[ad_1]
Opinions expressed by Entrepreneur contributors are their own.
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.
The rest of this article is locked.
Join Entrepreneur+ today for access.
[ad_2]
Ross Cameron
Source link
