Tag: day trading

How to Spot a Real Day Trading Mentor (and Avoid Pretenders) | Entrepreneur

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There is no shortage of people who talk a really impressive game about how they’re rich, have the whole “day trading” thing dialed in, and are willing to teach you how easy it can be to follow in their footsteps to become the next great day trader.

I’m not one of them.

Yes, I day trade for a living, and I’ve done OK. But I’m first in line to tell you that day trading is not easy. It takes dedicated effort over time to start becoming solid at day trading. Then it takes even more time and work to turn it into a profession.

You have two main choices when it comes to learning day trading: You can learn by doing, or get a teacher. Teaching yourself — in other words, making all the mistakes yourself — is a really costly way to do it, in time, money, and stress. I recommend that you stand on someone else’s shoulders and at least avoid many of the mistakes they made.

Because this is not a sales pitch to stand on my shoulders, I will describe five things to look for in a day trading teacher. You can then apply those tests to whichever teachers you find.

Related: Before You Start Day Trading, Know These Stages

1. You want someone who’s seen it all

How long ago did they begin to day trade? You don’t want someone who claims to have done great in the last few months or maybe a year, and now feels bulletproof. The strongest teachers will have traded and survived through great markets, but also sideways markets and downright terrible ones.

You also don’t want someone who claims to be “a natural” at day trading; in fact, you should hope they have lots of figurative scars, which often accompany lessons thoroughly learned.

2. They need to be currently in the game

Michael Phelps may have hung up his competitive swimsuit years ago, but he could be a great swimming coach for decades to come. Not too much changes in competitive swimming, other than younger people regularly breaking records.

Not so with day trading. The markets constantly change in terms of which stocks are listed, regulations being updated and technology continually improving.

Your teacher should be trading every week and preferably every day. Day trading is difficult enough; you shouldn’t make it even more difficult by working with someone who’s been a spectator for too long.

3. They must be able to explain and remember

We’ve all known some people who are great at what they do, but terrible at explaining it to others. Maybe they’re not very articulate, or they speak so fast you can’t follow them.

When I say “able to remember,” I mean that experts can easily forget what it was like to be a beginner. After making literally 25,000 trades in my career, I can glance at four monitors filled with hundreds of bits of data, and it all seems so clear to me. But I do remember the feeling of confusion and even despair while looking at just a fraction of this firehose for the first time.

Look for someone who’s clear, patient and willing to explain — sometimes again and again — until the topic makes sense to you. Day trading is all about near-instantaneous judgments, but your questioning and learning zone should be judgment-free.

Related: Want to Be a Stronger Mentor? Start With These 4 Questions

4. Seek a specialist

If you have a heart condition and need surgery, do you want to go to a surgeon who’s worked on a few hearts, done some tennis elbows and is a fairly good plastic surgeon, too?

You want the person with deep experience. The kind who could write a 500-page book that’s an “Introduction to…” instead of the 50-page pamphlet that’s “The complete guide” to something. Although many day trading principles indeed apply to commodities, cryptocurrency and other investments, I have yet to meet someone who’s equally expert at all those types of investments. I certainly am not.

It may be true that you don’t yet know what specific investments you want to focus on. That’s cool; shop around! But at some point, when you decide the investment type you want to bear down on, look for a teacher who’s done the same thing.

5. Insist on a truth teller

Of course, you want a teacher to make it as easy as possible, but day trading is not easy. It’s not even easy for me at my stage, because every day I must earn any reward, and am quickly punished for forgetting key principles. Stay well away from anyone who gives you the impression that day trading can be picked up without much difficulty.

Also, it’s incredibly important that you find a teacher who shows you ALL of their trades — the fabulous ones, the okay ones, and the “what were you thinking” terrible trades. I can’t say much about day trading with absolute certainty, but I’m certain about this: Every trader on the planet continues to have green days and red days. Every trader loses occasionally.

The only difference is how much they’ve lost, and what they do about it. The smart, surviving traders check themselves into what I call “trader rehab.” This allows them to return to the basics, rebuild their confidence, and get back in the game. Anyone who’s not showing you these scars is not being straight with you, and they should not have your trust.

Social media is full of people who say they took up day trading and scored. More power to them; I do believe in beginner’s luck and once had it myself. You don’t need a teacher at all to have beginner’s luck. But if you want to continue in this profession — not if but when that beginner’s luck runs out — that truth-telling teacher will be the best trade you take.

There is no shortage of people who talk a really impressive game about how they’re rich, have the whole “day trading” thing dialed in, and are willing to teach you how easy it can be to follow in their footsteps to become the next great day trader.

I’m not one of them.

Yes, I day trade for a living, and I’ve done OK. But I’m first in line to tell you that day trading is not easy. It takes dedicated effort over time to start becoming solid at day trading. Then it takes even more time and work to turn it into a profession.

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Ross Cameron

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September 12, 2025
How to Find Great Stocks for Day Trading | Entrepreneur
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If you don’t have a thorough understanding of what professional day traders actually do, then you most likely think day traders are kids with more money than brains.

The composite image of day traders is not flattering when it’s composed of things like this:
- Someone took his life savings to invest in a meme stock to “teach Wall Street a lesson” — and lost it all.
- The guy who brags that he trades on his phone while stopped at a red light.
- Gamers with a can of RedBull in one hand and a mouse in the other and get their trading tips from Reddit threads.
I’m here to tell you that there exists a type of day trader who is highly disciplined and thoroughly trained. These people are more like the “quants” that Wall Street firms hire to make sense of vast amounts of data. Far from being a gambler, this type of day trader is a hunter of volatility and a manager of risk.

Among professional day traders, there are different investing styles to match different risk tolerances. Therefore, I’ll give you my take on five characteristics that make up a strong stock from a day trading point of view.

Related: How I Turned $583 into $10 Million by Day Trading

1. A stock that’s moving now

Imagine someone who graduated from business school and maybe even got an advanced degree in accounting. Oh, and this person also interned at Goldman. They are great at deciphering income statements and balance sheets.

Now, let’s imagine they’ve identified an “under the radar” stock that exhibits powerful signals for being significantly undervalued.

As a day trader, I have little interest in this stock. Why? Because it currently is not moving out of its narrow daily band. It’s not good enough for a stock to be “significantly undervalued” or “poised to move.” I don’t want to wait around hoping that a stock moves. As a hunter of volatility, I am only interested in stocks that are moving right now.

You may think that this approach does not maximize potential profits. After all, the stock has already moved by the time I’m looking at it. It’s true that by waiting until a stock moves, I’m foregoing some profit. But I’ve traded that profit for something far more valuable — the certainty that the stock is one of the biggest movers right now. I’d rather have actual movement versus the theoretical potential of movement.

Related: Learn How to Earn Passive Income Through Day Trading and Investments

2. FOMO

I try my best not to trade with the fear of missing out (FOMO). I instead recognize FOMO as a powerful, primal force on many traders, and I use that knowledge when I take my trades.

Long-term investors may be satisfied with stocks that grow by single digits in a year. Yet, on any given day, some stocks can move up 50% in minutes. Sometimes, the moves can be in the triple digits.

When day traders see a stock that has made such a move, they know that someone, somewhere, just did very well with a short-term trade. These stocks have a powerful mental effect on traders. I look for stocks where FOMO has become a strong signal. The attention these stocks receive may allow me to make some short-term trades.

This means rather than falling victim to FOMO, I capitalize on FOMO that exists in the market.

3. Stocks that are the subject of greed and regret

Yesterday’s epic mover activates the greed glands of many traders the next morning. They say to themselves: “I can’t believe I missed that whole runup!” And they swear that today will be different.

Not only can that emotion mean that yesterday’s hot stocks still retain some heat, but they can infect other stocks in their wake. It’s as though the pent-up desire to participate in yesterday’s headliners is casting about to find the next big mover.

It also can happen out of the blue: When one stock is unusually strong, several others often start to pick up for no apparent reason — other than what I call “sympathy momentum.” I’m on the lookout for this behavior.

Related: 4 Passive Income Investment Strategies That’ll Free Your Time and Peace of Mind

4. An imbalance between supply and demand

The term “float” refers to how many shares of a stock are available to trade on any given day. It’s not uncommon for a handful of stocks to have a few million shares of float. If they become the hot stocks of the day, those stocks can trade in the hundreds of millions of shares.

Just think about what that means: how many times does a stock with a 5-million-share float need to change hands when it trades 350 million shares in a day? As a “hunter of volatility,” I pay particular attention to such stocks.

5. Former-runner status

Day traders have good memories for high flyers. It’s like brand recognition or an afterglow for the stock that was the subject of so much attention in the last trading session. I keep an eye on these former runners because if they take off again, it can happen especially fast.

In summary

Notice how these five stock characteristics have nothing to do with earnings estimates, revenue forecasts, management shake-ups, and other common Wall Street assessments of a stock’s likelihood to move. Even so, they have everything to do with what’s in the minds of other traders as they hover over the buy and sell buttons on their keyboards.

Profiting from short-term fluctuations in price is what day trading is all about. Day traders must be masters of technical analysis and experts at assessing the current emotions among traders. After all, it’s not just the stock chart that is important; it’s how traders feel about a stock that will ultimately drive its price action. If you understand and act on these common forces at work during any given trading session, you have the potential to come home with something to show for your hunting trip.
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Ross Cameron

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November 3, 2023
Do You Know How to Lose? 4 Principles for Cutting Your Losses | Entrepreneur

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Opinions expressed by Entrepreneur contributors are their own.

I’m a great loser. Before I explain just how good I am at it — and why you should work at it, too — you need to know two things about me:

First, I’m a day trader. Much of the investing world values the long-term “buy and hold” strategy. Warren Buffett is the most famous example, and he’s done well. In contrast, the very definition of day trading is that you cannot hold any positions overnight. In my case, I rarely hold trades for even hours. My average hold time over my last 20,000 trades has been about five minutes.

The second thing to know is I’ve built both my day trading account and my information business by self-funding them. Much of the business world values leverage. It’s the notion that if you really believe in your business, you should take on debt or get equity partners. “You’re either growing or you’re dying!”

Being a day trader and a self-funded business owner have combined to make me really good at cutting my losses. Here are four principles for cutting losses that may be useful to you, even if you have no intention of day trading.

Related: I Turned $583 into $10 Million. Here’s How I Did It and 5 Lessons I Learned Along the Way

1. Don’t waste your latitude just because you have it

Currently, I could afford to lose six figures in a trade, but instead, I still trade the same way I did when my back was against the wall.

For a little backstory, I lost a lot of money day trading until I was close to broke: I was divorced, living with my dog in Vermont, selling my furniture on Craigslist and chopping wood instead of paying for heat. In that crucible, I identified what my previous winning trades looked like and one other thing: that I was holding my losers too long. I had to cut my losses faster if I would survive.

This is painful to do! Walking away not only removes the hope that the situation may turn around, but it goes against what we’ve all been told: “Stick with it! Don’t be a quitter! Finish the job!”

Let’s say your situation is different: you have enough money that you can stick with a difficult situation for a while. Should you?

I don’t know your situation, but I do know this: making the decision to quit is doubly hard when you’re in the thick of it. The best way to decide is to identify your quitting criteria upfront. In day-trading lingo, it’s your “max loss.” You are insane to take a position in a stock without knowing the point at which you absolutely must sell. That way, you don’t need to think or evaluate if that number is reached — you simply must react. If you know those criteria with the business venture you’re involved in, it will be far easier to minimize the pain if things suddenly go south for you.

Related: Stepping Aside: When To Walk Away As A Leader

2. Don’t let sunk costs hijack your larger perspective.

A “sunk cost” is what you’ve already spent on a project at the point when you start to think about abandoning it. Examples might be a half-built nuclear reactor, a Pentagon project wallowing in budget over-runs — or the project that’s become a boat anchor to your business.

You might already have spent a lot on that project, and writing it off may be painful and embarrassing, especially if only recently you were on record as optimistic. The only thing worse would be to throw even more good money after bad. You need to be willing to cut your losses.

Here’s how it happened to me. Day traders can — and should — use a trading simulator to develop and test their trading skills without risking real money. It’s a crucial piece of software, so we decided to buy some source code to form the basis of our proprietary simulator. We customized it, and it worked quite well.

Only it didn’t scale. The first 50 to 100 users liked it, but the system began to show signs of choking with hundreds of users. I had invested six figures in buying and modifying the code. Could we have rebuilt it from the ground up? Yes. But the prospect of turning it around was too far distant. I threw it away and entered a partnership with a company that specialized in simulation software. That hurt, but it was the right move.

Related: The Sunk Cost Fallacy is Ruining Your Decisions. Here are 3 Life-Changing Lessons I’ve Learned From Pivoting

3. Encourage feedback, but don’t let it have outsize influence on hard decisions

Business owners want engaged employees who feel their opinions are being listened to. Sometimes, that means doing the opposite when it’s in the company’s best interest.

There have been times when I had gut intuitions about what we needed to do, and my team was like: “This is way too much! How are we even going to explain this when people write in?” In these cases, I tell them: “I have confidence that you’re going to figure it out.” My job is to solve what will work long term, and other team members must solve the challenges in their areas.

Related: How Business Leaders Can Keep Employees Engaged

4. Protracted losses have compound effects

When you don’t cut your losses quickly, that’s an opportunity cost: you’ve spent time managing the loser when you could have redirected that time and money to other opportunities. But an extended loss has another downside: it shakes your confidence for weeks or even longer. In contrast, a quick decision to cut a loss can be a confidence builder.

Making decisions is like exercising a muscle. Some decisions are easy, like where to eat. But when faced with a tough one involving losses, consider using that muscle, feeling the pain, and doing it anyway. You’ll be that much stronger.

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Ross Cameron

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September 6, 2023
How Cognitive Biases Can Impact Your Trading Career | Entrepreneur

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Are you a trader looking to improve your trading skills and increase your profits? Did you know that cognitive biases can have a significant impact on your trading decisions? Cognitive biases are inherent thinking errors that occur as humans process information, and they prevent us from accurately understanding reality, even when we are presented with the necessary data and evidence to form a more accurate view.

Let’s see some of the cognitive biases traders and investors are prone to, and then I’ll tell you what you need to do to limit them.

Negativity bias: This bias refers to the tendency to give more weight to negative information than positive information.

Loss aversion bias: This refers to the tendency for traders to prefer avoiding losses to acquiring equivalent gains. In other words, the pain of losing is psychologically about twice as powerful as the pleasure you get from profits. And this bias can cause traders to behave irrationally.

Gambler’s fallacy: This bias refers to the belief that future events are affected by past events when, in fact, they are independent.

Confirmation bias: This bias refers to the tendency to seek out information that confirms preexisting beliefs and ignore information that contradicts them.

Hindsight bias: This bias refers to the tendency to believe that past events were more predictable than they actually were.

Anchoring bias: This bias refers to the tendency to rely too heavily on the first piece of information encountered when making decisions.

Bandwagon effect: This bias refers to the tendency to do or believe things because many other people do or believe the same.

Overconfidence bias: This bias refers to the tendency to overestimate one’s abilities or the accuracy of one’s beliefs and judgments.

Recency bias: This bias refers to the tendency to weigh recent events more heavily than earlier events.

Self-serving bias: This bias refers to the tendency to attribute positive events to one’s own character or actions and negative events to external factors.

There are many more cognitive biases, but those are just some that are relevant in a field like trading. They come into the picture and structure the way we perceive market information, very often in ways that aren’t helpful to our bottom line.

Related: How to Account for Cognitive Biases as an Entrepreneur

Why you can’t completely eliminate biases

Cognitive biases are intrinsic to human thought and perception, and it’s important to remember that just knowing about these biases doesn’t necessarily free you from them. As a trader, your trading approach has to include mechanisms to limit such biases, or else you’re just going to repeatedly shoot yourself in the foot — and you won’t go anywhere in terms of consistency.

Once again, you cannot just rid yourself of biases. Some people appear to think you can, but to that, I’ll say this: Not seeing your biases is itself a bias (blind spot bias — the tendency to recognize biases in others, while failing to see biases in ourselves)

Biases dumb down for us the complexity of the world — they’re just how we see the world and think. They’re inevitable. That being said, they can be mitigated. For instance, it is useful to remember that our brains have evolved these biases to deal with information overload.

The world is a complex place, and we’re constantly bombarded with all kinds of information coming to our five senses. The best estimate I’ve read on this is that there is about 11 million bits per second worth of information available to our senses on a moment-to-moment basis. The research also tells us that our brain has a limited amount of information it can perceive at a conscious level, and that number is about 50 bits per second. That’s a big difference, isn’t it? 11 million are available, and only 50 get in …

So, unsurprisingly what this means is that there is a huge amount of filtering going on in our brains, and that takes the form of habits in the way we perceive and think about things. We are constantly filtering information and selecting the ones that already fit our worldview.

And that’s not all. Within that mess of information available to our senses, there’s uncertainty. What do I mean by this? Well, there are many deep and important questions about reality that we don’t know the answers to, and that lack of “knowing” and lack of certainty is confusing; it troubles us, so we fill in the gaps with our own stories and map it all to our existing mental models.

But some of the information we filter out is actually useful and important, so what does the mind do? Well, it fills in the gap with information it already knows, and sometimes this is good enough, but often it’s not.

In order to act fast in a world fraught with all sorts of dangers, our brain needs to make split-second decisions that could impact our chances of survival. But quick decisions and reactions are often counter-productive because most of the time they’re rooted in short-term emotional gratification. And short-term emotional gratifications often go against our long-term goals — what we know rationally is better for us.

Related: 13 Cognitive Biases That Really Screw Things Up For You

How to limit the effects of cognitive biases

Now, there are ways to limit the consequences of cognitive biases and improve your trading performance. The keyword here is “limit.” Once again, biases are an inevitable part of human thought and perception, and we can only mitigate the extent to which they impact our results as traders.

You can use tools like meditation to become more aware of your inherent biases, thoughts and emotions. I’m really big on meditation, given my background as a meditation teacher, and I’ve found it to be very impactful in helping us develop self-awareness and emotional maturity. Living an examined life like that also helps us better accept that we are permanently biased creatures and that despite that, there’s room for improvement. We can get better … not be perfect, but better.

So, meditation is one way to limit the role of biases in your trading process. Another way is to adopt a rule-based approach to trading. “If X happens, I’ll do Y;” “if Y happens, I’ll do Z.” You don’t need to have hard rules for everything — just for the hard decisions where there’s a lot of uncertainty and potential risk. Examples of hard decisions would be in terms of your position size, stop-loss placement and what you need to do in case of a gap below your stop-loss.

Soft rules will generally do for all the other lighter decisions, like your profit target or when to trade.

In conclusion, by understanding the ways in which cognitive biases can impact your trading decisions, you can develop effective strategies to mitigate their effects and improve your bottom line. Just keep in mind that our brains have evolved these biases to deal with information overload and the complexity of the world. But by coupling self-awareness with a rule-based approach to trading, you can make more informed decisions based on objective criteria and increase your chances of success in trading.

Related: Trading Psychology 101 — How Traders Can Manage Their Emotions and Achieve Success

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Yvan Byeajee

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April 12, 2023
Learn to Day Trade and Invest with This Helpful Bundle, Now Less Than $40 | Entrepreneur

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When you’re an entrepreneur, you don’t exactly have a ton of free time. You also may not have a lot of disposable income to play with, as most of your funds are likely going toward your enterprise. But if you’d like to figure out how to make some passive income, The Complete 2023 Stock Trading and Investing Bundle can help.

Making money in the stock market doesn’t have to be complicated. In fact, you can reap the benefits of investing with the help of the twelve informative courses in this bundle. And currently, you can score them all for just $39 — that’s less than $4 a course.

Learn the basics of stock trading and master day trading in a way that maximizes your profits and mitigates your risks with courses like Options Trading 101: A Beginner’s Guide to Trading Options. This course, like the others, is brought to you by Skill Success. This online learning hub allows you to learn directly from experts in different fields and has been featured on CNN, Mashable, CNET, TechRadar, and more.

This particular course is taught by Travis Rose, a full-time day trader and investor who provides step-by-step guidance to new traders. He shows the trading strategies that have made him money personally and teaches the difference between options and stocks.

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Ten other helpful courses round out The Complete 2023 Stock Trading and Investing Bundle, and you can score them all for just $39 right here.

Prices subject to change.

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March 11, 2023
Learn How to Earn Passive Income Through Day Trading and Investments

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On average, it can take up to four years before a startup begins to see a profit. You may have an excellent business idea, but it’s important to have a steady influx of capital to sustain yourself and any unplanned enterprise needs in the meantime. Set yourself up with some extra cash by launching a passive income pursuit. One option? Candlestick trading.

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Prices subject to change.

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December 20, 2022