at full speed when stocks began to suffer severe losses; but then, what happened later in the week? Regulators stepped in with their sloppy, patch-up-the-holes mentality and began regulating the “evil” short sellers. Things got even more dramatic today when the shorting of 799 financial stocks was banned altogether.

In the MarketWatch article, “SEC bans short selling in 799 financial stocks,” SEC Chairman Christopher Cox is quoted saying,

“The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets. This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury and the Congress.”

That’s just too funny! With the phrase, “restore equilibrium,” the Chairman seems to imply that the market has to go up to be in balance. Nonsense! These financial stocks should suffer for their excessive greed. Why should they go up? The same holds true when he states that the short selling restrictions won’t be necessary in a “well-functioning market.” If it ain’t going up, something must be broken?!?!?

Fellow stock day trader, this is why I strongly suggest that you don’t day trade stocks. What for? The stock market is one of the most manipulated markets in the world with blatant favoritism for rising prices. The forex market is a much “cleaner” and “purer” market for day trading. I strongly suggested that you take our free, live day trading webinar and find out more.

But what about for “longer term” investments; “aren’t stocks the best asset class for that?” - you ask. I know that financial planners and stock brokers have been preaching this since the dinosaurs, but that’s all they know. It’s one of the big lies our society is founded on.

If you want to learn about alternatives that, in my honest opinion, are much better than stocks for the long run, dare to give us a call (305-600-4651). But please note: you will have to make an important choice when you dial - if you want to take the red pill or the blue pill. It will all depend on whether or not you want to find out how deep the rabbit hole goes!

“The SEC [Securities and Exchange Commission] adopts rules against naked short-selling,” writes Marcy Gordon of The Associated Press. I laughed my assets off when I read this headline just a few hours ago. This is why I love forex (or foreign exchange) for day trading so much better than stocks.

I’m not saying that naked short-selling should be allowed, but things like this always happen in the stock market during times of crisis (like today when the Dow dropped over 4%). There are so many stupid regulations in the US stock market to control the price of stocks that one might wonder how “free” of a market the stock market really is.

You never hear forex day traders blurb out terms such as “curbs in” or “halted for news pending,” when referring to the buying and selling of Euros, Dollars, and Yens. It’s really quite silly how regulators attempt to control periods of high volatility in the stock market. Many traditional investors and traders (by that, I mean folks who believe that stocks are the best thing since sliced bread) actually swallow the moronic excuse that such artificial price controls are there to protect investors when the world is “freaking out.” Nonsense.

A free market should be allowed to fluctuate by the laws of supply and demand. If traders want to take the stock of a greedy insurance company who got caught with its hand in the real-estate-bubble cookie jar to zero, so be it (anyone got life insurance with AIG? :). Why does the government have to use my tax dollars to bail them out?!?!

Let the system implode from its own avarice I say. We’ve been screaming bubble when it comes to stocks and real estate for over three years now during our managed account webinars. The best way to get rid of a bubble is to let it blow up; not to patch it up with rules against short selling. If you’re trading stocks, how else would you make money when the market is getting hammered other than by selling short?

Apparently, our government doesn’t even want us to sell short stocks anymore. In the same AP article, Gordon states, “Sens. Charles Schumer and Hillary Clinton, New York Democratics, asked the SEC to temporarily ban all short-selling, not just naked short-selling, of stocks of major financial companies.” That one made me pee in my pants (can I say that here?).

If you are a day trader or want to take up day trading, please do yourself a favor and get out of the stock market. Trading currencies, in my humble opinion, is much better. If you don’t believe me, sign up for our free day trading webinar by clicking here.

If you want to read more about the naked short selling mess in the Associated Press article, here it is: SEC adopts rules against naked short-selling

The first “Becoming a Professional Day Trader” live webinar was officially delivered this Thursday. We actually had two live training sessions on Thursday; one at 3 PM EST and one at 8 PM. We were very happy with the outcome.

During the webinar, different day trading strategies were covered in full detail on the MetaTrader platform. It was super cool seeing all the indicators come to life on the MT4 canvas in full color.

As mentioned during the webinar, our main objective is to incubate successful day traders that want to either trade their own accounts successfully or become professional forex money managers. Part of our goal is also to create a network of day traders who communicate and share ideas and experiences on an ongoing basis.

I would personally like to thank all of the attendees of this day trading webinar.

The new FX day trading webinars are off to a great start.

The launch date was August 7th - when we had the free trading webinar, “Understanding the Forex Market;” the first webinar in the series. Since that time, we’ve had pretty good feedback from the attendees during the webinars; which have ranged from aspiring day traders to existing stock and futures traders interested in the forex market.

The most important webinar in the series (”Becoming a Professional Day Trader“) will be taught for the first time this Thursday, August 21st. In my opinion, this is the most important training webinar and one that anyone that’s serious about making day trading a career should take.

Our objective with this day trading training program is simply to create successful day traders. Furthermore, traders who rise above the ranks and are consistent in their trading and risk management ability will also have the opportunity to manage money for others. Therefore, this training program may also propel interested investors and traders into a money management or professional trading career.

See you at our next webinar!

I have been receiving some emails asking about the status of our old forex day trading broker, FXLQ.

This leads me to believe that some clients have not read my blog posts earlier this month about the termination of our relationship with FXLQ. You won’t see any activity in your FXLQ brokerage account because we cannot trade there anymore. It is obvious that we soon need to start day trading. Brokers currently being tested include one who provides Strategy Runner with Currenex, a London forex broker who will provide Currenex via MetaTrader, and a Swiss broker who has a similar setup.

The two MT4 day trading brokers are almost ready to release their Currenex products. This might happen this week, but it is not a guarantee. The only Currenex broker where we are actually trading live with Strategy Runner is ODL. So far, the Strategy Runner day trading software is performing great, but we need to run it through some more dynamic market scenarios to make sure that it is acceptable under extreme conditions. I want to make sure that the conditions are right before I give you the green light to transfer your accounts from FXLQ to another forex day trading broker. I am planning to make that announcement by the beginning of next month.

Please understand that we’re not resting on our laurels. If there’s someone that hates the status quo it’s me! Believe me, there’s a lot going on in the background. But one thing that I won’t do is rush into a relationship with a new forex broker or into trading under unacceptable conditions.

Neither you nor I make any money if the money is just sitting in a brokerage account. I do not earn any interest on it - that’s for sure; so I want the action to resume; really!

Please keep checking this section of my day trading blog for future updates. The day trading broker green light may come at any minute!

In Day Trading the News, I discussed the popular news day trading strategy as it applies to forex (foreign exchange) online trading.

Trading the news does not just apply to currencies though. Many traders day trade during economic or news releases using stocks too, even though I like currencies better for this. Why do I prefer forex (or currencies) for day trading news?

One word…”simplicity.” A currency is like the stock of a particular country. When it comes to the stock market, a stock represents ownership for a particular company. Whereas there are tens of thousands of stocks to choose from, there are only a few major currencies available. This simplifies matters greatly when you’re going to day trade during news releases. In general, all you have to do is focus on a particular currency during each news release. You don’t have to worry about thousands of stocks.

Some of you might argue that in order to avoid having to worry about which stock to trade during news time, all you have to do is trade a stock index that represents the entire stock market (using stocks like Diamonds (DIA) or Spiders (SPY), which mimic the Dow and the S&P500 respectively). While it is true that day trading a stock index simplifies matters somewhat, I feel that it is easier to determine how the outcome of an economic statistic is going to affect the price of a country’s currency than the average value of its stock market.

So currencies still earn my vote over stocks for the online day trading of news.