It’s important to remember that a bad day trading can outweigh months of good trading. When you are presented with trading results, bad days can be hidden. One way companies can inﬂate results is through what is called a hedge. A hedge is an opposing trade of equal value that oﬀsets any proﬁts or losses accrued by a previous trade.
So, if a trader sets up two accounts, places a buying trade with one and a selling trade of equal value with the other—they are hedging. The proﬁts of the ﬁrst account will even out the losses of the other. Then only the winning trades are displayed. Thus, creating a sneaky sales ploy! This is only one of the many ways these “educators” are enticing customers to use their programs.
How do you spot a faulty day trading entry and exit strategy?
First oﬀ, if you only see a couple of trades on a statement, it’s likely faulty information. But let’s say you see a statement with over 100 proﬁtable trades. Your ﬁrst instinct may be to trust the system. However, it’s important to make sure a stop loss was in place before going with this instinct. Avoid the rhetorical tricks that look to scam you out of money!
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