Ads about day trading, you see them everywhere. Everyone is promising you a Lamborghini and an amazing life if you start with day trading. A lot of people get into day trading, thinking they can make a lot of money in a short period of time. Of course, as you probably know by now, this is not possible. But, can day trading be profitable and is it worth it to pursue a career in day trading? In this article you are going to get answers to all those questions. Once you are done with this article, you know exactly if day trading is worth it and if it’s something for you.
What’s day trading and how does it work?
Day trading is the buying and selling of different assets within the same day, in order to make a profit. This all sounds good in theory, but in reality, it’s extremely hard to do this effectively. There are a lot of different instruments you can day trade, for example:
These are just some examples of instruments you can day trade. There are more instruments you can trade.
So, as you can see you have quite a few options there if you want to start with day trading. Depending in your goals and how you want to structure your day trading career, you choose a certain asset class to trade.
Why day trading is a bad idea for most people
Day trading is for most people, I’d say around 90-95% of people, the wrong approach to take. First of all, most people get into day trading because they want to make money online, or because they want to grow their money. If these are the reasons why you are getting into day trading, stop right now, it will never work. I don’t want to be harsh, but this is just the reality based on my experience and based on a lot of studies that have been done about day trading.
The only people that make money day trading are people that are truly passionate about it and that don’t care about the money. If you want to make money online or grow your wealth, there are better and safer ways out there. For example, most people that get into trading are way better off investing for the long term. This is why we at CDFX Trading also help people with investing. It’s simply the best way for most people.
So, why is day trading a bad idea for most people? For the following reasons:
Very low success rate
It doesn’t fit in their lives
These are some of the main reasons why day trading is a bad idea for most people. We already spoke a bit about wrong expectations: thinking you can make a lot of money very quickly. This is not true. If, and that’s a big if, you ever get profitable day trading, it will take you years. It took me around 3,5 years to become profitable with swing trading. With day trading, I’d say it takes on average around 5 years to become profitable. Then it might take a few more years before you can actually make a full-time income from it. This is not my opinion; this is based on data. All the data says the same thing: the odds of you making an income from day trading, consistently, are extremely low. So, ditch those expectations and only get into day trading if it’s your passion.
Day trading is not impossible, but the success rate is very low, especially for retail traders. On average, around 5% make consistent money and only a small group of those people make a lot of money. Do you really want to pursue this for the sake of making money? Of course not. Don’t believe those fairytales you see on the internet about Lamborghinis, cocktails and models, it’s all a lie.
The next reason why day trading is a bad idea for most people, is that it doesn’t fit their lifestyle. When day trading, you usually have to sit behind your screen for the majority of your day. Most people have a day job, so day trading usually doesn’t fit. Yes, you can trade only one session, but again, it’s usually not how you want to do that. Next thing is that most people can’t handle sitting behind a screen all day, analyzing data and looking at numbers. Really ask yourself if that’s what you want to do for a living.
How to approach trading the right way?
Now we have that out of the way and you have ditched those false expectations, let’s take a look at how you can actually approach trading the right way. Let’s first get one question out of the way: are day trading courses worth it? This is a question I often get. The answer? The are worth it for the people selling the course. They make money. Don’t get me wrong, I mentor people as well, but I don’t sell an empty course. A mentor is valuable, a course usually not, especially for day trading. In swing trading, the courses might be worth it, but be careful where you get it from.
So, how can you actually approach trading if you want to make this your career? In my opinion, you should be swing trading. Why? The odds of success with swing trading are a bit higher than with day trading. Because the game is so hard, you really want to put all the odds in your favor and you do this by swing trading. This means, taking a few trades a week that have edge and holding them for days or weeks. This saves you costs and increases the probability of success.
If you want to make trading your career, you probably need a mentor at some stage. It’s good to do research on your own at the beginning, but at some point, you will need guidance from someone that has a lot of experience. Notice I say mentor, not a course seller. A mentor is going to put in time to coach you. A course seller is pushing sales to you.
A mentor for swing trading can definitely increase the odds of you making money in the long run. The benefits of a mentor are:
Learning from other people’s mistakes
These are the benefits of getting a coach or mentor. First of all, you will learn from the mistakes your mentor has made. This way you cut down the time you spend learning and don’t get a lot of psychological issues while going through those problems. Next to that, you also learn proven concepts. A mentor is profitable (if you pick the right one). This way you can learn proven concepts and don’t waste time learning stuff that doesn’t work. That’s why I coach people as well. I have been trading for a long time, I know which concepts work, I know how someone can become profitable and that way I can coach people effectively.
You also get guidance when you pick a mentor. You can ask all your questions. If you buy a course, this is usually not the case. A mentor allows you to talk about your trading problems. So, if you want to learn to trade, a mentor is the right approach. Next to that, use common sense and have realistic expectations about it. You now know day trading is probably not the best idea to do. Get a profitable mentor, learn from his experience and build your own trading edge.
You now know the reality about day trading and you really have some stuff to think about: is day trading something for you? You know my view on day trading and why it probably isn’t worth it to pursue it. The point of this article was to be straight to the point and not sell you some dream like most do. This is my view, based on my experience and based on data.
If, after reading this article, you still want to become a trader, you can schedule a free call with me where we can discuss my mentorship to see if you are the right fit. I only work with a small group of people that are serious & worth my time.
If, after reading this article, you have realized you don’t want to be trading, but you want to grow your money via investments, you can sign up for our wealth building plan. Here you learn how to become an independent investor. No course, but 1-on-1 live sessions to make sure you get the most amount of value possible.