I am asked about day trading and trading stocks a lot. If you’re curious about this ask yourself why you want to trade in this style? Is it for fun? To learn? To make quick cash? If it’s for fun or to learn you can use a “paper trading account” and save yourself the expense […]
I am asked about day trading and trading stocks a lot. If you’re curious about this ask yourself why you want to trade in this style? Is it for fun? To learn? To make quick cash?
If it’s for fun or to learn you can use a “paper trading account” and save yourself the expense of learning with real cash.
If you want to trade for the purpose of making fast, large profits then let’s break that down…
If something is too good to be true, it probably is.
If it was that easy then everyone would be doing it.
People selling courses on how to day trade may not be making money themselves.
I took a look at a couple of courses offered online.
Here is the fine print on one of the sites: and before we get into that, give me a like because it really supports my channel. Now take a look at this.
Make sure you know what you are signing up for if you do take a course and remember with most things, you get out of something what you put into it. Successful trading is a whole new skill set that you will have to practice and learn.
I think it is ok if you have a passion for this and really want to give it a shot, but know you are jumping into something that has a 90% chance of failing, but here I am making YouTube videos with probably about the same chances of “making it”. You have to ask yourself what you are risking though. If I never make it as a YouTuber I still have my credentials to be able to find another job in corp. America and I’m not risking our financial lives to do this.
I have seen day traders that get in over their heads and start using borrowed money to trade with and it ends up magnifying their losses. I have seen women that have no idea what is happening in their investment accounts. Their husbands tell them about the good trades that they made money on and leave out the losers. If you are trading, make sure you keep your spouse or partner in the loop of what you are doing with your shared money.
You can get lucky with a few trades from time to time, but in the long run- even professional money managers don’t outperform the market as a whole.
Here are the percentages of mutual fund money managers.
This doesn’t necessarily apply to day traders, because they are in a whole different ball game, but I use these numbers simply to show that if a professional whose job it is to choose stocks that will do better than simply following the index can’t do it successfully, then, of course, it will be difficult for an average person who takes this up on the side to be able to be on the winning side of buying and selling.
That brings up another point. If you are buying, someone else is selling, and visa versa. Hard to think that you are always going to be on the right side of that transaction.
If you still really want to get involved in day trading I would say to start with a paper trading account first. Start small if you are using real money. I would also get yourself an index fund that is in the same category as what you are trading. For example, if you are trading tech stocks, you could get the QQQ which tracks tech stocks. Over time you can compare your performance to the ETF and see if all the extra work of trading individual stocks is worth it.