For the second time in a week, I had a conversation with what I consider to be a rookie trader, and both seemed to have similar issues. The gentleman in question is in his 40s, and has made a fair amount of money in his previous career. Now he wants to trade for a living, and is experiencing a huge amount of frustration.

This gentleman has the best of everything. New trading computer. A charting package with all the bells and whistles. Bloomberg terminal on his desk. Subscriptions to 20 or so, incredibly pricey advisory services.

If anyone is well capitalized and positioned for success - this trader is.

So what is his problem?

In an word acronym, FUD!

I believe the origin of the acronym is from technology companies selling security products. It stands for F-fear, U-uncertainty, and D-doubt. The concept is to use basic psychological tactics to sell ones product or theory as a defense against the bogeyman engendered by the marketing.

The newsletters and advisory services this gentleman subscribes to, in the absence of actual analysis, and certainly without being able to advise in custom fashion to each client - chose to take the easy way out, and cry that the economic sky is falling.

While the American economy may or may not be heading into the sub-basement, the idea is that trading decisions for day traders can NOT be made in macroeconomic scale. That may be fine for portfolio positioning, but not for a guy trading in and out multiple times a day.

I paraphrase (poorly,) be careful in choosing your mentors. If you listen to those who offer advice, make sure they know what they are talking about, and perhaps more pertinently to this specific gentleman, that the advice is applicable to the circumstances.