Day Trading--Best Left To The Pros?
Remember the saying "a fool and his money are soon parted"? This seems to be the theme when it comes to day trading beginners. Just do a search for day trading losses in your favorite search engine and sure enough, the statistics are mind-boggling.
Most of the search results will show that a staggering 70-90% of day traders lose money. Those kinds of statistics are almost equivalent to the ones that measure the number of people who lose money when gambling. So is it fair to say that day trading is like gambling?
Most of the search results will show that a staggering 70-90% of day traders lose money. Those kinds of statistics are almost equivalent to the ones that measure the number of people who lose money when gambling. So is it fair to say that day trading is like gambling?
Most professional day traders will very likely object to any comparison of their craft with gambling. Perhaps the only similarity between both is the possibility of "striking it rich". However unlike gambling where it is purely hit or miss, there is a method to attaining profits in day trading. Anybody with experience in stock trading will agree with that.
A total beginner should understand that there is much risk involved in day trading. Experienced traders have access to scientific information and know how to use them. They move within the circles of those who do the same things and reap profits from the things they do. These two points alone give the professionals the advantage that beginners do not have.
The inexperienced ones may even look for information in the wrong places. There are a lot of hustlers out there who appear to be more than willing to share "inside information" but in reality they are only misleading the beginner. One of the most common tactics is to identify a particular stock and overstate its value, otherwise known as giving a "hot tip" or "share ramping". The intention is to increase the value of that particular stock so that the people/scammers behind the hot tip can unload their own shares of that stock at a significant profit.
Inexperienced traders, often looking for that right information to come along, are easily victimized. In contrast, the professional traders can easily sniff out the scams from the real things.
So what is the beginner supposed to do? At what point will they graduate from being an amateur to a professional?
The first thing is to form realistic objectives especially if you want to be successful in online trading over the long haul. The anecdotes you hear about "being at the right place, at the right time" are more the rare exceptions than the rule. After making those realisitic objectives, the beginner should learn how to take control of their emotions. In other words, they should know "when to stop".
But perhaps the most effective way is to let a professional take you under their wings. Hire a broker or hire a coach. These professionals are licensed and are required to adhere to certain codes of ethics. So unless they want to lose their bread and butter, they should give you the proper lessons and advice in order for your to be successful.
A total beginner should understand that there is much risk involved in day trading. Experienced traders have access to scientific information and know how to use them. They move within the circles of those who do the same things and reap profits from the things they do. These two points alone give the professionals the advantage that beginners do not have.
The inexperienced ones may even look for information in the wrong places. There are a lot of hustlers out there who appear to be more than willing to share "inside information" but in reality they are only misleading the beginner. One of the most common tactics is to identify a particular stock and overstate its value, otherwise known as giving a "hot tip" or "share ramping". The intention is to increase the value of that particular stock so that the people/scammers behind the hot tip can unload their own shares of that stock at a significant profit.
Inexperienced traders, often looking for that right information to come along, are easily victimized. In contrast, the professional traders can easily sniff out the scams from the real things.
So what is the beginner supposed to do? At what point will they graduate from being an amateur to a professional?
The first thing is to form realistic objectives especially if you want to be successful in online trading over the long haul. The anecdotes you hear about "being at the right place, at the right time" are more the rare exceptions than the rule. After making those realisitic objectives, the beginner should learn how to take control of their emotions. In other words, they should know "when to stop".
But perhaps the most effective way is to let a professional take you under their wings. Hire a broker or hire a coach. These professionals are licensed and are required to adhere to certain codes of ethics. So unless they want to lose their bread and butter, they should give you the proper lessons and advice in order for your to be successful.
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